Plebiscito: la solución para los problemas de Nicolás Maduro

Foto: Reuters

El día de ayer el presidente de Venezuela, Nicolás Maduro, envió  un duro mensaje a los opositores que desde hace mes y medio fueron a las calles a exigir cambios en el gobierno y los culpó de la crisis social que sufre el país. “Fascistas, uno por uno los voy a capturar, uno por uno voy por ustedes”, sentenció Maduro, y afirmó que todos estos grupos “le verán la cara a la ley”.

Pero en realidad no hay nada de “fascismo” en las ideas y reclamos de los líderes y en los cientos de opositores al gobierno bolivariano que hasta el día de hoy continúan protestando. El fascismo es una ideología política que busca instaurar el corporativismo estatal totalitario y una economía dirigista que regule la vida de los ciudadanos. El fascismo es también una ideología que propone la sumisión del individuo ante un ferviente interés nacionalista y universalista en el que no hay divisiones ideológicas y políticas de izquierda, derecha, etcetera y que condena a todos aquellos que se oponen al mismo. Pero, nada de lo anterior es parte de lo que han dicho en la televisión los manifestaste que aún están en las calles venezolanas.  Es más, ¿acaso la República Bolivariana de Venezuela no es todo lo anterior según lo han demostrado sus violentas acciones represivas?

Desde mi visión minarquista liberal sí lo es.  El interés individual de los ciudadanos venezolanos ha sido puesto en sumisión al interés bolivariano de la república que fundó el ya fallecido Hugo Chávez.  Además, el gobierno bolivariano de Chávez y de Maduro en repetidas ocasiones ha negado tener una posición específica en el espectro político de izquierda y derecha, y ha volcado esta discusión al espectro de la lucha constante que debe sufrir el nacionalismo bolivariano ante la amenaza imperialista de los Estados Unidos de América y de sus títeres en otros gobiernos latinoamericanos.  Maduro ha insistido que esta manifestación es producto de una campaña imperialista de parte de los Estados Unidos en contra de su gobierno democrático.

¿Cómo es entonces que Nicolás Maduro acusa de fascistas a los opositores del mismo sistema e ideología que me parece él y su partido han establecido en Venezuela?  y  ¿qué podría el liderazgo manifestante aprovechar de la postura del Presidente Maduro?

Al llamar a la oposición “fascista”, Maduro implica que su gobierno es el antónimo del fascismo y el antónimo del fascismo es la democracia.

Sin duda, el gobierno de Maduro fue electo con mecanismos democráticos y este mecanismo legitimó su gobierno. Sí, su gobierno fue electo mediante una democracia representativa nos guste o no.  Punto y final.

Pero también es uno de los principios de cualquier gobierno democrático y representativo que, en ocasiones, los mismos pueden ser criticados cuando los los líderes han estado en el poder por mucho tiempo.  Existen mecanismos democráticos para resolver estos problemas y Maduro insiste en ignorarlos mientras pone en riesgo la vida de los ciudadanos a quienes prometió defender cuando ganó las elecciones.  Maduro olvida o ignora que una característica que suele acompañar a las democracias es el derecho de sus ciudadanos a opinar distinto y sin temor de ser enviado a prisión por sus ideas.  Cuando un grupo amplio de la sociedad insiste en que es necesario confirmar la legitimidad de un gobierno se pueden tomar muchas acciones que no son necesariamente la represión y la amenaza del uso de la fuerza policial.  Así, una decisión consistente con la democracia de un líder democrático debería de ser utilizar uno de los mecanismos de la Democracia.  El mecanismo idóneo para esta situación de inestabilidad se llama Plebiscito o más específico, un referéndum consultivo.  Al realizar un referéndum, el Presidente Maduro podrá consultar a los venezolanos que lo eligieron si están de acuerdo con que el continúe gobernando y fortalecerá la legitimidad de su gobierno con el pueblo venezolano.

Al inicio de las manifestaciones que ya han costado la vida de varios ciudadanos venezolanos, los reclamos eran la escasez de productos básicos, los altos índices de criminalidad y los reportes de violaciones a los derechos humanos que han manchado el gobierno de Nicolás Maduro. El Presidente Maduro es la única persona con el poder de evitar que una sola gota más de sangre inocente sea derramada.

Si el Presidente Maduro es en realidad un líder democrático permitirá que cualquier opinión, por muy débil o pequeña que sea,  sea considerada no una amenaza fascista sino un sentimiento de inconformidad válido de discutir.  En las manos del Presidente Maduro está que su gobierno sea recordado como  el de un absolutista del corte “L’État, c’est moi” o como un demócrata forjador de la Libertad y la Democracia en imitación del gran líder Nelson Mandela. Ojalá y la palabra referéndum empiece a sonar más y más en las próximas semanas para que la paz regrese al vecino país sudamericano.

