Free Markets, Free People

subsidy

Kinsley restores my belief in the irony impaired left

Michael Kinsley goes on a bit of a tear about states subsidizing the film industry in an LA Times piece.  Kinsley is just flat upset that states are giving way subsidies to “millionaires”.  Frankly, I don’t think government should be subsidizing any industry.  But back to Kinsley:

Government, in order to work, must be a monopoly. The appeal of the movie industry to beleaguered state treasurers, in addition to its glamour, is its mobility. There are no huge factories. Regardless of where the movie is supposedly set, it can be shot almost anywhere. And it will employ locals and spend money.

But mobility giveth and mobility taketh away. Pit the states against one another and the subsidies will inevitably become more generous and less effective at the same time.

The same logic applies when the competition is foreign. True, we might tire of having to watch film after film often implausibly set in Vancouver. But in any attempt to outbid Canada for the privilege of hosting a movie shoot, even a successful effort will be self-defeating.

"Governors and legislatures should call ‘cut!’ on cynical efforts to kill forward-looking incentive programs for film and TV production, in New Mexico and in all other states," Richardson says.

"Cynical" is an odd word to describe people (and there aren’t many) who want deeply indebted state governments to stop forgoing billions in tax revenue in the futile effort to entice the movie business to make its next western in Erie, Penn., or wherever.

Whatever indeed.  I don’t disagree.  For once I can give Kinsley kudos. 

Well, almost.   In the same article he says, talking about Bill Richardson, former governor of New Mexico (and the “Richardson” quoted above):

Richardson might well be a candidate for one of the "respected elder statesman" seats that come open every generation (sort of an American version of the British House of Lords, only chosen by the media instead of the government), bringing with them memberships of prestigious commissions, offers of ambassadorships, opportunities to express concern on "Charlie Rose" or the PBS "NewsHour" shows (if those institutions manage to survive the current Republican onslaught) and so on.

Yes, you caught it.  He’s talking about the subsidy the Federal government gives the Corporation for Public Broadcasting, a multi-million dollar corporation that helps fund PBS, another multi-million dollar tax subsidized entity.

Irony – still a mystery to much of the left.

Next Kinsley will be urging us to buy a book on how to save the trees.

~McQ

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Gore: corn-ethanol subsidy “not a good policy”

Holy moly, perhaps the oceans will rise and hell will freeze over – but it won’t be because of “climate change” or whatever the warmists are calling it this week.  Nope, Al Gore has found a government program he doesn’t like.  Yup, that’s right.  And not only that – and this is the hell freezing over part of it – it’s a “green” government program.

Yes, friends, Al Gore says that the US government’s subsidies for corn ethanol is “not good policy”.

"It is not a good policy to have these massive subsidies for (U.S.) first generation ethanol," said Gore, speaking at a green energy business conference in Athens sponsored by Marfin Popular Bank.

"First generation ethanol I think was a mistake. The energy conversion ratios are at best very small.

"It’s hard once such a programme is put in place to deal with the lobbies that keep it going."

Gadzooks.  A flip-flop.  He supported the program previously.  Oh, wait – he was just making a political statement then:

He explained his own support for the original programme on his presidential ambitions.

"One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president."

Dear farmers – vote for me and I’ll pay you outrageous subsidies to grow corn for ethanol.  "Certain fondness” my rear end.  Nothing has changed about Gore in the “I’ll say anything to get what I want” department, has it?  Flippin’ piece of crap – buying votes with your tax dollars.   Not that he’s the only one that does it, but for heaven sake, given the financial situation we’re in does he have to be so freakin’ glib about it?

Of course the reason corn-ethanol is a crappy idea is the subsidies are high and thus 40% of the corn grown is grown for ethanol.  That puts it in competition with corn for food.  Any guess what corn based food products have done since this nifty little program has been in place?

Yes, they’ve gone up quite a bit.  In this case, we call that the “law of unintended consequences” only as a rhetorical device.  The consequences may have been unintended but there were any number of economists saying “if you do that you’re going to drive up food prices”.  And, of course, the answer from our government experts was the “you don’t know what you’re talking about”. 

You know, the same experts that have told us that more of us can have more health care and it will cost less.

Anyway I thought you’d enjoy Gore’s little walk-back.  Don’t forget the same experts who brought you corn-based ethanol and higher food prices will be “debating” an energy bill at some point in the future.  I’d hide my wallet before then if I was you.

