TT's Lost in Tokyo — by TokyoTom

The Competitive Enterprise Institute and the American Conservative Union have joined with environmental groups such as the Earth Policy Institute and the Environmental Working Group and with meat growers, food processors and others in the “Food Before Fuel” campaign, which on November 18 called on Congress and the incoming Obama Administration to repeal subsidies for ethanol in light of the harmful effects of such subsidies on “the environment, consumers and numerous industries”.   Thankfully, the press release also mentioned that the subsidies are a waste of taxpayers’ money.

This is the type of lobbying that ought to warm the hearts of libertarians of all stripes, even if it means getting into bed with environazis and other more run-of-the-mill rent-seekers.

Choice excerpts from the Food Before Fuel press release follow (emphasis added):

This November marks the 30th anniversary of the first government subsidies for ethanol. These subsidies now total nearly $5 billion annually.  In recent months, a wide number of independent voices have spoken out against ethanol subsidies as a failed policy that does more harm than good. This includes three Nobel Prize winning economists, Joseph Stiglitz, Paul Krugman and Amartya Sen, as well as international institutions such as the IMF, World Bank, the UN, the International Food Policy Research Institute and others. …

Joel Brandenberger, president of the National Turkey Federation commented, “Ethanol has been on the government payroll for 30 years.  After three decades of government policies subsidizing and supporting the ethanol industry, we find ourselves at the end of 2008 with more questions than ever before about the wisdom of this course.”

“On many issues, these groups gathered here today do not see eye to eye.  But we have come together because we all can agree that the government’s subsidization of the corn ethanol industry is a flawed policy that pits rural industries against one another, raises food prices for everyone and has failed to yield promised environmental benefits,” Brandenberger said.

Duane Parde, president of the National Taxpayers Union, was critical of the ethanol industry as a “demonstrative waste of taxpayer money in a time of economic hardship.”

”President-elect Obama and the 111th Congress have an opportunity to protect taxpayers and end business as usual,” Parde said. “We have spent 30 years and billions of taxpayer dollars subsidizing the production of ethanol with little to show for it. Despite the subsidies, ethanol is not competitive in the marketplace and the industry only survives because politicians shovel our money into their pockets. We must end the bailouts and subsidies for industries that are unable or unwilling to stand on their own.”

Craig Cox, Midwest vice president of the Environmental Working Group, said that, “After 30 years of subsidies, ethanol is displacing only 3 percent of the gasoline we use each year, is likely increasing rather than decreasing greenhouse gas emissions, and is threatening our soil,  water and wildlife. Yet ethanol gets $3 out of every $4 of tax credits the federal government gives to all renewable alternatives including wind, solar and geothermal. It is time we direct our tax dollars to renewable alternatives, including biofuels, based on how well they protect our climate, our environment and our energy security.”

Jason Clay, senior vice president for market transformation at the World Wildlife Fund, noted, “In its work with local communities and habitats across the globe, the World Wildlife Fund has seen the negative impacts of the biofuel policy not only on the environment, but on vulnerable populations throughout the world.”

“Biofuels have a role to play in our response to energy independence and climate change, but the rush to produce them has been ill-considered. The United States must set an example to the rest of the world by pursuing sustainable agriculture and energy practices that meet scientifically based environmental performance standards,” Clay said.

Even the New York Times, in a November 17 editorial, has stood up against ethanol subsidies.

We’ll see if Obama and the Dems have the political will to say no to ADM and other ethanol subsidy recipients.  I’m not holding my breath, but am pleased to see such a broad effort nonetheless. 

H/T to David Zetland/Aguanomics.

In response to Jim Hansen’s recent expressed desire for “public trials” for fossil fuel executives if, despite being “aware of long-term consequences of continued business as usual,” they continue their “campaigns” “to spread doubt about global warming” in order to “blocked [the] transition to our renewable energy future”, Andy Revkin of the The New York Times has received and posted on the NYT’s “Dot Earth” blog a note from Vic Svec of Peabody Energy, which Revkin notes is the largest private coal producer in the world.

