The Competitive Enterprise Institute’s Steven Milloy has just published another great column. In “Green CEOs Bad for Business,” Milloy singles out the two worst corporate executives in the here and now: Bill Ford – who was just dumped, this week, as Ford’s CEO – and John Browne of BP. Both Browne and Ford actually despise the products they churn out. Or rather, they play to the environmentalists while they publicly denounce their respective companies and the market roles they play. The anti-SUV and anti-consumerism hooks played by Ford may have created the perception of good public relations, however, it was disastrous for the business overall as Ford decimated shareholder value continuously while he ran the company.
Ford’s entire reign was disastrous and ill-advised. Eric Englund, in fact, had him nailed long ago when he stated that Mr. Ford’s green policies were the very antithesis of what his shareholders had the right to expect. As Eric points out:
To me, it is mind-boggling that Ford Motor Company’s board of directors has allowed Bill Ford to take Ford Motor Company down this bizarre “green” path. Perhaps he has the board of directors buffaloed into believing that eventually Ford Motor Company will be richly rewarded for being on the leading edge of “sustainable capitalism” (a term you will find on page 11 of Ford’s 2000 Corporate Citizenship Report). I will go on record right now stating that Bill Ford’s third-way management philosophy is not only unsustainable, it is incompetent and will lead to Ford Motor’s financial ruin.
As mentioned earlier, Bill Ford’s third-way initiatives do not come without real costs. Here is a concrete example. In an October 4, 2001 msnbc.com article, Ford Motor Company admitted that its production costs per vehicle had “…ballooned an average of more than $1,000 a vehicle over the past five years, while product quality has plunged far below that of rivals.” An uncompetitive cost structure and poor product quality can put a company at a competitive disadvantage. Not surprisingly, during each of the three fiscal years (2002, 2003, and 2004) Mr. Ford has been CEO, Ford has lost money in its automotive operations.
I like Eric’s reference to Ford Motor Company’s 2000 Corporate Citizenship Report, wherein Bill Ford alluded to Ford Motor Company’s prospects of being richly rewarded for being on the leading edge of “sustainable capitalism” (a term actually used in the report). And since Eric wrote the article in 2005, Ford has continued along its calamitous downhill slide.
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Mark Brabson,
Why WOULDN’T you gate off the entrances? First of all, it is the only feasible way to restrict access to your private property. Secondly, crime drops dramatically if unauthorized persons cannot get inside (only criminals that live in your neighborhood could steal from you).
MB,
I’m sorry to say that “privacy” is a primative pipe dream, yet, it is.
We’re either going to embrace these types of Technologies and utilize them to liberate us, or they, those types of Technologies, will embrace us, along with our self-deluding selves, and imprison us, with the State happily abetting it.
For “Libertarians”– their vaunted “privacy”, where, pray tell, does it currently exist? where, do you have the proper expectation of it ?
(i.e. you believe that they wouldn’t be attacked by Islamic fundamentalists who want to expel Western Oil Companies from the region)
Chances are if it weren’t for the vast military presence, Islamic fundamentalists wouldn’t be interested in expelling western oil companies. And/or, they’d be Arab oil companies. Etc. In fact, my belief is that the “military protection” which you believe reduces the cost of oil actually significantly increases it!
ME Hoffer: “These technologies” are not inherently opposed to privacy. There are ways to provide specific information without giving away other information. Zero-knowledge proof, Chaumian blinding, etc. You can have privacy _and_ technology. The statists just get in the way, and force manufacturers to build in functions that are against their customer’s interests.
Peter,
You stated what I had meant. Sorry, if I was unclear.
Take “Toll Transponders”, from our current experience w/ “E-Z Pass”, there’s no way that technology “needs” to be tied to personally identifiable information, yet, it is.
To your point.
David White/Nick: I used to be with you, but have migrated to Person’s position. Whoever owns the oil fields will have an incentive to sell oil, and any justifications for using our military to support one set of owners for the sake of “supply security” have clearly been swamped by the costs of the blowback, market uncertainty and the costs of the Iraq war.
