Obama vs Economics

The Wallstreet Journal editorial page scolds Obama today for his temper-tantrum response to energy companies and oil & gas prices. Among the better gems:

You may also be wondering how a higher tax on energy will lower gas prices. Normally, when you tax something, you get less of it, but Mr. Obama seems to think he can repeal the laws of economics.

I remain at a loss as how Obama, or Clinton for that matter (she also supports the windfall profit pyramid scheme), plan on lowering the cost of gas to the end consumer by imposing an increased marginal cost on the supply side of the equation. An increase in the tax rate on oil companies means they get less money for selling the same gas at the same price - somehow this is supposed to either flood the market with supply, or magically lower the price, rather than have the predicted effect: companies lower supply and invest elsewhere, or increase price. As the WSJ article points out, we've tried this sort of thing before, and it had the predictably negative effect of lowering supply from domestic producers.

As an added bonus, gasoline demand appears to be relatively inelastic historically, meaning that if domestic suppliers are increasing supply and/or decreasing supply, the excess demand will have to come from the very tyrannical foreign oil meanies we all seem so worried about. The journal ends with the tragically poignant rhetorical, "And these people want to be President?" - but the real sad part, via instapundit, is that one of them probably will be.

Glimpses of Eloquence and Heroism

Bush today awarded The Medal of Honor to Petty Officer Michael A. Monsoor, a Navy SEAL who fell on a grenade to save his fellow servicemen while serving in Iraq. Bush's words are brief, but eloquent, and his emotion is clear and moving as the video shows. Among the more memorable lines, he quotes:

One of the survivors puts it this way: "Mikey looked death in the face that day and said, 'You cannot take my brothers. I will go in their stead.'"

A full transcript of his remarks is available on the Whitehouse website (link). I only wish those who so easily deride the President's character along with his politics could see more videos like this one. Condolences to the Monsoor family; we need more men like their brave son.

The GOP's 18 Billion Dollar Gorilla

As predicted, Jim DeMint's amendment placing a 1 year moratorium on earmarks failed handily last Thursday, demonstrating once again that the GOP has less short-term memory than Barry Bonds. Last year, earmarks totaled more than $18 Billion, or enough to buy at least 75 Bear Stearns. Despite recent gains, the level of fiscal irresponsibility in Washington is mind-numbing, and yet Republicans, once the party of fiscal restraint, voted against the amendment with the same fervor as their Democratic counterparts. How quickly the anti-tax-and-spend party has cast aside the very identity that vaulted it to power some 14 years ago! The Wall Street Journal reports that, in all, 71 senators voted against the moratorium - what is going on here?

Are Larry Kudlow and I the only ones who remember that the 2006 midterm elections were won on the back of voter uneasiness over corruption and spending? With an alarming number of seats vulnerable this year already, what does such a failure indicate about the GOP's sincerity in both convictions and desire to compete in November? In reality, few expected the amendment to pass, but the wide margin by which it failed is certainly indicative of a fiscal malaise on the part of the Senate. Once again, senators have provided fuel for their own pyre by refusing to take a tough stance that will ultimately endear them with the electorate, and vindicate lofty campaign promises and rhetoric.

In addition to harming GOP senators' chances for reelection, will the failure of the fiscal restraint refrain prove an asset for McCain (who supported the amendment), or simply a tool for pointing out his lack of support from party? With the public perception of McCain as causing strain in the party already the accepted consensus amongst the editorial class, it's not hard to envision claims that he lacks his own party's support on key issues. On the bright side, both Obama and Clinton also supported the amendment (albeit probably to prevent a future attack from McCain). Hey, at least they can agree on something!

Remembering the Grand Wagoneer

Car Lust posted today on remembering the Jeep Grand Wagoneer, the original SUV. My favorite passage:

In stark contrast to today's posh car-based SUVs, the Wagoneer was a demon off-road, tough as nails, and so solid that it was seemingly hewn from granite. It was so tough that my parents skipped out of their high school homecoming dance to go snowdrift-busting during a blizzard in one of my grandfather's early Wagoneers. Evidently this is what passed for fun in 1968 South Dakota.

I have fond childhood memories of the Wagoneer, which was certainly the toughest car I've ever ridden in. I can vividly recall careening off-road along a creek bed in the dead of winter, the Jeep bounding over rocks and stumps on our way to some Boy Scout related quasi-emergency - true childhood bliss. Read the whole thing. (Via Instapundit)

Bill Gates at the U of Chicago

I managed to snag tickets to Bill Gates' talk at the Graduate School of Business yesterday through a nifty online lottery for students. Annoying seating corral-gals aside (what's with that - people in business school can't seat themselves?), the talk itself was pretty interesting. He spoke for about 30 minutes, primarily on the topics of rapid technological growth and how it will impact education, health care and the human machine interface, although he did touch on what what he termed at Davos "Creative Capitalism." A video of the talk can be had here (WMV, 76 MB)

Some of the highlights:

• He opened the talk by replaying his hilarious farewell video that originally aired at CES - celebrity appearances include Jay-Z, Steve Balmer, Bono, Clooney, Obama, and more. Even funnier in person.