Vic Svec’s note at “Dot Earth” is here.

In response, I posted a few comments to Mr. Svec on the Dot Earth blog thread, which I copy below [with some links added]:

Vic Svec
Senior Vice President, Investor Relations and Corporate Communications
Peabody Energy
(314) 342-7768
[email protected]

Dear Vic:

Nice try with your letter addressing Jim Hansen’s criticism of fossil fuel firms such as yours.

1.  You say that Hansen’s “Holocaust analogies [are] outrageous and demeaning.”

Hansen’s latest criticism of coal and oil firms contains ZERO Holocaust analogies.  So who is it who prefers not to address his actual remarks, but to “cheapen the dialogue and invite ridicule”?

Yes, Hansen did warn last year that rapid climate change may very well threaten the extinction of many species – a claim supported by many prominent biologists – and in that context said that further increases in coal plants could in effect be “death trains … loaded with uncountable irreplaceable species”.  http://www.columbia.edu/~jeh1/2007/IowaCoal_20071105.pdf.  You obviously don’t like his rhetoric, but do you care to explain why either his facts or his imagery are wrong?

2.  “The suggestion that a dissemination of ideas be criminalized –- coming from a government employee no less –- does hearken back to World War II.”

First, what was that you just said about cheapening debate?

Second, Hansen has not said that the speech of any fossil fuel executives should be restricted or criminalized.  Rather, he is making a stronger version of the argument that the British Royal Academy made last year to Exxon, when it sought to clarify if Exxon was going to continue to provide support to groups that deny what EXXON itself has conceded: that human GHG emissions present sufficient worry for public policy action now.

Like Exxon, your firm has publicly acknowledged that concerns about climate change are legitimate and, indeed, that massive investments are needed in new infrastructure to ensure that coal is burned more cleanly and that CCS (carbon capture and storage) technologies are employed (as you note in the projects listed in your item 4).  The only real differences between your firm’s position and Hansen’s is that you think that the government should subsidize your change in business model by (a) having Uncle Sam pay the bulk of capital costs for IGCC (integrated gas combined cycle plant) [something like $1 billion for the first one with CCS] and (b) giving you a further break (reduced royalties) on the sweet deals you already have for stripping coal from public lands, while Hansen proposes a carbon tax (rebated to citizens) to motivate changes in demand and a moratorium on new coal plants until CCS is in place.

While Peabody has every right to conduct its business as it sees fit, so does Hansen have the right to hope that fossil fuel firms will be called to public account for the years of delay that they have purchased, not by openly arguing with the science, but by back door channels/contributions and third-party proxies – tactical activities that are hardly subject to dispute.  THAT, and not open disputes on science or policy, is what Hansen is criticizing.

3.  “Blaming big oil and big coal for the broad array of opinions about climate change is disingenuous.”

Is that at all what Hansen has done, or do you just find strawmen to be irresistible?

“If he would imprison those who don’t march in lockstep with his views, the jails would be very, very big.”

Ahh, here we go with more cheap and shameful metaphors of the very type that you yourself decry, plus another great strawman.  Hansen hasn’t suggested jailing anyone who disagrees with him, as I previously noted.  He’s just castigating the fossil fuel firms for what is rather pedestrian (and undeniable) in the modern world – that powerful economic interests have no qualms about ignoring public and common interests for the sake of private gain, or about employing whatever tool they can to influence government action via both politicians and public opinion.  Hansen, whose views on science you conspicuously refuse to address, is now obviously trying to play the same game of influencing political discourse by putting pressure on you.  As a scientist, Hansen obviously has only a political bark and no formal bite.

Your aim now is simply to discredit the barker, the better to get government subsidies, cheaper coal from the government by lowering royalties, and to continue commercial activities that shift the costs and risks of GHG emissions to others and to the future.  That, of course, is the “serious work” for which Peabody employs you as SVP of Investor Relations and Corporate Communications.