Thoughts on climate change

Last week I heard a sermon on climate change (no, it was an actual sermon). I’m roughly agnostic on the existence and degree of climate change, but I err on the side of assuming it is a large problem of externalities with no obvious property rights solution and will have costs. And I think that under those assumptions there is an important moral element to it. With that in mind, below are some of my thoughts on the weak points of the sermon:

1) Authority is only a starting point; we cannot defer ultimate responsibility to authority. If an expert or someone I trust tells me something about X, and I don’t have any prior knowledge about X, then I believe them. In the case of global warming there are two basic sorts of information you will get from information: a) diagnosis (temperatures could rise X degrees in the coming century), and b) prescription.

The climatology involved in a) is well above my pay grade, and so rather than undergo the costs of informing myself on the existence or importance of climate change, I just figure the truth is somewhere in the middle of what reasonably informed people say and instead focus my effort on my areas of comparative advantage. Now the actions in b) are typically about reducing waste and that’s well within the realm of economic thinking, so I’ll comment on that!

1b) Blindly deferring to authority to assuage your guilt is wrong and bad. Someone says you should drive an electric care to save the environment? Don’t do it before thinking through the matter, this is a big decision for most people. Where’s the energy coming from to power that car? (Coal. That is burned hundreds of miles away from your car… that’s like having a car with a hundred mile long drive shaft.) How much energy and material does it take to make the car? (Hint: look at prices.)

2) It’s called climate change, not climate universal and uniform worsening. If climate change means a warmer climate for Canada and Russia, that will come with extended growing seasons and savings on winter heating costs. Burma? It’s probably going to suffer a lot. Climate change will surely have the biggest impact on the poorest people in the world, and this is where I see the real moral issue because…

3) We can respond to climate change in a way to reduce suffering. Specifically, we can open borders. First off, that would increase human well being, with an enormous benefit to the world’s poorest people. Second, the effects of climate change won’t harm the poor as much as they could. Is climate change still a bad thing if we do this? Sure, but if a building is burning, why not help people get out?

Loose ends:

Should I recycle everything? Only if it will actually help. Recycled aluminum is chemically identical to virgin aluminum and uses fewer resources to produce (which is why it’s cheaper!). Recycling paper creates a lower quality product, uses a lot of energy and creates pollution.

Paper bags are brown, that’s good, right? Plastic bags are almost ethereal; they use a fraction of the material per unit of carrying capacity resulting in big savings. Yes, there are offsetting costs to using plastic, but it isn’t as simple as “this brown, it must be natural and therefore good!” And while we’re on the topic, brown M&Ms are stupid. There’s a layer of white sugar between that brown outer layer and the actually brown chocolate. Brown M&Ms are as unnatural as any of the other colors.

Should I buy local? Maybe if you live in California, but not if you live in Massachusetts. The biggest environmental impact of food is growing it; plowing fields, planting, watering (outside where the water could just evaporate!), and harvesting use a lot more energy than transportation. So if you live in a place with poor growing conditions, then buying local only does more harm. That said, fresh food tastes better, so by all means pay the cost if you value the flavor, just don’t delude yourself into thinking you’re reducing energy usage by doing so.

Consider opportunity cost and present value! So you’ve got a solar panel and now electricity is free for the next 20-30 years! Or you’ve installed new modern insulation for your home. Or you bought a car that costs less to run (and you’ve promised not to increase your usage). But at what cost? If your solar panel used 40 years worth of energy to build and install, then you’ve done more harm than good. And you’ve done that harm upfront. Even if one of these investments has a positive return (it saves more resources than it uses), you should still consider whether it’s a good investment. We don’t have unlimited resources, and that means that if you spend $10,000 on insulation that will give you a 0.4% ROI then you’ve given up the chance to invest that money into something that will generate more good.

A taste of local flavor: Remington Outdoor Company to announce major expansion to Huntsville

Remington Outdoor Company to announce major expansion to Huntsville

“The site will rank with ROC’s largest facilities. Ilion, N.Y., is home to the largest facility at more than 1 million square feet, followed by other sites such as its ammunition plant in Lonoke, Ark., and its factory in Mayfield, Ky.

Sources say manufacturing operations in Ilion will not be affected by the expansion and there are no plans to move manufacturing from that site, where Remington has been building firearms for nearly 200 years.”

I have to wonder how much Governor Cuomo’s anti-gun policies contributed to this decision.  We will see if Remington holds true to their word but this author is predicting the Ilion factory to be gone in the next five years.

I would also like to suggest that any New Yorkers check out this page for information on anti-gun restriction protests happening this spring.  While they are not a libertarian organization there is some semblance of solidarity.

Thousands of Connecticut Gun Owners ‘Flout’ New Registration Law

THOUSANDS OF CONNECTICUT GUN OWNERS ‘FLOUT’ NEW REGISTRATION LAW

The most prescient point from State Senator Tony Guglielmo is “I honestly thought from my own standpoint that the vast majority would register.” He then added, “If you pass laws that people have no respect for and they don’t follow them, then you have a real problem.”

It seems that in many cases the average person is more libertarian than they realize.  Or to use the phrase provided by pseudo-libertarian author Robert Heinlein:

“I am free, no matter what rules surround me. If I find them tolerable, I tolerate them; if I find them too obnoxious, I break them. I am free because I know that I alone am morally responsible for everything I do.”