• A brief discussion of the evolution of software and hardware industries - he posits an interesting theory that the spread of personal computers, cell phones, etc. works in a positive feedback loop with the growth of software companies - thoughts on this later


• The Future of Interaction - Natural User Interface. This was the part I found the most interesting. He discussed how the shift taking place already with the iPhone and Microsoft Surface will eventually transform how we interact with machines. The next iterations will involve touch, speech and visual recognition, and natural writing implements. Cool.


• Technology and Healthcare - another cool point, where he demonstrated Microsoft's HD View, being used in conjunction with Harvard to create ground-breaking brain imaging. He stressed the idea that technology should be accesible, so that it enables innovation in a variety of fields, rather than hinders it. He also stressed the applicability of Machine learning and AI to solving puzzles like the AIDS virus.


• During the question period, he also addressed a variety of applications of both technology and "Creative Capitalism," particularly in terms of improving inner-city education via charter schools and accountability testing, eradicating malaria and other diseases, and enabling biological research.

My Thoughts:
I think Gates is on to something when he talks about the ability of non-government, privately funded agencies to address certain market failures - particularly the collaboration of the Gates Foundation with GlaxoSmithKline to share the substantial financial risk involved in developing a malaria vaccine. I'm more skeptical, however, when he tries to replicate these successes, and this approach in general, in situations where the markets appear more efficient - for example, his ongoing project to raise African coffee farmer's wages. Improving productivity and efficiency is a good target, as they have done with a separate Indian farming program, but simply seeking to inflate wages a la Fair Trade Coffee isn't.

CUBA LIBRE (?)

Castro Resigns! What's next? More to come, when I'm awake of course...

Re-examining McCain

Now that the nomination on the GOP side seems all but locked up, it's time for those of us who supported other candidates in the primaries to examine the relative merits of presumptive nominee John McCain. The AP, in typically unsourced fashion, published a list of "Main Reasons Conservatives Oppose McCain" (link) that serves as an excellent jumping off point for weighing his shortcomings, and for re-examining what may turn out to be some of his better, more conservative principles. While several of the critiques ("Works with Democrats" and "Kerry Veep") don't really carry much weight, and his fiery temper may well prove an asset, their core criticism are important, and disconcerting. Yet I believe that his overall platform is the best of the remaining alternatives. And while many of his policy positions are in stark contrast to the more "conservative" nominees, upon closer examination actually embody more traditionally conservative values. In many ways McCain may be the closest to a Federalist, small government candidate we'll see in 2008.

As noted by the AP, he opposes the Federal Gay Marriage Amendment. And he should! The Constitution and the Supreme Court have no standing to deal with the issue of marriage (or abortion, or prohibition for that matter), and a true conservative stance is identical to McCain's - he opposes the Federal amendment on principle, but he supports a state-level ban on gay marriage in Arizona. Here McCain mirrors Thompson's unorthodox, but correctly Federalist, stance on Abortion that favors overturning Roe but supports a state-level referendum.

With the important exception of campaign finance reform, McCain's biggest weakness is immigration. The AP writes:

"McCain has been a vocal supporter of a path to citizenship for illegal immigrants, although he now says he understands the border between the U.S. and Mexico must be sealed first."

Here's where I think conservatives are starting to miss the boat. Economics and small government conservatism both tell us that the government doesn't have much business meddling in the labor supply market. And the fact that so many illegal immigrants are employed only indicates that there is a shortage of labor supply. That so many of the same conservative politicians who decry (rightly, in fact) irrational wage increases and bullying union tactics are so vehemently opposed to more comprehensive immigration reform indicates a dearth of rigorous intellectual analysis in favor of gut-check politics.

The problem, one which McCain has only recently figured out, is that merely legalizing the existing workers only fixes half the problem, and only for a little while. Unless we enact comprehensive reform, including an overhaul of the immigration and visa-issuing process, a stronger focus on cultural blending and assimilation, and a rigorous, funded mandate for real border security, we are only further incentivizing marginal immigrants to come here illegally. Yet where McCain trumps several of his former competitors is the understanding that border security alone does not address the very real question of how to deal with the immigrants already here, and how to fill the demand gap in the US labor market. Nor does it approach the asinine, outdated isolationism that embodies our current immigration program. What possible economic reason could we have for limiting the number of visas we issue to post-graduate degree holders other than protectionist nonsense? And for that matter, why is there even a limit on gardeners and dish-washers coming legally, if we know there is such a demand for them that employers are willing to resort to the black market to fill positions?

I mentioned that immigration is McCain's biggest problem, other than campaign finance - that's because campaign finance was the primary reason I didn't support him in the primaries. While I admire his willingness to follow conviction over party, his refusal to recognize the folly of his vote to limit free speech, a vote that spawned the creation of a PAC army doing exactly what the bill was intended to prevent from happening, still worries me. I hope that he will come to a better understanding of the issue, and its practical implications - he certainly has on immigration. Given the primary landscape, and the implications on our national security this election entails, I think it would be folly not to support McCain at this juncture.