“Supply security” has since become a mantra used to justify obviously counterproductive poliicies that benefit only special interests.
I advocate expensing the military budget through import taxes, but solely for the purpose of making the costs of our insane policies painfully obvious to everyone, rather than being masked and pushed off onto future generations.
Person:
“Let’s say that all taxes were removed from oil (including hidden taxes on the various stages of production), AND consumers had to pay their quotal share of pollution and whatever global warming it contributes to (discounted for risk and time, of course). Would oil be cheaper?”
Thanks for giving me another soapbox on global heating. With rational defense policies, gas prices would fall even if an implicit GHG tax were factored in. Of course if the GHG “tax” were dealt with separately (and seen as the user fee that it economically would be), it would serve to lower demand for gas and would thus lower prices.
Gas prices have already gone through the roof, partly from (1) Iraq/Iran, (2) growing demand from the economies (China/India/Brazil) that we continue to subsidize by not forcing them to pay for the costs of using the global atmospheric commons as a GHG/particulate dump, and (3) Katrina/Wilma.
Various observers have pointed out that the costs of Iraq to date have already exceeded our all-in costs for complying with the Kyoto Protocol over its lifetime.
For you fence-sitters out there, I wonder if you’ve
(1) seen the latest Economist:
http://www.economist.com/opinion/displayStory.cfm?Story_ID=7884738
or (2) noted perhaps this recent statement by that renowned scientist, Stephen Hawking (soon to be labelled and dismissed by Dr. Reisman and others as a radical environmentalist/people-hater)?
http://abcnews.go.com/2020/Science/story?id=2319559&page=3
Regards,
Tom
http://abcnews.go.com/2020/Science/story?id=2319559&page=3
TokyoTom,
You are misunderstanding what I have stated (as others have too). I DO NOT, I repeat, DO NOT, believe that the cost of the USG providing security in the region is lower than the reduced cost of gas. If I state that US Security in the region costs $250 Billion, but the reduced cost in oil is only equal to $50 Billion, how am I stating that it was worth it? I AM NOT.
But I AM stating that if there were no USG-provided security in the reiogn, OPEC still existed, and the vast quantity of oil was still owned by states, prices WOULD be higher.
Let me repeat for it to sink in: The cost of intervention is higher than the savings in lower oil prices.
On another point, during your rant about global warming and gas prices (I noticed you said “global heating” so you wouldn’t be seen as a quack), you completely neglected to mention that our refining capacity has not expanded in three decades! You mentioned Katrina and Wilma restricting refining capacity, probably because you feel the hurrcanes were caused by global warming, err, I mean global “heating”. You have also failed to mention that refineries must make doezens of different blends of gas to sell in various US States, dramatically increasing the cost of producing gasoline.
Many assume that the price of oil is directly reflected at the pump; wrong! It fails to neglect 100% of the cost of shipping, producing, and delivering gasoline. It’s akin to claiming that the price of semiconductors is dependant on the price of quartz (the best form of silica, which is used to make silicon).
I see that you sent a link to a story with Dr. Stephen Hawking, the renowned climatologist. Oh, that’s right, he’s a physicist. Physicists have historically been very pro-statist by the nature of their work; If physicists aren’t teaching, they’re working for the government.
The Economist would love to see a global regulatory regime put in place that favors the EU over the US; The EU is already complying with many of Kyoto’s standards and have experienced less economic growth in recent years.
I especially like the Economist’s PATENTLY ABSURD claim that since we’re not sure whether global warming is occurring due to human activity or what it’s extent is, we MUST do something about it. Apply that logic to other social problems. “We’re not sure if there’s a crime problem in town, so we should definitely hire more policement and beef up the number of patrols”. Or, we don’t know if there’s a foreign adviary out there, so we should definitely increase he defense budget.” How absurd indeed.
TokyoTom,
If you advocate shifting the cost of defense from direct to indirect taxes, why not advocate it for all of our asinine social programs?