The Republican Proposal on Illegal Immigrants and, the French Are Coming

I am responding to a Republican radio and TV ad about illegal immigration. It’s presented as the Republican counter-proposal or response to Pres. Obama demand for “comprehensive immigration legislation.” It displays involuntarily some of the main fallacies Republicans commonly entertain in connection with illegal immigration and other topics. It demonstrates disturbing collective ignorance in my camp. (I am a registered Republican.) Here are four major fallacies in that short ad:

1 The ad continues to be based on the false notion that there exists an alternative to illegal immigration in the form of some orderly visa queue. In this perspective, illegal immigrants are rude, unprincipled line jumpers. Everyone hates such people.

In fact, there is no such queue. The average unmarried Mexican has no way (zero) way to come live in the US legally. (An unmarried Mexican can try to marry a US national or legal immigrant to gain a quick visa. Some do. This is hardly a more principled way to immigrate into this country than overstaying a tourist visa, for instance.)

2 The Republican proposal demands “no amnesty.” The Republican proposal contains an amnesty: amnesty for those who entered the country illegally. It rewards those who took the matter into their own hands against other foreigners who would like to move to the US but do not wish to violate laws to do so. Again, illegal immigration is the only way to enter the US and stay for almost everyone in the world.

There is no way to regularize the status of current illegals living in this country without an amnesty of some kind. I predict that neither the federal government nor the individual states will ever engage in the massive police action that would be required to hunt down illegal aliens in their homes, places of work, churches, and schools (including kindergartens). Everyone else also knows this to be true. Republican leaders have yet to acknowledge this simple fact of life.

3 The Republican proposal would require illegal aliens to “learn English” as a condition of their legalization. This is ill-informed as well as downright stupid.

First, illegal aliens are very busy learning English. They are all aware of the fact that knowing the main local language is a condition of real economic success in this country. To say otherwise is to make a tremendously xenophobic statement by implicitly calling immigrants stupid. That’s in addition to ignoring the facts on the ground.

Second: What are we going to do with Juan if he flunks his English midterm? Throw him over the border? How about Mr Lee, who has been here (illegally) for fifteen year and who owns a restaurant employing six people? Do we ship him back to Canton if he gets two C- in a row on his English grammar test?

Plus, what is the federal government going to do when some ill-intentioned academic reveals that a significant percentage of American-born US citizens also flunked the midterm, the same midterm?

Is this “obligation” to learn English, specifically, even constitutional? The last time I checked, the US had no official language. Why not Navajo?

This all smacks of the insane dreams of comfortably monolingual individuals who believe they would master Spanish if they could only clear a dozen Saturday mornings. Do these people take advice from anyone? Do they read anything?

“Securing the border” has become a mindless Republican incantation. It’s increasingly irrelevant for the purpose of immigration control, at least closing the southern border is. Several relevant points. At them same time as we were having our endless economic crisis killing thousands of jobs, the Mexican economy was doing better than before. And, Mexican population growth has almost ceased. The huge hordes of hungry Mexicans massed at the border to jump in and take over everything American have evaporated. Mexicans have almost stopped coming. Those who do use a student visa or a tourist visa and just don’t go home until they are good and ready.

Securing the border may serve a purpose in the context of a drug war. If that’s the issue, Republicans should have the coraje (same as “cojones” but more polite) to tell the truth.

And now, what the Republican leadership is not doing or not doing enough: Shout to the rooftops that legalizing illegals and awarding them citizenship are only artificially linked (by artful Democrats seeking free votes for generation). European countries have established successfully for many years the fact that citizens of another country can live in forever without acquiring political rights at all. (A recent well publicized Swiss vote on immigration does not deal with this matter.) Fellow immigrant Nikiforov and I explored this idea in depth in connection with the US and Mexico in our article “If Mexicans and Americans Could Cross the Border Freely” featured in the libertarian journal Independent Review.

Here is a real immigration issue the Republican leadership is not attending to: Tens of thousands of younger French people want to move to this country. The issue is so serious that there is a brand new French cabinet post dedicated to stemming the flow. Many of the would-be French migrants possess to a high degree the kind of training Silicon Valley companies say they can’t find. Many of the same well-educated French citizens who wouldn’t dream of opening a lollipop stand under French conditions discover that they possess a big entrepreneurial gene a couple of years after landing here. Let me also point out that the quality of food improves automatically after a surge of knowledgeable and demanding French customers. (Yes, some stereotypes are well founded.)

At this point, there is no legal way to bring in these high quality immigrants. Our immigration system is forcing into illegal immigration the most determined and least law-abiding segment among exactly the kind of immigrants we want.

Obama: “I can do what I want”

Obama: “I can do what I want”

Let us contrast this to the president that the founding fathers of America intended.   As Alexis de Tocqueville put it in the early 19th century, the president “has but little power, little wealth, and little glory to share among his friends; and his influence in the state is too small for the success or ruin of a faction to depend upon his elevation to power.”

