India

Why Don’t We Just Cut China a Check?

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The really stupid thing about Obama’s carbon cap-and-trade system [h/t Instapundit] is that it will simply relocate more manufacturing to countries that don’t give a damn about global warming.

The growing economies of China, India, and other parts of the world still have people living the lives of preindustrial subsistence farmers.  Right now, today, they have people in dire need of food, clothing, shelter, medical care, education, transportation and every other facet of modern life we take for granted. They don’t give a crap about hypothetical dangers that will hypothetically manifest a century from now.

Such areas will use dense, rich, reliable sources of energy like coal and nuclear to power their factories while we try to smelt iron with windmills. We will be poor and eventually powerless in the face of such competition. Worse, if global warming is a problem, it will happen anyway. Our sacrifices will simply mean we have fewer resources to deal with the problems posed by global warming. 

Obama plans to shut down our carbon-emitting power sources today, decades before we bring their hypothetical replacements online. If the technology doesn’t work as predicted, where will we be then?

Obama’s plan will be a massive wealth transfer from America to China and India. We will simply be handing them our current and future economic productivity on a platter. 

Mumbai Musings

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Like most people, I was shocked and saddened to hear of the terrorist attacks in Mumbai, India last week. Close to 200 people dead so far, with untold numbers more injured. It is a tragedy of terrible scope.

Speaking as someone who works with violent crime survivors, I can attest that there is a hidden cost that very few of us will ever see. Thousands upon thousands of people were involved with the victims, from family members and close friends to coworkers and casual acquaintances. Most of those people will find their lives have been changed, and rarely for the better.

Although hardly an expert on terrorism, I have been paying attention to the issue over the years. I thought I’d share a few thoughts.

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Official Stupidity

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Indian pols revert to Third World type:

NEW YORK (MarketWatch) — India is reportedly considering a ban on futures trading in food commodities, as the government struggles to curb soaring inflation and the rising cost of food has become a major international concern.
 
India’s finance minister Palaniappan Chidambaram said Monday that he was considering a blanket ban on trading in food futures, according to a report in The Financial Times.
 
Chidambaram said that governments across Asia share his worries over speculation in the commodities markets, the FT reported.
 
India is “facing a very grave crisis on the food front,” the minister said on the sidelines of the Asian Development Bank’s annual meeting in Madrid, according to the FT.
 
India has already banned futures trading in rice and wheat. The latest remarks from India’s finance minister come as his government confronts growing pressure at home to curb rising inflation.
 
On Friday, official data showed that India’s inflation hit a 42-month high of 7.57% in the week ending April 19.
 
“It’s indicative of the fact that there’s a real issue here and governments are scrambling to find some kind of solution,” said Cameron Brandt, global markets analyst at EPFR Global, about India’s idea to ban trading in food futures.
 
“I don’t think it’s a great idea especially given that their food futures market is fairly modest,” Brandt said. “If you take that away, you lose pretty important market signals. One thing the food futures market is telling us is plant more food.”
 
[…]

There’s not much to say about this except that India still has a ways to go to become a first-rate country.

Also, the ignorance about basic economics of many of the commenters on economics and finance websites never ceases to surprise me.

Interesting Automotive News

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A little less than a year ago, I wrote a post titled Any Color as Long as it’s White, about the project at Tata Motors (India) to create the cheapest car ever built–cheaper even, in inflation-adjusted terms, than the Ford Model T. Here’s the car. See commentary from India, here and here.

And in China, a company called BYD Auto is launching a plug-in hybrid which is supposed to be available for sale (in China) this summer. Interestingly, the parent company of BYD is a battery manufacturer.

These cars won’t be available in the U.S. anytime soon, and will likely never be available in the U.S. in their present forms. There are issues of regulatory compliance, of consumer expectations, and of the need for a sales and support structure. But any U.S. auto executives who think that these announcements aren’t very relevant to them need to do some remedial reading. In their book The Innovator’s Solution, Clayton Christensen and Michael Raynor point out that disruptive innovations–those destined to change the structure of an industry–tend to attack from below. They usually first appear in a form that is in some ways inferior to the existing dominant technologies, and hence are unlikely to get the attention or respect of industry incumbents. I think it is quite likely that innovations developed by companies such as Tata and BYD–whether product design innovations or manufacturing process innovations–will in the not-to-distant future have a significant impact on the U.S. auto industry.