As for the “thousands of scientists and university professors” who have opinions that differ from Hansen’s, I’ll wager that, like Exxon, your scientists tend to agree with Dr. Hansen and that your only connection with any of the other thousands is via funding for PR efforts.  Maybe you could clarify this?

Thanks so much for your sound bites.

[Tweaked from a Facebook post]

Below are several underlying dynamics of the Israeli/Palestinian conflict; when viewed from the perspective of US involvement, this looks like an amazing “Bootleggers and Baptists” coalition to use, abuse, distract and pander to taxpayers, while in fact serving a few special interests:

1 – elites in both US and Israel are closely tied to crony defense/military-industrial complex firms: war is their bread and butter. The more “peace” fails and “wars on terror” perversely bring about more terror (surprise! sowing dragons’ teeth fosters blowback! who knew???), the longer these elites stay in power and the longer they can grift off, distract and impoverish the rest of us. As a business model, blowback is a smashing success!

2 – the US provides massive subsidies to Israel (to the tune of $3 billion annually) and — by providing significant direct support to the Palestinian Authority and indirect support to Gazans via the UN (together, over $1 billion annually) — both sweeps up after Israel’s biennial turkeyshoots in Gaza (providing a quantum of solace to trampled West Bank Palestinians) AND keeps Palestinians relatively passive and dependent (and thus less active managers of their own futures and less able to either cooperative via business with Israel, or to stand up to Hamas OR Israel). Support to Palestinians also helps US lawmakers pretend they are even-handed and have no responsibility for what Israel becomes or what Israel does.

3 – US subsidies to Israel enable Israel’s own crony elites to cultivate and cater to (rather than rein in) Jewish Zionist fundamentalists — who resolutely desire no peace with Palestinians whatsoever.

4 – Israel’s status as the possessor of the “Holy Land” provides a deep, emotional excuse for thoroughly corrupt and cynical US leaders to game/distract “conservative” “Christian” Americans and much of rest of the West (who all have some degree of Judeo-Christian-derived culture) into vocal support and approving massive tax subsidies/military support to Israel and to our own Military-Industrial Complex, for the purpose of helping Israel “safeguard Jerusalem” from dirty infidels (on top of the significant amounts that American Jews are able to fund themselves to “save Israel!” from non-existential threats that Israel keeps alive via systematically frustrating peace efforts and periodically touching off blowback).

Thus, by our participation US elites fuel fundamentalism in Israel, among Muslims and among Christians at home. We also generate increasing antagonism to the United States in general, by peoples who tire of both US domineering and of the US role in fostering extremism and in supporting despots.

What do we know about systems that absolve those who act within them from personal responsibility for negative consequences to others?

P.S.: This interesting interview with Jewish writer Yossi Gurvitz provides some insights into Talmudic Judaism and the Jewish fundamentalists who, coddled by a US-subsidized Israel, diligently sabotage peace:

http://www.youtube.com/watch?v=YSy6ENVAJlY

Further interview here: http://mondoweiss.net/2012/03/the-radicalization-of-yossi-gurvitz.html

[cross-posted from Facebook]

– “Govt evolves like society has evolved, like we evolved.”

Formal “Governments” are human artifacts, and subject more or less (depending on size and many other factors) to conscious human manipulation. But as social, cooperative and competing animals, we also “govern” each other in myriads of informal mechanisms, which are also both part of of evolution and cultural heritage. These, too, can in part be shaped.

– “Govt does solve problems but what it does well we can’t see, what it doesn’t do well we notice.”
Well, we all have limited time, energy, cognitive ability and information, and also face competing priorities. We DO tend to notice more when things are broken, in ways that impose significant negative costs or inconvenience. But it is possible to notice what “Govt does well”, as well as to overlook countless things that it does not do well.