How far we have come…

Keynesianism, the Global Economy, and Responsibility

Economist Joseph Stiglitz has an op-ed out in Project Syndicate lamenting bad policies for the current economic stagnation of the West. This response comes from economist Peter Boettke, and I think it is an important and woefully neglected one:

Since 2008, and before, [Stiglitz] has been constantly complaining about neo-liberal policy and how its lack of attention to the appropriate regulatory framework and disregard for fundamental policy priorities has produced the mess we are in.  In fact, he made the argument very simply even while he was in positions of tremendous political power in the Clinton administration and at the World Bank — if only the world would listen to me, and engage in the appropriate interventions then the mess would be avoided.  But who were the so-called neo-liberals that weren’t listening to him?  What neo-liberal thinker had the same powerful positions that he held?  Did F. A. Hayek or Milton Friedman actually come back from the grave to serve as head of the CEA or as Chief Economist at the World Bank?  Or did all this disruptive inequality and global imbalance happen on the watch of other thinkers.

I think Boettke is right, but I also think both economists are wrong in a sense, too. First of all, global poverty over the past twenty years or so has been halved thanks to the very neoliberal policies that both economists are disagreeing about, and that both economists have more or less endorsed. With this important, praiseworthy accomplishment in mind, why would these guys want to spend so much time pointing fingers at each other?

I know why they are pointing fingers (because of the terrible shape that Western economies are in), but I am a little baffled at the audacity of Stiglitz and other Keynesians who have held the levers of power for sixty years to point the finger at something other than themselves.

Really quickly: Some of might ask why Boettke and Stiglitz agree on neoliberalism abroad and disagree on policy at home. My short answer would be because the West already has the institutions (property rights, other individual rights, etc.) that economists have identified as necessary for a market order, so their debates about policy occur within the same theoretical framework. Post-colonial states (“developing states”) have virtually none of the institutions that the West, and so it easy for economists with different theoretical paradigms to agree on generalities concerning these developing countries (“they need to open up to world trade and focus on property rights before they do much else”). Does this make sense?

Order, Order, Order

In the conventional wisdom, as you become older, you tend to like order more and more. That is, with age, one is supposed to become more “conservative” in the traditional sense of the term. Personally, I have escaped the curse. Instead, I find myself resenting more and more the growing imposition of petty rules by public entities.

It began a few years back when the city of Santa Cruz banned sleeping. OK, let’s be honest, you may still sleep legally in your bed. The city made it illegal to sleep in public. It’s true that the homeless are a plague here. Many are in a near-constant state of NDUI (not driving under the influence). Many are poor lost souls who are a danger to themselves and occasionally to others. Thus, three or four years ago, a local shopkeeper walking to work was knifed to death in broad daylight. Her killer had spent the previous 48 hours in a shelter muttering about and to his Bible. No one reported him,of course because he had not done anything illegal until then. Next!

The ban on sleeping made me acutely uncomfortable at the time. First, it was plainly inhumane. Second, if you prevent human being from doing what their human nature demands, they will find another way to do it. So, informal camps proliferate in the wooded areas juxtaposing the town. Here, in Central California, we are in a period of prolonged drought. Do we need unattended campfires and campfires attended by people who don’t play with a full deck?

A petty use of power, municipal power, applied in a search for orderliness led to greater and far more dangerous disorder.

I don’t even know if there are enough night shelters for everyone who wants one. I know that there will always be sane but houseless people who don’t want to be in a shelter, by choice. A sizable part of me respects their choice. You may not force people in places where they don’t want to be without due process. The Constitution is completely clear on this. And, I am not in favor of more shelters anyway because I believe they attract the economically feeble to Santa Cruz thus aggravating the problem.

You don’t have to be a “soft” to want the Constitution respected.

Now, since then, there as been a multiplication of city rules. This happens while the crime rate plunges. The fewer crimes the more rules. The crime rate is tanking all over the country; Santa Cruz city rules can hardly take the credit. What am I to think?

Here is a quiz: The Santa Cruz City Council is dominated by:

a Republicans;

b Democrats;

c Leftists to the left of the Democratic Party

Not far is the independent harbor. I used to admire the Santa Cruz (Small Yacht) Harbor. It was the only government and quasi-government organization I knew that stayed clear of reliance on taxes. Harbor users -in their many guises- supported the maintenance of the harbor. They included boat slip renters like me, of course, but also beach goers whose coffee paid for the rent the coffee shop paid to the harbor in return for an excellent commercial location. Harbor users also included patrons of the good restaurant that dominates the harbor entrance with its million dollar view. The restaurant goers gladly paid solid parking fees, of course, and a portion is remitted to the harbor.

I also liked the way the harbor administration put to work underused resources such as the large general parking lot reserved for boat owners that tends to stand more than half empty after four pm. The harbor had an agreement with the self- same restaurant to hold musical barbecues once a summer week evening on the beach it, the harbor, administers. The restaurant got its profits from the sale of barbecued food and the harbor pocketed full parking fees from those not holding slip stickers. The arrangement drew crowds. It was all a little bit untidy but not much. Twice, on such a barbecue evening, I leaned spontaneously out of my truck to congratulate the officer directing parking and to assure him, unsolicited, that this particular slip owner, me, was not (NOT) inconvenienced at all.

