Volume 12, Issue 8: February 22, 2010
- Sacrificing Americas Energy Needs to Environmentalisms Sacred Symbol
- Putting the U.S. Debt Problem in Perspective
- Fear, Ignorance, and Federal Bailouts
- Templeton Essay Contest to Award up to $10,000 for College Teachers & up to $2,500 for College Students
- This Week in The Beacon
1) Sacrificing Americas Energy Needs to Environmentalisms Sacred Symbol
President Obama recently announced concessions to improve the prospects for an energy bill later this year, but at least one gesture was conspicuously absent from his remarks: he signaled no willingness to open up the Arctic National Wildlife Refuge (ANWR) to oil and gas development. Obamas stance is not a product of economic reasoning. At current prices, the feds would collect roughly $250 billion after the oil companies and the state of Alaska took their cuts from the sale of the estimated 10.4 billion barrels of oil underneath ANWR.
Nor is the White Houses hands off ANWR policy the result of a careful determination that energy development would cause significant environmental harm to the refuge. Oil extraction from Alaskas North Slope did not, for example, decrease the regions caribou population; on the contrary, it boosted caribou numbers, according to a 2003 study by the National Academy of Sciences. Instead, the real reason ANWR is off limits is that the powerful environmental lobby has cleverly marketed the reserve as the last pristine wilderness untouched by human contactan ecological Garden of Edenaccording to Independent Institute Senior Fellow Robert H. Nelson.
Environmental groups have raised many millions of dollars, and enlisted thousands of supporters, by appealing to the powerful imagery of protecting ANWR and other remaining parts of original nature, writes Nelson, whose new book interprets environmentalism as a secular religion. Many environmentalists may in fact believe their own words. The price for the rest of us, however, is too large. America can no longer afford the enormous public expenses required to sustain the cherished illusions of the environmental faithful.
A Missed Opportunity on Energy, by Robert H. Nelson (The Baltimore Sun, 2/17/10)
To Drill or Not to Drill: Let the Environmentalists Decide, by Dwight R. Lee (The Independent Review, Fall 2001)
2) Putting the U.S. Debt Problem in Perspective
Due to massive increases in federal spending, the economic future of the United States looks gloomy. The interest cost to carry the U.S. public debt was $383 billion in Fiscal Year 2009 and is estimated to exceed $700 billion by 2019. Taxes can be increased only so much before taxpayers rebel by working less or voting incumbent politicians out of office. Another alternativemonetary expansionalso has limited potential for paying down the debt: it leads to rising prices and, eventually, rising interest rates, which would make it harder to sell U.S. debt abroad.
The United States is in bad shape, but not as bad as, say, Greece or Japan, where government debt is 200 percent of GDP and rising. But none of this should make the U.S. government bondholders at all smug since defaults on sovereign debt abroad could start a contagion that could swamp all boats, writes Dominick T. Armentano, a research fellow at Independent Institute.
It would be myopic, however, to let reasonable worries about U.S. debt levels degenerate into doomsaying, according to Independent Institute Senior Fellow Robert Higgs. Even during the hyperinflations of Weimar Germany and contemporary Zimbabwe most people found a way to survive, life went on, and economic activity eventually resumed after the adoption of a reformed or foreign medium of exchange, writes Higgs. If people could keep society running in the aftermath of the Black Death, they could keep it running after the U.S. government defaulted on its debt.
After Doomsday, What? by Robert Higgs (The Washington Times, 2/15/10)
Video: Robert Higgs on the Second Lost Decade (Freedom Watch w/Judge Napolitano, FoxNews.com, 1/13/10)
3) Fear, Ignorance, and Federal Bailouts
In his new memoir On the Brink: Inside the Race to Stop the Collapse of the Global Financial System, former Treasury Secretary Henry Paulson discloses a key motive for the panicky spasm of bailouts for banks and automobile companies and othersfear, specifically the fear of not knowing how the alternative path of bankruptcies, liquidations and mergers would handle large private-sector insolvencies.
The fear was so overpowering that Paulson, his colleagues and Wall Street decided to put unconditional faith in the very institution, the federal government, that the author tells us was responsible for the conditions under which the housing bubble occurred: easy money, political incentives for homeownership and regulatory incompetence, writes Independent Institute Senior Fellow Alvaro Vargas Llosa.
The fear that gave birth to the bailouts came from ignorance, but it was ignorance that Paulson helped perpetuate. Paulson himself admits that in his conversations with Bush about the credit bubble he could see building up, the Treasury secretary himself never mentioned a housing crisis, continues Vargas Llosa. Why did fear and ignorance drive the bailouts? Perhaps because fear can be more powerful than the thirst for knowledge and the truth, concludes Vargas Llosa.
Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa
Lessons from the Poor: The Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa
The Che Guevara Myth and the Future of Liberty, by Alvaro Vargas Llosa
4) Templeton Essay Contest to Award up to $10,000 for College Teachers & up to $2,500 for College Students
The Independent Institute, in cooperation with the John M. Templeton Foundation, will award a total of $26,500 in prize money to winners of the 2010 Sir John M. Templeton Fellowships Essay Contest. The essay topic pertains to a quotation from the French political economist Frederic Bastiat:
Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone. Frederic Bastiat (18011850)
Assuming Bastiat is correct, what ideas or reforms could be developed to make people better aware that government wants to live at their expense?
The contest is open to college students (undergrads and grad students) and untenured college teachers from around the world. All entrants must be under 36 years old on the May 3, 2010, contest deadline. Here are the prize amounts:
Junior Faculty Division:
1st Prize: $10,000
2nd Prize: $7,500
3rd Prize: $4,000
1st Prize: $2,500
2nd Prize: $1,500
3rd Prize: $1,000
In addition to the prize money, winners will receive assistance in getting their papers published and two-year subscriptions to The Independent Review. Selected winners will be given assistance to present their paper at a professional meeting or other public forum. The winners will be announced in October.
More information about the 2010 Templeton Fellowships Essay Contest, including rules, bibliography, and winning essays from previous years
5) This Week in The Beacon
- All We Are Saying Is Give Charisma a Chance, by Mary Theroux (2/18/10)
- Amendment 28, by Randall Holcombe (2/17/10)
- One More Time: World War II Did Not Bring Us Out of the Depression, by Mary Theroux (2/16/10)