December 11, 2008

Conservatism losing steam?

When you get articles in the NR like this one, it makes you wonder if conservatism is a lost cause. Granted Clifford May is a writer for the New York Times, and I'm not familiar with his work, so maybe he's a flaming liberal. But if that's the case, why is National Review running the opinion?

I recommend reading the whole article, however here's two snippets that caught my attention;

You can decrease volatility by reducing demand — by making people “change their lifestyles,” a euphemism for making people poorer. A better way to decrease volatility is by increasing supply.

You can do that by drilling more, for example, in Alaska and in coastal waters. But face two facts: (1) most Democrats oppose drilling and Democrats decisively won the last election; and (2) exploiting finite and limited domestic oil resources does not get us closer to a
long-range solution.

And this;

An added bonus: Alcohol fuels have environmental benefits compared with
gasoline. And wouldn’t you rather be buying your fuel from hard-working farmers,
rather than indolent sheiks, terrorist-sponsoring mullahs, and tin-pot tyrants.

As you probably know, in the U.S. today, alcohol fuel is mostly being made from
corn. As you may not know, the price of corn has fallen almost as far and fast
as that of oil in recent months. Those who claimed that using some corn to make
ethanol was causing higher food prices were either misinformed (any number of
journalists) or lying (those paid to protect oil’s monopoly). The facts are that when corn prices rise, farmers — generally rational folk — plant more corn on
previously fallow land, and put in the additional effort to produce more corn
per acre. So the impact on food prices is negligible.

Further, growing corn is just one way to transform the sun’s energy into liquid fuel. The Brazilians make ethanol from sugarcane and use that in their FFVs — many of which are
manufactured by General Motors and Ford. Dozens of other tropical, third-world
countries could produce sugar-based ethanol — if there were sufficient demand.

Another kind of alcohol fuel, methanol, can be made from crop waste or wood waste, municipal garbage, coal, natural gas and many other substances.

What gets me about this article beside the National Review losing it's mind and printing liberal tripe? Specifically the article assumes a number of erroneous positions.

1. Clifford May buys into the whole global warming agenda. Let's assume for a minute that global warming/climate change is not pure fallacy. He gets into the argument about corn farmers. Yeah, they'd produce more fuel but (a) it ignores the amount of corn they'd need to grow (b) it glosses over the fact that given the limited supply of land, and the limited supply of farmers, that scarcity DOES indeed create a rise in prices - for corn AND the alternative crops that could have otherwise been grown. This is no small point. Crop rises had risen significantly during the oil run-up.

2. The article discounts or ignores short term benefit of drilling. A lot of new oil can be brought on line in less than the 7 years Democrats were spouting as fact. [I'll need to re-locate my sources on that]. Regardless of alternative ways to generate electrical power being developed - wind, solar, or even nuclear, an interim solution to ameliorate the price spikes that we've seen occur. Not to mention that a very significant portion of American oil does in fact come from Canada and Mexico (See here for full details).

“Unfriendly” nations are not our primary source of oil. Only 44% of U.S. oil imports are from members of OPEC, the international oil cartel that is dominated by Middle East producers. Canada and Mexico are the two largest single sources for imported oil in 2007. (Editors note: through 6/08, Mexico has dropped to #3, though this changes seasonally and may revert in 2nd half of year) .

3. Lastly and to me most significantly, he wants government to mandate certain things as a part of the bailout. It doesn't matter what those mandates are, they are wrong. They are lending money, either they will or they won't. Are we to believe that the government, via legislative fiat can make the Big 3 be better companies? Don't the car companies know the car business better than the government? You could argue not, but you'd be wrong. The car companies know what's wrong. That they may not have the stomach to make the required changes is another issue.