And then, someone retired and there was a new sheriff in town. Under the new harbormaster, several things that were allowed became forbidden overnight. The harbor hired a full-time parking enforcer, like the town next door. Suddenly, the one harbor employee the average harbor user interacted with was the parking enforcement officer. This necessarily hostile and heartless functionary supplanted the traditional harbor officers who save boats, and sometimes lives, every weekend. The mood changed and not for the better. I am not speaking for bitterness about parking fines here; with my slip rental goes a permanent parking sticker permit.

Maintaining a stricter order often requires stricter rules that make most people unhappy. Eve if it’s only a little bit unhappy, the bad feeling accumulates.

Then, stand-up surfboards had to be segregated from boats. Boats are limited to 5 m/h inside the harbor anyway. Some boats under sail inside the harbor regularly exceed the speed limit. Those are steered by aces. How bad can a collision be under these conditions, really? Has there been a single collision involving a standup board? Did a boat owner complain about stand-up boards being in the way? Maybe. Did ten complain? I doubt it. (I have not asked; I don’t trust I would get a valid answer I could cite.) My point is that one can always find a complainer or two. If you handed out free ice cream to poor children and cleaned carefully afterward, there would be some curmudgeons to object. I am sure there are boat-owning slip renters who complain even about the ocean swells. But everyone knows that good harbors are bustling with activity. Those who detest the corresponding moderate disorderliness have no business in a harbor at all. They should be reminded of the fact that there is a long waiting list for their slips instead of listened to.

The art of civilized administration requires that complaints be ignored up to a point. It also includes remembering the second most important American maxim: “If it ain’t broke, don’t fix it until it is.”

Then, there are the new signs that shout at you that fishing from docks is “prohibited.” For as long as I remember, 20 year-plus, children fished from the docks. It was an excellent, healthy, commendable form of leisure for kids, including poor kids, if you ask me. Were there ever any accident as a result, even one? I don’t think so. The signs affirm further and vengefully that the prohibition is: “strictly enforced.” No joking with serious matters here! We are not kidding. Don’t even think of enjoying yourselves!

The posted “minimum” fine is $174. Think about it: Your otherwise well-behaved 12-year old gives you the slip to try to catch a sardine or two. He gets caught. You are into it for about twenty hours of minimum wage. This comes close to a violation of the Eighth Amendment, prohibiting cruel and unusual punishment, I think. There may also be here a subtle breach of contract involved here. When I first rented a slip in the harbor, fishing from the docks was common practice. The locked dock that was part of the rental gave me special access to a pleasant fishing spot. Then, after twenty years, the contract becomes unilaterally modified to my detriment. The harbor did not bother to re-negotiate the contract.

I agree that this is a very small kind of tyranny but it’s tyranny all the same. The habit of being oppressed nearly always begins small in democratic countries. Our tiny liberties are eroded slowly until we don’t even remember we ever had them.

In the same period, I have heard the crew of one of the few remaining commercial fishing boats left in the harbor complain that they are made to feel unwelcome. I have no proof that their allegation is correct but, I wonder, why would they make it up? It jibes with the other forms of turning of the screw I mention. There is no doubt that the harbor would be neater without fishing boats. Fish smells and the rushed commercial fishermen drop the occasional dead fish into the harbor water. And, well, it’s a yacht harbor, after all. And, by the way, if slips only went to middle-aged nuns who work as librarians, the harbor would be even neater.

Occasionally, I take my grand-daughter to buy live crabs directly from a boat. It’s an expedition for her. It’s unforgettable. It shows her that some food does not come from the supermarket. But who am I to lay claim to such privilege? And who the hell are the commercial fishermen to insist on making a living from a harbor originally created by the Army Corps of Engineers with tax money?

On 2/3/14, coming out of a restaurant, my family and I were treated to a wonderful geyser-like spout of water reaching much higher than a three storied building. No, it was not a whale; the scene was a couple of miles inland, on a busy commercial artery, at a street intersection. We watched in utter fascination for more than fifteen minutes. (I posted a still picture of the event on my Facebook. Look for it.) I am obviously no expert, but I believe that while I looked on several hundreds of thousands of toilet flush- equivalents of city water were lost forever. I know, I know, accidents happen; no system is perfect. But why did it take so long to cap the leak? There is a fire station five or six blocks away.

I almost forgot to tell you: At the very same time, the same evening, there was an important meeting of the Santa Cruz Water Commission to make recommendations about water rationing to the City Council in view of the current drought.

Would I make this up? Would I dare? Do I have the talent?

In my immediate surroundings, the only rule or law I have seen abolished in the past twenty years or so concerns dogs. They used to be prohibited on the main commercial drag of Santa Cruz, Pacific Avenue. The prohibition has been rescinded. Dog owners are numerous and determined. Their victory renews my faith a little in democracy. I wish I could cite more examples though.

Sometimes, the ugly thought crosses my mind that public entities are increasingly run for the benefit of their nominal employees. Karl Marx was almost right about classes, maybe . (See, on this topic: “Karl Marx Was Right (Pretty Much)“)

More on local government action: “Coyotes: How Government Bureaucrats Think

“Illegal Immigration: Bad Faith and Mental Confusion”

I wouldn’t change a word to this old posting.