– “What you want is the next evolution of govt. You want it to be a society without govt.”
I’m not sure where you’ve derived these conclusions from (or entirely what you mean). Yes; I see many things about formal Govt now that are gravely broken and damaging to many people. But no, I do NOT want “society without [formal] govt”. In fact, my purpose in CREATING this group is to band together with others of many different persuasions to try to CHANGE formal government — not to end formal Govt altogether. But yes, humans did evolve without formal governments, and most of our interactions still take place informally, so I would hope to see formal Govts altered in ways that allow more of what Nobel Prizewinner Elinor #Ostrom called “polycentric” government, including much more self-government and participatory government.

– “Perhaps we as a society think we are ready for that, I am not sure we really are.”
I share your doubts that we are ready to live without formal Govt. In any case, it is not my objective. But we have before, can again, and imho definitely need to live again, with much more robust self-government that is more resistant to central corruption and looting by distant and unaccountable elites.

– “After all, you think there is no community.” 
I don’t think that there is NO community, but that growing crony capitalism and a growing Big Brother has steadily ERODED our communities and our mutual reliance and accountability, and set us up against each other in fighting over the crumbs that fall from the table, and for an illusion of who is really in charge.

Hence, my objective here is to BUILD community among others who are also waking up to the stinking mess that is America. Allies of all political stripes are welcome. We need to unite and build coalitions in order to push for changes that will rein in crony capitalism and restore more power for people to manage their own affairs and communities.

“I am concerned much of BIG BROTHER actually arises out of what community may still exist, the desire to control women, the desire to suppress atheism in the US…”

My own view on the growth of Big Brother is that it has fairly steadily centralized power, reducing the ability of people to live their own lives and manage their own communities, turning Govt into a one-stop shop for corporate welfare, contracts to provide military/defense and other services and for regulations that limit competition, and turned we the people into eternal supplicants for welfare and for more regulations to make the Frankensteins play nice.

Big Brother doesn’t so much “arise from community” as from a dynamic whereby it arrogates the right to solve the problems that it creates (by serving elites who fight to coopt it and to use its power).

[cross-posted from The Anti-Establishment Center Community on Facebook]

A few thoughts on the notion of Govt-owned “property”, in connection with the radical misanthropes who have been ranching in Nevada for 100+ years on “Federal land”.

I’m afraid it’s turtles all the way down, with respect to corrupt “Govt ownership,” particularly with respect to the politics and special interests relating to the Bundy Ranch and Gold Butte:

http://www.infowars.com/breaking-sen-harry-reid-behind-blm-land-grab-of-bundy-ranch/

[from a comment at the “we build our society” Facebook group]

[A]s a factual matter, the greatest Industrial Revolution pollution occurred AFTER governments started to create #LimitedLiability corporations whose effect (and aim) was to protect INVESTORS from the downside risks of doing sh*t that hurt OTHER PEOPLE.

Even today, most of our largest social problems flow from risk socialization and lack of accountability, proximately resulting from wonderful LAWS that serve the powerful, while pretending to “protect” the poor and dumped upon.

Fukushima happened because NO ONE had any personal skin in the game. What happened was no “surprise” or “Act of God”, but an expected result where NO ONE was f*cking responsible for the downsides of poor decisions that benefitted themselves or their organizations, favored corporations with monopolies, whose shareholders and lenders are protected from liability, the banks that are protected by government, the executives and regulators who often retire to the regulated company, the mega-construction firms who built the reactors, the legislators who imposed taxes on all users to bribe the local communities into accepting them ….

Where no one is accountable, bad sh*t is no surprise, but more LIKELY to occur. The same story can be written of the BP/Gulf of Mexico disaster, the ongoing oil sands disaster, coal/oil pollution, the god-damned War Machine/Prison/Industry/Drug War complex, and the “unexpected” financial crisis resulting from monetary gaming by the Fed and a gazillion regs that left depositors and shareholders powerless in the face of looting by bankster elite-wolves.