~McQ

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An AGW update

More alarmist myths bite the dust.  The claim that rain forests would be damaged by warming:

The threat to tropical rainforests from climate change may have been exaggerated by environmentalists, according to a new study. Researchers have shown that the world’s tropical forests thrived in the far distant past when temperatures were 3 to 5C warmer than today. They believe that a wetter, warmer future may actually boost plants and animals living the tropics.

And:

There are many climactic models today suggesting that … if the temperature increases in the tropics by a couple of degrees, most of the forest is going to be extinct. What we found was the opposite to what we were expecting: we didn’t find any extinction event [in plants] associated with the increase in temperature, we didn’t find that the precipitation decreased.

Or the claim that melting glaciers would threaten 2 billion people:

The spectre of imminent thirst and/or starvation for billions by 2035 from melting glaciers would appear to have been confirmed as the worst kind of alarmist scaremongering.

Sea level increases and more violent hurricanes?

First, there is still no proof the Earth is experiencing “dangerous” warming. Temperatures have levelled off since 1998. Many measuring locations are also located in unsuitable areas. Furthermore, the methodologies of averaging temperature are inconsistent and full of problems. This is why “Global Warming” was replaced as a slogan by “Climate Change” (nobody denies that climate changes), and more recently by “Climate Disruption” (which is impossible define or prove).

Second, the increased temperature is supposed to increase sea level mainly by melting the ice-caps, which is impossible. Thermal expansion of the oceans seems to be of little consequence at present because the satellite measurements show the oceans are cooling. Le Mesurier gilds his picture with a few asides on “extreme climatic events” in general and hurricanes in particular. Recent studies, however, show no increase in hurricane activity in the last 40 years.

But remember, the "science is settled".

Then there’s the drive for “green jobs” , “green technologies” and how that’s faring:

MORE than $1 billion of taxpayers’ money was wasted on subsidies for household solar roof panels that favoured the rich and did little to reduce Australia’s greenhouse gas emissions, a scathing review has found.

And:

Despite a $535 million loan guarantee from the federal government, Solyndra, a maker of solar panels in the southeast San Francisco Bay Area city of Fremont, will close one of its manufacturing plants, lay off 40 permanent and 150 contract workers, delay expansion plans of a new plant largely financed with the government-guaranteed loan and scale back production capacity more than 50 percent. Despite the hype and tax money, Solyndra seems unable to compete with Chinese manufacturers, whose prices are lower. This is the latest bad news for the company touted by Mr. Schwarzenegger and President Barack Obama as one of the green industry’s supposed shining lights.

Because, you know, government’s do this stuff so much better than private markets.

Thought you’d want to know.

~McQ

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Subsidize journalism with public funds? The bad idea that won’t go away

E

ver since the internet has thrown the private journalistic business model into disarray, the idea that perhaps public funding should be used to "save" private journalism has found purchase among some.

I, as you might guess, wouldn’t be one of the "some".

This time it is Lee Bollinger, Columbia University’s president, pushing the "public/private partnership" necessary to "save" journalism. He cites the BBC and NPR as examples of the sort of partnership he’s talking about. However, he wants to expand that, obviously, across the board. His rational for such an expansion is to claim we’re essentially doing that now anyway. His examples?

Meanwhile, the broadcast news industry was deliberately designed to have private owners operating within an elaborate system of public regulation, including requirements that stations cover public issues and expand the range of voices that could be heard. The Supreme Court unanimously upheld this system in the 1969 Red Lion decision as constitutional, even though it would have been entirely possible to limit government involvement simply to auctioning off the airwaves and letting the market dictate the news. In the 1960s, our network of public broadcasting was launched with direct public grants and a mission to produce high quality journalism free of government propaganda or censorship.

The institutions of the press we have inherited are the result of a mixed system of public and private cooperation. Trusting the market alone to provide all the news coverage we need would mean venturing into the unknown—a risky proposition with a vital public institution hanging in the balance.

You have to love this convoluted thinking evident here – letting the market alone provide all the news coverage is “unknown” and “risky”.  Getting government more deeply involved in regulating and subsidizing “journalism”, however, apparently isn’t.