Risks Of Regulation

A bit dated but still very relevant.

Regulation; the four letter word of the business world.  Many people see regulation as a protective shield from the ‘dangers’ of the businessman; a way to protect people, property and the environment.  The oil industry is one of the most heavily regulated enterprises in the United States.  Despite being intended to protect us; these regulations failed catastrophically on April 20th, 2010 when the Deep Water Horizon oil rig suffered a mechanical failure resulting in an explosion which sank the rig two days later(1).  Yet, when the disaster happened, we were met with pleas for more government oversight and more red tape.  The regulations on that industry, both in the Gulf Mexico and throughout the country, helped cause the Deepwater Horizon disaster and removing them would help prevent similar disasters in the future.

Regulations in the Gulf of Mexico begin with the Minerals Management Service (MMS).  Created in 1982 due to the Federal Oil and Gas Royalty Management Act the MMS “both regulates the [gulf oil drilling] industry and collects billions[of dollars] in royalties from it”(2, 3).  The MMS’s responsibility to regulate includes monthly inspections, issuing safety documentation, and issuing safety citations(3).  Royalty collection is based on number of barrels of oil removed and varies from well to well.  The MMA also provides  “royalty relief“ to a number of rigs based on previous legislation. Until November of 2000 the royalty relief was issued based on the Outer Continental Shelf Deep Water Royalty Relief Act of 1995, better known as DWRRA.  This act “relieves eligible leases from paying royalties on defined amount of deep-water production”.  At depths over 2,526 feet oil companies did not have to pay the United States royalties on 87.5 million barrels of oil, between 1,312 and 2,625 feet the relief was 52.5 million barrels and between 656 and 1,312 feet the relief was only 17.5 million barrels.  While this act expired in the year 2000 it was replaced by an incentive program that allowed royalty relief to be “specified at the discretion of the MMS”(4).  This incentive program provides more relief if a drilling site is “more expensive to access” even if it is at the same water depth as another rig receiving less relief (2).  The royalty relief system provides incentives for Oil Rigs to operate in deep waters, especially those classified as “Ultra-Deepwater” by reducing the royalties paid on those sites(5).

While not specific to the gulf, there are a variety of moratoria on drilling throughout the country.  These moratoria take two forms.  The first set, known as “leasing moratoria” are general bans on drilling in select areas , the second set are temporary bans due to specific incidents.  Since   the fiscal year 1982 congress has denied funds to the MMS to “conduct leasing for the specified Outer Continental Shelf areas”.  Currently there is a “blanket moritorium” on leasing in effect “through 2012” that covers a large portion of both the East and West coasts( 2).  One of the largest bans on drilling however exists in the Arctic National Wildlife Refuge(ANWR).  Located in the “northeast corner” of Alaska over ten million acres of land are off limits to drilling.  In this wildnerness it is estimated that there exists “between ten billion and sixteen trillion barrels of oil” that could supply twenty percent of U.S. demand for nearly thirty years(6).  The most recent temporary bans have been a result of the Deepwater Horizon disaster.  A “30-day pause in offshore drilling” followed the sinking of the Horizon rig(11).  This did not only cover BP’s rigs but all offshore drilling “based on water depth”(7).  That ban was removed by a federal court, but was replaced with a revised ban that will be in effect until November, 2010(7).

Beyond physical limitations on drilling there are also economic regulations.  There are a number of federal subsidies and tax breaks for the drilling industry.  David Kocieniewski says that “examination of the American tax code indicates that oil production is among the most heavily subsidized businesses”.  These tax breaks occur for a number of reasons.  Many are simply to lure oil companies to American shores, others were “born of international politics” or “date back nearly a century”(8).  Beyond that the United States government has put “Liability Limits” on drilling operations.  The Oil Pollution Act of 1990 limits an oil companies liability for damages to only $75 million dollars.  Any remaining damages, up to $1 billion, are payed through the Oil Spill Liability Trust Fund.  This fund is “financed primarily through a fee on imported oil”(1).  Senator Robert Menendez from New Jersey recently introduced bill, S. 3305 which would raise that cap to $10 billion(9).

All of these laws and regulations have one thing in common.  They increased the probability of a catastrophic oil spill in the Gulf of Mexico.  Each regulation increased the risk of such a spill in some way and when combined they resulted in the disaster that is causing massive destruction in the Gulf today.  The Minerals Management service was organized to be the overarching regulatory body for the Oil Industry.  Why did it fail in its duty?  Why did “spills from offshore oil rigs…in U.S. waters more than quadrupled this decade” despite the MMS’s oversight(10)?  This question was answered by economist Walter Block in his book The Privatization of Roads & Highways (12).  Quoting Cecil Mackey, former Assistant secretary of transportation, he says:

“As the more obvious regulatory actions are taken; as the process becomes more institutionalized; as new leaders on both sides  replace ones who were so personally involved as adversaries in  the initial phases, those who regulate will gradually come to reflect,     in large measure, points of view similar to those whom they regulate.”