The answer is NOT “more govt!” or “more regulation!”, but SMARTER regulation that RESTORES RESPONSIBILITY and stops the lie of govt “protecting” people. Keep regulating the old/big cos, but LET THE SMALL and ACCOUNTABLE BUSINESSES FREE. Firms run by managers who are members of the communities in which they operate, and whose owners have no government-granted #LimitedLiability be kept in check by their communities and the risk of losing their personal assets, and will, via the process of #CreativeDestruction, supplant the corrupt dinosaurs.

HLS Professor Lawrence Lessig delivered his “Keynote from the Left” at the Conference on the Constitutional Convention on Sept. 24-26, 2011. The conference was co-sponsored by the Tea Party Patriots.

Lessig presented his speech again at Google on November 16, 2011; this is the speech/presentation posted below.

Lessig is the director of the Edmond J. Safra Center for Ethics at Harvard University and the Roy L. Furman Professor of Law at Harvard Law School. He co-founded RootStrikers (originally Change Congress (2008) and Fix Congress First!), which aims to reduce the influence of private money in American politics. Lessig is very well known for his work on maintaining an open Internet, but since joining Harvard several years ago has focussed on corruption and politics.

Lessig has joined with a new organization that just launched called United Republic. It is another coalition of people from the right, center, and left tackling the problems of money in politics. 

Lessig is the author of a new book, REPUBLIC, LOST;  How Money Corrupts Congress — and a Plan to Stop It. The NYT reiew of his book is here; here is another review at Bloomberg

Lessig’s collection of his speeches is here. His blog is here.

More on the movement to call for an Article V Convention to amend the Constitution is here.

For more, see “How to sober up Washington”—an essay by Lessig and Mark McKinnon on corruption in Washington, voters’ disillusionment, and the need for an Article V convention.

[View:http://www.youtube.com/watch?v=Ik1AK56FtVc:550:0]

I tried to leave a few thoughts with Jefrey Tucker in response to his June 2 post, Scrupulosity and the Condemnation of Every Existing Business, but it looks like my immoderate use of links has landed me in moderation, again.

So, here are my comments, which I have confidence Jeffrey will soon personally let through (I fixed a typo and added a link):

Sorry, Jeffrey, but weren’t YOU exemplifying the same “moral scrupulosity” you now protest when you and others somehow found a way a couple of weeks ago to fault efforts by those who love fish to use markets to put water back into overdrawn Western rivers and streams (by finding ways to connect buyers of water with those with absolute homesteaded water rights)?

Further, it seems to me that there are good explanations for the rise of the “moral scrupulosity” that you can’t seems to get around to puzzling out — could it be that there’s a massive rise in corporate statism, or at least in the feeling that corporate statism is out of control? And of the sense that now is an important time for libertarians to point out such statism and to suggest ways to roll it back?

You suggest that our new shibboleth ought to be to “ask ‘do you love commerce?’ to ferret out real defenders of real markets as versus those who just enjoy standing in moral judgement (sic) over the whole world as it really exists.” Besides that being itself a very neat trick of standing in moral judgment of others, I would suggest a different question: do you love corporations? Those state-created entities that institutionalize moral hazard via an absentee shareholder class that was ab initio absolved of residual responsibility for the acts of the the legal fiction they own, and whose CEOs and executives operate without responsibility to any owners?

We have a serious and growing rot at the core of capitalism, easily visible in TEPCO, BP, the entire banking/securities/rating sector, Enron, the auto industry, Big Ag, Big Pharma, you name it. But for you, the real problem is a lack of cheerleaders for our rotten free markets!