Why not just support the FairTax so that every taxpayer becomes painfully aware every time he buys something at the store how much he is getting robbed by the State? Or do you just want to shift defense expenditures towards implementing a carbon emission credit regime? Or spend the money to buy up privately-owned forests and wetlands at eminent domain prices? Would that suit you.
I’m sorry if I’ve upset you, but I feel that anybody who endorses action against global warming (or “heating”) is a closet statist.
To those worried about “gated” communities – gates or no, the owners of the property, singly or in concert, should get to decide who may enter. In most cases, simply blocking through streets will reduce 95-98% of non-owner traffic, the balance would be regulated by the property owners singly or in concert. This had relevance to the other hot thread here, “Liberty on Immigration”. This would also tend to tip the balance toward ownership and away from rental in lower-density communities.
http://technology.guardian.co.uk/weekly/story/0,,1871355,00.html
may be of interest: GPS/Mapping mash-up by individual.
Nick, many thanks for your comments.
Let me repeat for it to sink in: The cost of intervention is higher than the savings in lower oil prices.
It sounds like we agree that the purported “benefits” of US-provided security for oil supply are far out-weighed by the costs, so we would be better off without US military bases and intervention abroad, which simply invite mischief by our political and economic elites for their own benefit.
On another point, during your rant about global warming and gas prices (I noticed you said “global heating” so you wouldn’t be seen as a quack), you completely neglected to mention that our refining capacity has not expanded in three decades! You mentioned Katrina and Wilma restricting refining capacity, probably because you feel the hurrcanes were caused by global warming, err, I mean global “heating”. You have also failed to mention that refineries must make doezens of different blends of gas to sell in various US States, dramatically increasing the cost of producing gasoline.
Not sure what part of my comments reached “rant” level, but I was simply responding to Person’s question. I agree completely with your excellent points about the relationship between refining capacity and refining regulations and the cost of gas – points that I have separately made earlier on other threads. Thanks for filling in the discussion here.
As to the hurricanes, you’re batting at ghosts – I was not trying to attribute particular hurricanes to global heating, but simply to note (rather explicitly, I thought) that the wallop delivered by hurricanes last year took a bunch of refining capacity off-line and thus contributed to supply shortages and thus price hikes. Of course, climate scientists do agree that warming the Earth should lead to stronger (and perhaps more frequent) hurricanes, but that is not a point I was trying to make at all.
Oh, that’s right, he’s a physicist. Physicists have historically been very pro-statist by the nature of their work; If physicists aren’t teaching, they’re working for the government.
Nice dismissal of the views of Dr. Hawking without addressing the substance of his expressed concerns. Personally, I had always viewed physicists as bumbling ivory-tower revolutionaries, always seeking to understand things in ways that upset the current order, and subject to sanction from the powers that be for occasionally upsetting their apple cart.
Sounds like you’d like to send Hawking packing, back to his tower; I think it’s kinda interesting that he feels strongly enough to leave his theoretical work briefly to talk about the climate, even though he has no particular financial stake (work or otherwise) in doing so. Whaddaya trying to say – that we really need to discount what those card-carrying scientists have to say, especially physicists, and if they seem to agree with each other on the big issues then we should be particularly dismissive and hold onto our wallets? If that’s your position, then I have a Stone Age to sell to you, Mr. Luddite.
The Economist would love to see a global regulatory regime put in place that favors the EU over the US; The EU is already complying with many of Kyoto’s standards and have experienced less economic growth in recent years. I especially like the Economist’s PATENTLY ABSURD claim that since we’re not sure whether global warming is occurring due to human activity or what it’s extent is, we MUST do something about it.