Quite simply, the MMS adopted the views of the Oil Industry completely negating their ability to regulate it.  Congressman Nick J. Rahall confirms this saying “MMS has been asleep at the switch in terms of policing offshore rigs”.  Using numbers supplied by the MMS in the prior 64 months before the incident “25 percent of monthly inspections were not performed”(3).  Are we to believe another agency would be any more efficient?  Bureaucracy and corruption are not the only things to blame however; legislation played a vital role in this disaster as well.  DWRRA, for example, incentivized the risk to drill in deep waters.  Under DWRRA the greater the depth being drilled the greater the royalty relief amount.  These waters are inherently less safe to drill in.   It is easy to compare the difficulties in dealing with a site 5000 feet below the ocean against one 500 feet below the surface.  These incentives were made worse when DWRRA expired.  Under the new program “the most economically risky projects would receive the most relief”, safer projects on the other hand would receive “little or no relief”(4).

While acts like DWRRA incentivize the risk of deepwater drilling the greater incentive to drill in the Gulf of Mexico is simply that there are so few places to drill in the continental United States.  The United States Exclusive Economic Zone extends “200 nautical miles” from all of it’s shores(2).  Yet, much of this area is off limits to drilling.  The “blanket moratorium” issued by former President George H.W. Bush in 1990  restricts drilling in “all unleased areas offshore Northern and Central California, Southern California except for 87 tracts, Washington, Oregon, the North Atlantic coast, and the Eastern Gulf of Mexico coast”.  The Gulf of Mexico is the only economically viable offshore area left for them to drill.  This of course pales in comparison to the Arctic National Wildlife Refuge.  Most of the 10-million-acre area is not even adjacent to the ocean, surely drilling on land or in shallow water is much safer than drilling 5000 feet under the ocean(6).  Beyond helping to cause the spill in the first place the government is increasing the risk of future disasters.  The temporary ban issued in response to the Horizon spill “neither improves safety nor mitigates risk”(11).  By forcing drilling to stop you immediately cause a number of problems.  Reentering a location is as dangerous, if not more so, than the original drilling operation.  Experienced workers have been fired, laid off, or relocated and will need to be replaced with less experienced ones.  Equipment in worse quality will be all that remains when the moratorium ends(11).

The economic regulations were the proverbial straw that broke the camel’s back.  A single tax break for the Deepwater Horizon oil rig covered “70 percent of the rent” or “$225,000 a day”.  Or, as policy analyst Sima J Gandhi describes it “We’re giving tax breaks to highly profitable companies to do what they would be doing anyway”(8).  These breaks are not only an unfair advantage, they incite these companies to make riskier choices.  If the potential cost of the Deepwater Horizon rig wasn’t offset by these breaks it may not have been economically viable to drill in such a dangerous location.  On top of the lower cost of the initial operation; the Liability Caps ensured that any potential risk was marginalized by the government.  The $75 million limit that has been in effect since 1990 was a message to the industry to attempt increasingly risky drills(1).

The oil companies should be liable for the full cost of any damages done by their rigs.  The worry that “operators and nonoperators in the U.S. Gulf of Mexico will be unable to obtain adequate protection from insurance” is totally unjustified (1).  If the site is not economically viable then there is no reason to drill there.  If BP and Transocean knew they would have been liable for all damages they would not have received a citation for “not conducting well control drills as required and not performing ‘all operations in a safe and workmanlike manner'”(3).  There would have been an incentive to spend money on safety, training and equipment instead of the incentive to take risks knowing they would be protected.  Or as one lawyer explained the situation “arbitrary liability caps are just not reasonable.  You cannot decide the expense of a disaster before it happens.  Liability caps allow companies like BP to avoid bearing the responsibility for the full cost of the damage they inflict”(9).

The oil has stopped flowing from the bottom of the Gulf; for now.  The question remains: How can we prevent this from happening again?  There, of course, is no easy answer.  Accidents, mistakes, and disasters can never be guarded against completely.  We can however mitigate the risk involved in those dangerous operations that are needed for the sake of humanity.  The best way to increase the safety of the oil industry is to remove the regulations that incentivize the risks involved in their industry.  Preventing drilling in safer areas, tax breaks, royalty reductions, liability limits; all these things make an already dangerous prospect that much more perilous.  We need to neither help nor hinder these companies, they must succeed or fail on their own merits.

Sources available upon request.

“Bizarre Conservative Ideas About Immigration”

This old posting is suddenly relevant again. Go to indented paragraph directly if you are in a hurry.

The Keystone Pipeline

You may have heard recently that the appropriate federal agency declared  the Keystone pipeline would pose no significant dangers to the environment. I doubt this will stop the green fanatics. Nor is the probability that oil no refined and used in this country will be mostly exported to China where environmental laws are lax and not often enforced. Rationality is not their forte, as a rule.

It appears that there may be a chance to influence the decision to build or not via an on-line petition. I don’t know what is the probability of its working is but the cost seems so low it would be a pity not to try a click. Besides, enough signatures may make Mr Obama squirm a little irrespective of the decision he makes.