But the point is governments DO NOT have the stomach to require the real change, they do not have the understanding to see what is really necessary either. If they did, they'd force Chapter 11 on the car companies. A CAR CZAR? Are you kidding me? Is that supposed to be like a Drug Czar? That worked well :-p

This is socialism!! This is a 5 year plans. And NR is publishing this idea and/or buying into it???
The Big 3 - decades ago made tactical mistakes re: contracts and dealers and strategic mistakes re: product and quality and value proposition of their products. Now they should be saved from their past, but Chapter 11 bankruptcy is the only way to do that. Congress wants plans but any realistic plan involves streamlining dealerships/dealer networks, curtailing the insanity of the UAW and killing unprofitable and brands that can't be salvaged. Congress wouldn't accept that. So its not in the plans. Ergo the plans won't work long term.

Similarly, the CEO don't seem to have the stomach for bankruptcy protection. Maybe it's a not-on-my-watch view they are taking. Punt it to the next CEO. sounds like Congress on Medicare liabilities. Tough measures are needed. It seems Ford might have been best prepared but this needs to be an all or nothing gambit. All in, or fold up your hands gentleman. To put it another way, picture the auto industry as a hospital patient in need of a new kidney. You face the choice of getting a replacement kidney or keeping the patient on dialysis forever. Dialysis is an option in an emergency but it is an imperfect solution. It doesn't work as well as a real kidney. Similarly, the bailout doesn't solve the underlying problem - it keeps the 'patient' alive, but it is not an ideal, long term solution. Eventually the problems will resurface for the auto industry. Would a bailout every 10 years be suitable for you?

Back to Clifford May's point - an electric hybrid or alternative is a better long term solution than reliance on imports. But it's longer term. Fixing this by Wednesday is not in the cards. Having an all-electric-vehicle-America by 2012 isn't realistic either. So why not take that $15 billion (+++ eventually) bailout money and sink it into an independent battery research foundation to be shared amongst the Big 3? Let GM, Ford and Chrysler restructure under Chapter 11, and then come back with access to this shared battery technology. The firm could start out life as a GSE and once it is producing be spun off as a private enterprise. Then the firm could sell licensing to the Big 3 or be bought out by them. In either case, the profits could be used to repay the government funding.

Let's see; No tax burden, competitive salaries with Japanese automakers, streamlined operations for the Big 3, battery technology when it becomes available, and best of all NO SOCIALISM.

Who loses in that scenario? Maybe the UAW workers. But barring repeated future bailouts those jobs are lost long term anyway. Better $40 per hour than $0 per hour. Maybe mother earth loses out by getting more CO2 pollution, but you know what? That's going to happen anyways. When battery technology becomes economically viable it will be used. That's the free market at work. Doing it before then is simply a variation of social engineering and an aberration from efficiency, and logic.

1 comment:

  1. Forget "conservatism," please. It has been Godless and thus irrelevant. As Stonewall Jackson's Chief of Staff R.L. Dabney said of such a humanistic belief more than 100 years ago:

    "[Secular conservatism] is a party which never conserves anything. Its history has been that it demurs to each aggression of the progressive party, and aims to save its credit by a respectable amount of growling, but always acquiesces at last in the innovation. What was the resisted novelty of yesterday is today .one of the accepted principles of conservatism; it is now conservative only in affecting to resist the next innovation, which will tomorrow be forced upon its timidity and will be succeeded by some third revolution; to be denounced and then adopted in its turn. American conservatism is merely the shadow that follows Radicalism as it moves forward towards perdition. It remains behind it, but never retards it, and always advances near its leader. This pretended salt bath utterly lost its savor: wherewith shall it be salted? Its impotency is not hard, indeed, to explain. It .is worthless because it is the conservatism of expediency only, and not of sturdy principle. It intends to risk nothing serious for the sake of the truth."

    Our country is collapsing because we have turned our back on God (Psalm 9:17) and refused to kiss His Son (Psalm 2).

    John Lofton, Editor,
    Recovering Republican


Disagreement is always welcome. Please remain civil. Vulgar or disrespectful comments towards anyone will be removed.

Related Posts Plugin for WordPress, Blogger...

Share This