The logic you state is of course absurd, but it’s not the Economist’s position, which is a little more sane and understandable, even if muddle-headed in some aspects. The Economist takes note that
What the Economist does not note is that the consensus position on atmospheric sensitivity to GHGs is that if CO2 levels stabilize at a doubling of CO2 levels (which levels we are likely to reach this century), average surface temperatures will stabilize at about 3°C (5.4°F) higher than in the mid-1900s. In the past few decades we have already experienced about 0.5°C of this increase – with an Arctic that is rapidly melting (ask Ted Stevens and BP), Great Lakes that don’t freeze, a spring that comes two weeks sooner in NE, and various and sundry other effects. Note that increases at the high end are just as likely as estimates at the low end.
http://www.realclimate.org/index.php/archives/2006/03/climate-sensitivity-plus-a-change/
This is rather a sobering picture, and what is absurd is to pretend that nothing is happening and to then sidestep the question of what, if anything, should be done about it. Where the Economist’s argument is weak is in its failure to describe the property rights failures and rent-seeking that underpin global heating, and in its resulting assumption that the >expenditure of public funds If you advocate shifting the cost of defense from direct to indirect taxes, why not advocate it for all of our asinine social programs? Why not just support the FairTax so that every taxpayer becomes painfully aware every time he buys something at the store how much he is getting robbed by the State? Or do you just want to shift defense expenditures towards implementing a carbon emission credit regime? Or spend the money to buy up privately-owned forests and wetlands at eminent domain prices? Would that suit you.
Good questions, and not at all upsetting. I’ve simply focussed on defense because I think that is one particularly prominent area in which we’re being ripped off and manipulated. Precisely for those reason, however, I harbor no illusions that the politicians and special interests benefitting from our ruinous defense policies would agree to expensing defense costs through gas taxes, since this would put an end to their joyride. I’m not familiar with the FairTax, but perhaps it’s a good idea generally.
I’m not advocating a shift of defense expenditures towards climate change, but simply note the first for comparison purposes. On defense, we have clearly and very expensively shot ourselves in the foot, and the mischief will continue to cost us much more, for no net gain. On the other hand, compliance costs on climate change, even if fully funded by the government, would have been expected to have been smaller, with the tangible benefits that result from more rational resource use. But they are fundamentally apples and oranges, as climate change compliance costs should fundamentally be private, like other decisions to consume resources, and not funded by government. As noted above, I would prefer to see government out of the land ownership business generally, and certainly am not proposing further use of eminent domain.
I’m sorry if I’ve upset you, but I feel that anybody who endorses action against global warming (or “heating”) is a closet statist.
You haven’t upset me in the least. On global heating climate/change I think it is clear that we have a problem that will continue to worsen until institutional corrections are made. Libertarians might honestly argue that the present discounted costs of having governments involved outweigh the present benefits of using government to facilitate corrections in failed property rights mechanisms, but those taking this position should be willing to acknowledge that (1) costs are accruing, (2) for the benefit of certain interests and elites, and (3) as time goes on the balance of whether governmental action is justified will change. But those who simply deny that there is a problem at all – and thus no principled decision to be made – are not libertarians, but closet idiots who are the unwitting pawns of the rent-seekers richly benefiting from inaction. I presume you are not the latter.
As I favor action now, in the form of transferable, privately-owned GHG emissions permits and offset rights, does that make me a statist? If so, I’m happy to accept the label. I’m already know generally as a green people-hater (and a cowardly anonymous one at that), so I suppose it can’t get much worse.
Regards,
Tom
Nick:
An html error after “expenditure of public funds” caused an omission; let me restate:
“its resulting assumption that the expenditure of public funds is warranted by global heating – this is a misdiagnosis. The problem arises because the atmosphere is a global commons that is essentially unowned and thus unregulated, so that use of it is “free” to economic actors while the costs are borne by all.”
Regards,
Tom
TokyoTom,
I have many points to make.
First, as far as Dr. Hawking goes, he is no authority on the subject, but John Q. American seeing that piece on ABC thinks “this really famous scientist thinks it’s true, so it must be”. Furthermore, members of the Academia are overwhelmingly statist, with physicists being even more so.
As for the economist,
“10,000 years ago, the wild fluctuations stopped, and the climate settled down to the balmy, stable state that the world has enjoyed since then.”
