David Foster

Energy, Productivity, and the Middle Class

by

It being Labor Day, there will doubtless be many political speeches and newspaper articles touching on the rise of the American middle class and crediting this rise to labor unions and perhaps also to FDR’s New Deal.

I don’t mind giving some of the credit to unions. But the primary driver of middle class affluence has been the availability of plentiful and low-cost energy…especially in the form of electricity…coupled with a whole array of productivity-increasing tools and methods, ranging from the horse-drawn harvester to the assembly line to the automated check sorting machine.

The middle class affluence enabled by these factors is gravely threatened is gravely threatened by the Democratic-“progressive” hostility toward energy production and distribution in all practical forms, and by the endless set of productivity-sapping policies advocated by the same group of people.

Over the long term, or even the medium term, a nation cannot consume more than it produces. It doesn’t matter how aggressive the unions are, or what tax policies are in place, or how much Oprah-like sympathy for the unfortunate is exuded by politicians–if you harm the productive power of a nation, its average standard of living is going to go down.

Low-energy, low-productivity societies can support a very wealthy elite, and have historically often done so, but they cannot support a broadly affluent middle class.

Observation

by

What I’ve heard of the Democratic convention reminds me of some lines from Gilbert & Sullivan’s The Mikado:

Sent to hear sermons by mystical Germans
Who preach from ten till four

Unfortunately, the Republican convention will probably come across the same way.

Shooting Down Missile Defense

by

In late June, the U.S. Missile Defense agency conducted a successful test of THAAD, the Terminal High Area Defense system. THAAD is intended to provide the upper level of a multilayer defensive shield, with a lower-level defense provided by Patriot or a similar system. It is particularly intended as a defense against short- and intermediate-range ballistic missiles, although it also offers some capability against intercontinental missiles.

I don’t think Barack Obama would be much of a THAAD supporter. In this speech, he says he would cut investments in “unproven missile defense systems” and indeed seems pretty hostile to defense technology programs in general.

I guess THAAD counts as an “unproven technology,” given that it has not yet been combat-tested or even deployed. The radar-and-communications network that protected Britain from air attack during WWII was also an “unproven technology” when it was deployed: it is very fortunate that Neville Chamberlain, rather than Barack Obama, was Prime Minister of Britain at the time.

THAAD is a hit-to-kill system: it destroys its targets via force of impact, rather than with an explosive charge. This is basically “hitting a bullet with a bullet,” an idea that opponents of missile defense have long mocked.

An aerodynamicist once supposedly “proved” that it was impossible for bumblebees to fly; however, the bumblebee continues flying happily, unaware of the impossibility of its behavior. Similarly, THAAD “hits a bullet with a bullet,” not deterred by the supposed impossibility of this action.

Very clearly, “progressives”–and even many mainstream liberals–have long been hostile to the very idea of missile defense. They were hostile to it when the principal threat was from the Soviet Union, and they are hostile to it when the principal threat is from rogue states, terrorists, and a brutish theocracy. They were hostile to it when the latest thing in computer technology was the IBM System/370, and they are hostile to it several generations of technology later. It seems to really bother them that any system should be so presumptuous as to interpose itself between Americans–and citizens of allied nations–and those who would launch missiles at them.

Why?

Wall Street, Pro Wrestling, and Seventh Grade

by

A couple of years ago, Sallie Krawcheck, then CFO of Citigroup (now Chairman & CEO of Citi Global Wealth Management) was asked how being a woman had affected her career. Her response:

I think it’s an advantage. I grew up in Charleston, a very genteel, very Southern city, a gorgeous city. I will say there’s something about going to an all-girls school in Charleston that’s tougher than Wall Street. You don’t know what it’s like. I had the glasses, the braces, the corrective shoes. I was half-Jewish, half-WASPy. I couldn’t have been further outcast. There was nothing they could do to me at Salomon Brothers in the ’80s that was worse than the seventh grade.

The current issue of Fortune (8/18) has a profile of Meredith Whitney, who was one of the first securities analysts to recognize the seriousness of the subprime/CDO situation. Ms Whitney is married to a professional wrestler. From the article:

Another eye opener for Whitney has been how gracious most wrestlers are–at least when the cameras aren’t rolling–in comparison with the viper-pit culture on Wall Street. It sounds absurd–the world of high finance being less collegial than an industry in which employees belt each other in the face.

If we put these two assessments together, we get:

Pro Wrestling

is nicer than

Wall Street

which is nicer than

Seventh Grade

Suppressing Knowledge About American Oil Resources

by

An editorial in Investor’s Business Daily (8/11) contains the following passage:

In 2005, (Barack Obama) voted to kill legislation that would have measured our offshore (oil and gas) reserves.

That effort failed and a preliminary inventory report was produced in February 2006.

But those estimates of what lay beneath the 1.76 billion-acre continental shelf were based on old data obtained from surveys using old exploratory technology.

The Interior Department report stated: “Resource estimates are highly dependent on the current knowledge base, which has not been updated in 20 to 40 years for areas under congressional moratorium . . .”

The reason is that while requiring regular inventory assessments Congress provides no funding to conduct new surveys.

Now Obama is sponsoring S.115, which he calls the “Oil SENSE Act,” which would repeal the 2005 Energy Policy Act’s authorization of these inventories.

His bill would prohibit the expanded use of 3-D seismic techniques to search for and measure undersea oil deposits.

This seemed so unbelievable, even give what I knew about Obama’s ideas on energy, that I had to check for myself to see if it was true.

Read more