What Bollinger really doesn’t want, much like the priests and monks of Gutenberg’s era, is to loose their monopoly on providing the news, just as the priests didn’t want to lose their monopoly on the possession of and therefore the interpretation of the bible.  Unfortunately the printing press changed that dynamic forever.

In this era the internet has forever destroyed the journalistic business model that provided monopoly power to “journalistic” institutions by removing the barriers to entry.  For minimal cost, anyone can publish on the internet.  And the proliferation  on the internet of sources and opinions on the news – some far better than the traditional outlets provided – have decimated their advertising revenue base as readers turn from high cost alternatives to low cost ones.

Welcome to creative destruction – a lynch pin of capitalism and the engine for advancements in technology and the delivery of goods and services.  Lower cost and better delivery will usually always win out over higher cost and poorer delivery.

If you want the news as quickly as you can get it (assuming the internet didn’t exist) and your choices were newspaper, network news and cable news, which would you most likely choose?

Obviously – and the ratings and subscription info seems to support this – you’d choose cable news.  Who wants stale stories delivered the next morning via newspaper, or appointment TV, where you have to take time to sit down and watch when they decide to broadcast to catch a half hour capsule of the news?

So this revolutionary change didn’t start with the internet.  The internet has simply expanded the choices and put the “traditional” outlets in even more disarray.

It isn’t the job of government or the taxpayer to subsidize the old and discredited business models to which the Lee Bollingers of this world cling.  What Bollinger should do, instead, is join the legions of owners, publishers and other experts working hard day and night to find a viable new business model that will preserve at least part of the “traditional media”. 

But all government subsidy will do is intrude in a dynamic changing market and distort it. And journalists of the traditional media will simply become one more rent seeker among many.  We don’t need to be moving toward more crony capitalism, we need to be moving away from it as quickly as possible.

Bollinger is sure that the system he envisions could easily be kept free of government interference and journalistic integrity would be maintained. He sites various examples that he’s sure proves his point.  But that’s not the point – at least not the one that is important (even if I don’t believe his point to be true in the long run).  What is important is the government should have no role whatsoever in subsidizing a “free press”.  When it does, no matter how benign the subsidy, the word “free” disappears from “free press”.

And intellectually that’s a non-negotiable point.

~McQ

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Saudis – “Subsidize Our Lifestyle!”

I‘m not sure the word “chutzpa” is appropriate when used in conjunction with Saudi Arabia, but it certainly best describes this particular idea:

Saudi Arabia is trying to enlist other oil-producing countries to support a provocative idea: if wealthy countries reduce their oil consumption to combat global warming, they should pay compensation to oil producers.

The oil-rich kingdom has pushed this position for years in earlier climate-treaty negotiations. While it has not succeeded, its efforts have sometimes delayed or disrupted discussions. The kingdom is once again gearing up to take a hard line on the issue at international negotiations scheduled for Copenhagen in December.

The chief Saudi negotiator, Mohammad al-Sabban, described the position as a “make or break” provision for the Saudis, as nations stake out their stance before the global climate summit scheduled for the end of the year.

“Assisting us as oil-exporting countries in achieving economic diversification is very crucial for us through foreign direct investments, technology transfer, insurance and funding,” Mr. Sabban said in an e-mail message.

Got that? The Saudis, who’ve been very happy over the past decades to be a part of a cartel that has cut off shipments of oil at times and limited oil production to drive up prices now are sniveling about the possibility that their revenue may be reduced as countries develop alternate energy sources? I’m laughing over here. Gee maybe if they hadn’t spent billions on spreading their radical brand of Islam they’d be in better financial shape.

What’s happened, however, is they have become accustomed to a particular style of life. They like having Filipinos and Indonesians waiting on them hand and foot and living in virtual slavery. They want to continue to spread their poisonous religion and have you pay for it. They enjoy the profligate life-style and by gosh, they expect you to continue to subsidize it.

“Make or break” provision? Be clear here – what they’re talking about is a subsidy paid out of taxes to pay for something they could have already done – “economic diversity”. The answer should be not only “no” but “hell no” followed by a good round of laughter at their expense.

Copenhagen is shaping up as a “loot the rich countries” forum and the number one target will be the US.  Unfortunately we are represented by a political leadership that may capitulate on a lot of things which may potentially cost us trillions in the upcoming decades and help kill any nascent recovery or long-term economic growth before it can develop.

~McQ

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