Economics & Finance

Why the Democrats Raked It In

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On this Reason post [h/t Instapundit] about possible serious political warping of the “stimulus”spending, commenter nate made an interesting claim:

I work in a federal agency that had a good portion of stimulus cash and was part of the team that picked projects to get funds. We really didn’t look at unemployment in the area. Our main criterion was whether the project had been designed and engineered to a point that we could get construction going pretty quickly. Once we set out our list, we sent it up to OMB. They knocked some stuff out and changed it up some, but for the most part the final list looked like what we sent them. I doubt politics had too much to do with the selection of projects.

I actually think this is very likely. As much as I would gain emotional satisfaction from the idea that perfidious Democrats systematically channeled hundreds of billions of dollars to their cronies in old style big city machine corruption writ large…

… I just don’t think they’re that competent.

Instead, I think the asymmetry could largely result from the type of projects that nate and his colleagues were primed to fund. They didn’t fund projects because the projects fulfilled an important need. Neither did they fund projects that local areas could not afford and therefore had never started. Instead, they funded projects based solely on how far along the projects already were in their development.

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Bubble-icious — American History and Political Subsidies

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As someone who’s written several times (here and here) about the course of modern health care (its inherent complexity and cost), I’ve been watching the latest moves in US health care funding with a great deal of interest.

From the introduction of antibiotics to the breakthroughs in transplant surgery, medicine in the 20th century was in a position to provide dramatic improvements in health care (both quality of life and length of life) at relatively modest cost. Many consider it a golden age in medicine. My personal belief is that medical care is about to hit another burst of creativity and success (but at much higher cost-to-benefit) as non-invasive imaging, micro-surgery, diagnostic testing, and DNA-propelled pharmaceutical customizations kick in. I may be wrong, but I think my beliefs are a reasonable extrapolation of the trends in medical care since the end of the 1970s “silver bullet” period of medicine.

So what do my guesses about modern medicine mean in a new era of greater tax subsidies for US health care? An era which, by necessity, must politicize health care further. It got me to thinking about the hidden subsidies during earlier periods of American history, powered by the domestic political systems of the time, and driven by citizen/voter appetites. And it got me thinking about the law of unintended consequences.

After a few minutes scribbling on the back of an envelope, I came up with the following:

US Bubbles Over Four Centuries

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Quote of the Day

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The President has just given away the contents of half the nation’s wallets by arranging things so that the survival of the other half depend on getting it.

–Richard Fernandez

Powering Down

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The California Water Resources Board has ruled that 19 natural gas power plants, located in coastal areas, are in violation of the Clean Water Act for using a technique called “once-through cooling.” According to this article, it appears that this ruling will result in the shutdown of most of these plants.

(Once-through cooling, which has been used since the days of James Watt, means simply that water is used to condense steam and is thence returned to the source from whence it came. The cooling water is not polluted, but is warmed up a bit. IIRC, the returned cooling water is somewhere in the range of 85-90 degrees F, i.e., less than the temperature of the typical hot tub.)

The state of California has taken other actions which make it difficult for the capacity of these 19 plants to be replaced. California has a moratorium on new nuclear power plants and coal plants. New natural gas plants, which are less polluting than coal plants (and emit less CO2, for those who care about this issue) are also banned in much of California.

A project to build large-scale solar plants in the Mojave Desert is encountering opposition from environmentalists who object to the construction of transmission lines to carry the power to San Diego. And California Senator Dianne Feinstein is apparently also opposed to this solar project on grounds that it threatens a species of turtle. There is also environmentalist objection to wind turbines because of the danger they pose to birds and bats.

If you live in California, expect your electricity bills to rise significantly. If you run an energy-intensive business located in that state, you probably need to think about alternative locations.

Although unfortunately, these California polities are merely the currently-most-extreme version of the policies that the Democratic Party, in its war on energy, wants to impose on the country as a whole.

The only possibility we as a nation have to overcome our very serious debt problems and to restore anything like full employment is to grow our way out of the problem. The Democrats’ war on energy is one of the primary threats to such growth.

Worthwhile Reading and Viewing

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(Every week or so, I post a collection of interesting links at Photon Courier under the above heading. There’s so much interesting stuff this week I thought I’d post it here as well)

Erin O’Connor on California’s universities and their role in the state’s economic debacle.

Climategate: it was an academic disaster waiting to happen. Interesting and contrarian thoughts about the role of peer review.

Richard Fernandez wonders if World War III has already started…without many people even noticing. (via Isegoria)

Solar arbitrage in Germany. (via Maggie’s Farm) It’s hard to believe he will really get away with this, but still pretty funny. See also this related post from Evolving Excellence: Better Call the Waaaahmulance!

AnoukAnge writes about ambition. (One of the great literary works that deals with this subject is Goethe’s Faust…memo to self: a blog post on the treatment of ambition within Faust could be very interesting)

AnoukAnge also has a nice photographic essay on color…including the psychological connotations and cultural-symbolic meanings of various colors.

Speaking of color, this year’s winning images have been chosen for GE’s In Cell Analyzer photography contest. The In Cell system used used by scientists for better understanding disease processes and for drug development; as it happens, it also produces images which are appealing and even beautiful, in a psychedelic sort of way. There’s a nice video, with music, at the bottom of GE’s post about the contest.

One more photography-related link: British industry in the 1950s and 1960s. (via Brian Gongol)