It settled down to the stable, balmy state that the world has enjoyed since then? Has the Economist ever heard of the “Little Ice Age”? From 1250 – 1850, the world experienced a dramatic DROP in temperatures; it commonly snowed in July in the early 1800s. What gets me is that the most common explaination for the “little ice age” was a drop in solar activity. If that was true for cooling, couldn’t the opposite be true for warming? Why should we cause a trillion or so in economic damage (or non-growth) just in case?
as for GHG trading, how would you create an emission credit trading system without the government controlling it?
Here is a series of five questions that one must answer in the affirmative to support “action” against global warming:
1. Is the earth warming significantly outside of natural cycles?
–I say no; first of all, sami-accurate climatological data only goes back a couple of hundred years. Secondly, many of the temeratures readings we take are near more urban and developed areas. I read something a while back that temperatures have not risen in rural areas AT ALL in the past 100 years.
2. If it is warming significantly, what is the primary cause?
–Is it even CO2? Water vapor is responsible for the is responsible for the vast bulk of GHGs. Methane also plays more significant role than CO2. How about the sun? There was an excellent article in the Times (UK) called “let’s look on the sunny side” by tim hames (http://www.timesonline.co.uk/article/0,,6-2331369,00.html).
Hames, along with many others, feel that sular activity is far more likely to have an effect on climate change than anything else. Also, Who’s to say that even if it was CO2 it wouldn’t result in more abundant plant life and cancel the whole thing out?
3. If significant climate change is occuring due to CO2 emissions that won’t be re-absorbed back into plantlife or oceans, how much will the earth’s temperature rise in the future?
– Global Warming estimates vary, anywhere from 1 – 5 degrees celsius.
3. If significant climate change is occuring due to CO2 emissions and they won’t be absorbed by the oceans or plantlife, and the earth’s temperature is going to rise significantly in the next century or two, can we do anything about it?
– The Kyoto Protocol, with its draconian measures that would have stifled economic growth, promised to reduce temperatures 100 years from now by 1 degree celsius, AT BEST.
5. If significant climate change is occuring due to CO2 emissions and they won’t be absorbed by the oceans or plantlife, and the earth’s temperature is going to rise significantly in the next century or two and we can we do something about it, should we?
– Some feel that global warming would be a GOOD thing. A great article at LewRockwell.com by Bill Walker entitled “Global Cooling: Fear the Ice”, lists a host of positives that can come from a warmer climate:
– Russia, Canada, Alaska, and the Northern US States would have FAR better agrpcultural yields.
– Overall, agriculture and wild plantlife would improve.
– Increased reainfall can be a quick fix to projected water shortages in the third world.
– If Sea Levels do rise (that’s a big “if”), what’s to stop coastal cities from building Dikes? The Dutch did it 100s of years ago. Can’t we to?
The world may be a better place even if we did have global warming, which is probably unlikely.
Clobal cooling, IMHO, is a much bigger concern.
Nick, sorry to leave you (and the rest of the board!) hanging.
I’m happy to see that you’re making an honest effort to work through the data. I have gathered (surprise!) a bunch of links on data issues; if you’re really interested please let me know.
Before we embark on addressing the particular points you’ve raised, I hope we can share a joint understanding (that I thought we reached when we discussed this in March) that the nature of global warming as an economic problem is that it relates to heavy use of the global atmospheric commons as a dumping ground for gases that induce further warming of the atmosphere, surface and oceans – use that has essentially been free of charge due to that absence of any meaningful property rights relating to the atmosphere.
This is resulting in a tragedy of the commons where, unless coordinated action can be agreed to regulate the commons and to effectively charge for its use as a GHG dumping ground, it will continue to be in the rational self-interest of economic actors to continue to over-produce GHGs, regardless of the level of damage this imposes on everyone (either directly or to shared ecosystem resources). That this is the case is clearly evidenced by the persistent efforts by fossil fuel manufacturers and users to purchase political inaction through campaign contributions and by funding for-pay pundits to disrupt the waters of the policy debate by muddying the rather stark scientific consensus about the nature of the problem.