Kind regards, your friendly enviro-fascist,

TT

PS: A few recent and relevant posts:

http://mises.org/Community/blogs/tokyotom/archive/2011/05/12/immodest-thoughts-to-fix-capitalism-we-must-get-govt-out-of-corporate-risk-management-rent-selling-business-and-get-shareholders-to-stop-playing-39-victim-39-amp-start-paying-attention-to-risks.aspx

http://mises.org/Community/blogs/tokyotom/archive/2011/05/12/clear-sighted-myopia-a-fossil-fuel-funded-robert-bradley-quotes-ayn-rand-on-energy-but-ignores-that-the-industry-itself-undermines-market-morals.aspx

http://mises.org/Community/blogs/tokyotom/archive/2011/04/05/yes-the-economist-was-right-in-1999-that-industrial-capitalism-was-built-on-limited-liability-but-were-the-resulting-statism-bubbles-and-risk-shifting-really-necessary.aspx

http://mises.org/Community/blogs/tokyotom/archive/2011/04/05/do-contributions-by-corporations-to-39-progress-39-mean-we-ignore-sick-dynamics-set-in-motion-by-limited-liability.aspx

http://mises.org/Community/blogs/tokyotom/archive/2011/05/07/if-we-just-ignore-bp-and-government-39-s-ownership-of-oil-coal-and-other-natural-resources-we-can-see-clearly-that-enviros-just-want-to-destroy-civilization.aspx

http://mises.org/Community/blogs/tokyotom/search.aspx?q=%22moral+hazard%22

http://mises.org/Community/blogs/tokyotom/archive/2010/08/18/mises-on-bp-and-conocophillips.aspx

I am prompted by recent events to follow up on thoughts I emailed to Sheldon Richman a few months back:

I feel strongly that If we want to fix the country (and if libertarians don’t want to be dismissed as irrelevant/patsies for rent-seekers) we need to find ways to restore shareholder ownership of downside risk. This is the only way to back away from the destruction of communities and our natural and government commons by faceless elites through corporations – and the battle for control over Government micromanagement that so often is captured by corporations and serves as barriers to entry.

Insurers would step in to help shareholders and act as a check on management.

The states that create corporations retain power under the 14th Amendment to discriminate in favor of local, unlimited liability forms of corporation or corporations in which shares are not fully-paid up. There is nothing like a substantial risk tail to focus shareholders on managing management.

In addition, allow me to summarize thoughts that I have posted extensively elsewhere. The state has institutionalized moral hazard and exacerbated principal-agent problems via the grant of limited liability to corporate shareholders. This grant is at the core of why investors chose to us the corporate form (as opposed to traditional partnerships and older versions of corporations where shareholders retained substantial risk), and is something that cannot be obtained merely by voluntary transactions – as it involves future potential involuntary victims of acts by the new corporate legal entity (lenders and other parties can of course agree in advance to liability caps and recourse limits). 

This state intervention has set in motion and greatly fuelled the growth of government and battles with citizen groups over the wheel of government — battles in which insider elites, generally acting through long-lived and deep pocketed corporations that are armed with greater knowledge and cloaked with anonymity, have the overwhelming advantage. I earlier summarized these dynamics here: The Cliff Notes version of my stilted enviro-fascist view of corporations and government

As I have noted elsewhere: I am NOT arguing FOR a general rule that shareholders SHOULD be liable for corporate torts. Rather, I：

(2) note that the limited-liability corporate form has enabled risk-generation and -shifting on a massive scale, with innocent third parties frequently being stuck holding the bag (not solely when liabilities exceed assets, but more generally since the cycle of escalating government interventions to rein in corporations perversely ends up raising barriers to entry and giving corporations regulatory “rights to pollute” that curtail liability even when sufficient assets are available),

(3) argue that libertarians should reconsider the grant of limited liability for torts (as opposed to limited liability as to those who contract with the corporation on a voluntary basis) not simply because it is clearly non-libertarian to begin with, but because it has had profoundly perverse consequences (consequences at a serious enough level that state-loving libertarians in effect concede simply by troubling themselves to argue against curtailing limited liability),

(4) note that the most efficacious way to roll back the regulatory state lie in the direction of shifting ultimate responsibility for managing risks to enterprise owners (and ending the counter-productive regulatory risk-management experiment), and