Go to:   buildKXLnow.com [it’s actually buildKXLnow.org – bc]

Go to: “Go to Make Your Voice Heard,” [it’s  actually the ‘Take Action Now’ tab that you’ll want to click on – bc]

A simple sign-up box will appear.

The State of the Union and the State of our Liberties

Nevertheless it is important not to fall into the delusion that President Obama presents the greatest danger to the culture of liberty. A historian looking back a hundred years from now is likely to group the Reagan, Bush I, and Clinton presidencies together as an era when the state receded or at least did not grow, as measured by regulatory and fiscal burdens on our lives. But Bush II relentlessly increased domestic spending and created more government involvement in health care with the Medicare D program for prescription drugs. It was President Bush who initiated many of the NSA programs.

In short, there are more similarities between Bush II and Obama than their supporters or detractors care to acknowledge. And almost all of the similarities suggest that the risks to our liberty today transcend the actions of any particular politician.

From John McGinnis. Read the rest.

Seven Ways Libertarians Sometimes Run Off the Rails

I’m a dedicated libertarian but my first allegiance is to accuracy.  It pains me when I see libertarians making arguments that are inaccurate, irrelevant, or just plain wrong.  When they do so, they do themselves and our movement a big dis-service.  I list seven such arguments here.  More could be added.

  1. The Fed is privately owned. This is true only superficially. Member banks own shares of stock in one of twelve district Federal Reserve Banks and they receive dividends on those shares. But they have little in the way of genuine ownership privileges. They cannot sell their stock and their voting rights are very limited. The President of the United States appoints the Board of Governors. Just because a legal arrangement is given labels that suggest private ownership, that doesn’t make it so.

  2. The Bureau of Labor Statistics disguises the true unemployment situation by excluding workers who are “discouraged,” i.e., not seeking jobs. This is true of the U-3 unemployment figure which is the most widely cited figure, and the one the Fed says it is targeting. That figure is currently about 6.5%. The BLS also publishes its U-6 figure, which includes discouraged workers and currently stands at around 13%, down from about 17% at the height of the Great Recession. The BLS is not covering up anything here, although politicians may certainly choose to emphasize one figure or the other depending on what ax they’re grinding. Which is the “true” unemployment rate? There’s no such thing. The figures are what they are and observers can make of them what they will.

  3. “Chain-weighted” versions of the Consumer Price Index are politically motivated.  These adjustments are intended to recognize the substitution effect, the classic example of which is when the price of beef rises and the price of chicken doesn’t, people eat less beef and more chicken. Peoples’ cost of living rises less than it otherwise would. CPI increases as measured by a chain-weighted formula reflect this fact, and the resulting price inflation estimates come out lower than under the old approach. That flashes a green light to some conspiracy theorists. While these adjustments are tricky business, substitution effects are real and the attempt to compensate for them should not be impugned.
  4. The Consumer Price Index is politically manipulated by excluding food and energy. There are many versions of the CPI. One of them excludes food and energy because those prices are usually very volatile. That figure may be useful to economists who want to filter out volatile effects and focus on secular trends. Again, the figures are what they are, and politicians or for that matter we bloggers can use or misuse them as we wish.

  5. “Banksters” control the U.S. government. There is a grain of truth in this one. The big banks are both victims and beneficiaries of government dominance of banking and finance. The reality of government regulation is that regulated firms employ many very smart and very well paid individuals who are constantly finding ways to manipulate or sidestep the regulations to which they are subject. The fact is that the regulators and the regulated are very thick. Banking and finance are controlled by a cabal of government and Wall Street firms and individuals. It’s a mistake to say that either group totally dominates the other.

  6. Global warming is a myth and a scam. Ron Paul, whom I admire very much, blotted his copy book when he said on Fox News, “The greatest hoax I think that has been around for many, many years if not hundreds of years has been this hoax on […] global warming.” A few basic facts are beyond dispute: (a) carbon dioxide is a greenhouse gas, (b) CO2 levels are at an all time high, and (c) human activity is the primary cause of the increase. Beyond that, the evidence starts to get sketchy and incomplete. We do seem to have melting polar ice caps, record high temperatures in some places, droughts, etc. But overall there has been almost no temperature increase during the last ten years or so.  Projections of rising temperatures and rising sea levels appear to be too pessimistic. This is a very complex issue and one where biases can overwhelm us if we aren’t careful. Statists are prone to accept the global warming thesis because they see it as a way to increase state power. Libertarians want the issue to go away for the same reason. This would be a great time for all parties to step back an exercise some epistemic humility. There’s a great deal about this issue that we just don’t know.

  7. Let’s get rid of the state entirely, and all will be well. Given the present primitive degree of evolution of our species, a new state will pop up wherever an existing one is overthrown. The key to peace and prosperity is not anything so simple as abolition of the state, but to convince enough people, thoroughly enough, of the advantages of long-term cooperation. Good institutions will follow.

David Theroux’s latest on Secular Theocracy

Duck Dynasty and the Secular Theocracy.”

For more on David’s argument about secular theocracy, start here.