Now let me briefly address your specific points:
A. Hawking: You dismiss him as “no authority” and, as a physicist and a “member of Academia” he must be “overwhelmingly statist” and bemoan that John Q. American finds him credible. Sorry, but Hawking is talking about climate physics; that kinda falls within his general area of expertise. If he has credibility with the public, it’s because he earned it. Although it’s not his particular bailiwick to craft a policy, but he hasn’t really don’t that has he – he’s simply said there is a serious problem and we need to start reducing global warming. What’s statist about that?
B. Economist:
The Economist is correct that, relatively speaking, we have been in a rather long and stable inter-glacial period – one that we would be foolish to bump ourselves out of and back into periods where there were really wild climate swings. The role of solar activity in climactic cycles has of course been considered and it has been shown that solar activity cannot be the primary cause of the recent warming.
I am sure you are aware of the greenhouse effect generally and acknowledge that GHGs play in moderating our climate. You must also be aware that with the rise in industrial activity and certain farming practices we have been pumping GHGs into the atmosphere like crazy. Do you seriously think that increasing CO2 levels to those not seen for millions of years will have NO effect on climate?
GHG trading: As I noted in March, given the tragedy of the commons aspects to climate change – free riders, information difficulties, myriads of parties and no shared legal underpinnings, purely private “solutions” clearly won’t work, will they? As US industry and consumers cannot effectively “homestead” the global atmosphere and exclude others, government must be used. This can be done by creating private and tradable permits.
C. Your questions
1. Is the Earth warming? Large swaths of the Arctic – Alaska, Canada, Siberia etc – are warming like crazy, with summer temps up by 1-5 degrees C. As far as data points go, the heat island affect is understood and corrected for.
2. Why is the Earth warming? By understanding and controlling for other long-term factors, there is nothing left except our remarkable GHG dumping, plus feedbacks (water, albedo). CO2 can lead to only limited greening, since equivalent increases of water are needed in photosynthesis. But actual observations show that greater heat shuts down photosynthesis, and leaves less food for herbivores.
3. Future temps? If CO2 levels stabilize at twice pre-industrial levels, scientists except equilibrium temps to be 3 degrees C higher (5.5 F) with higher temps being just as likely as lower ones. We have already experienced 0.5 C of this – with all of the Arctic melting, Great Lakes that don’t freeze in winter, glaciers disappearing, etc.
4. Can we do anything about it? You mean, besides pretending that there’s no problem, that if there is, it will either be a boon or solve itself, or simply whimpering and forking over all the money we will need to adapt our infrastructure? Yeah, we can implement private property rights and use the power of private markets and individual decisions to properly reflect costs and to transform our economies. We simply need users fees (in the form of tradable permits) that force private parties to internalize the external costs imposed by GHGs – this will eliminate the current implicit subsidies for our destructive use of the global commons and create powerful incentives to change our energy mix and improve our use of fossil fuels, including creating markets for GHG sequestration.
In the process we can eliminate a raft of pork-barrel energy project favored by rent-seekers and big government. BTW, implementation of the Kyoto Protocol would have been much cheaper than the bottomless-pit pork barrel that the “war on terror” has created, but I agree that Gore and Clinton should have negotiated a more meaningful treaty – that imposed real obligations on China/India (whom we have instead chosen to subsidize through inaction and the Asia-Pacific Initiative).
5. Should we do anything about global heating? I think you know my answer. Should we bother to go to the effort to solve any of our great tragedy of the commons problems, or is it wiser to hope they will go away, knowing full well that they will not – because of the property rights failures they manifest – and simply go on merrily subsidizing current consumption at the cost of our future? Is an ounce of prevention cheaper than a pound of cure? Should we have ever regulated pollution?
In the interest of brevity I have necessarily skipped over a few things. If there’s something you’d really like me to address, please let me know.
Best regards,
TT
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