Obama’s carbon tax plans

Megan McArldle doubts the political viability of battling climate change with carbon taxation:

The Democrats right now are divided into deficit hawks, who think that the nearly $1 trillion deficit headed down the pike means they can’t afford any big programs, and the big spenders, who say to hell with the deficit, let’s spend as much as we can to make it look like we’re really doing something.  More on this later.  But one wrinkle that hadn’t seemed as important as it now does is that the Democrats do not have the luxury of proposing unpassable legislation in order to look like they’re doing something.  They can’t make good on Obama’s electoral promises about global warming by putting up a program the Republicans hate enough to take down, because there aren’t enough Republicans to credibly blame for the bill’s destruction.  So they either have to actually pass a carbon bill that will be massively unpopular when it raises energy prices, or explain why Obama didn’t really mean it.

If the Democrats are smart, they’ll pass a carbon bill that will only gradually raise energy prices, and that won’t really kick in in a serious way for another 5-7 years. Modest rises in energy prices in the short term will not prove to be “massively unpopular” and more substantive increases — while no doubt not exactly something the public will love — will be tolerated if the economy as a whole is once again growing briskly, and median income is once again increasing, and people see real progress in developing the kind of infrastructure that helps them deal with said higher energy prices.

Examining the exurbs

Matt Yglesias gets into a discussion on the geographical composition of the foreclosure crisis in his analysis of the situation with Blue Dog Democrats, and their alleged caving in to financial interests intent on sticking it to beleagured mortgage payers:

My look at the data thus far has been very cursory, but my preliminary conclusion would be that the hardest-hit areas are the high-growth fringes of vibrant metro areas. In Virginia, for example, Arlington County right next door to DC has a higher foreclosure rate than South Dakota. It’s lower, however, than the rate in Fairfax County — the further-out part of suburban Virginia. Fairfax’s foreclosure rate, in turn, is lower than the rates in Loudon County and Prince William County — the dread exurbs. The ring of counties around those two counties — rural areas — see the rate dropping again.

One of the thread commenters mentions his skepticism that higher gas prices are adding much fuel to the fire for hard-pressed exurban home owners, opining that such people stand to “save” a couple of hundred thousand bucks by choosing to live far out from the city center (a “savings” that, according to his logic, apparently far outweighs the recent spike in gasoline prices).

I’m not so sure about this line of reasoning. It seems to me plenty of folks in exurban  areas really are facing major financial stresses these days, and higher prices at the gas station don’t help matters. In the first place, is the whole concept of buying in the exurbs really a question of “saving” $200k? That makes it sound like the average exurbanite has the option of buying a $500k house close to the city but instead opts to “save” a couple of a hundred thousand by tolerating a sixty mile commute.

I think the reality is that, in most exurbs, many of the people who have settled there have done so because that’s all they can afford. This is in contrast to city centers and close-in suburbs, which are often populated either by wealthier folks or people, who, for whatever reason, (too poor, or else young urban hipsters who haven’t started families yet) have no burning need (or ability) to be homeowners. In other words, exurbs are peopled by folks who very often are strapped for cash. Just the kind of people who got into an exotic mortgage a couple of years ago — and bought at the height of the market. There’s a heavy preponderance of residents with children, as well, and kids, as we all know, aren’t exactly cheap.

Anyway, it doesn’t surprise me that foreclosures are higher in the exurbs than either in more central location or in truly rural areas. The exurbs are where the American dream — in all its glorious excess — thrives in good times, and crashes and burns when the time comes to pay the piper.

Monday Putin blogging

Ross Douthat ponders the legacy of Vladimir Putin:

I think there’s little question that Putin has been one of the most successful world leaders of the new century, and I’ve always had the impression that this success is related to his being smarter, in some meaningful way, than most of his rivals and partners on the world stage… It will be very interesting to watch what he does after 2008 – both how he continues to exercise power in Russia (as he assuredly will), and what his de facto political dominance will mean for the leaders who succeed him. He will only be fifty-six when his term ends – younger than any of the front-runners for the GOP nomination, it’s worth noting – which means that the Putin era, in one fashion or another, probably still has decades left to run.

I guess time will tell. I personally suspect there’s another shoe that may still drop, and it’s called “the price of oil.”

It’s hard to imagine Putin accomplishing 10% of what he’s accomplished in recent years without all those fat petrochecks. I don’t buy the hype about oil remaining dear ad infinitum. Oh sure, in the long run we’re no doubt running out of the stuff, and over the long term it will likely get more expensive. The short and medium terms, however, are a different story.

Price spikes in the past have prompted conservation efforts. They’re doing so again. When you follow this process with the inevitable recession (we still haven’t managed to repeal the business cycle, by the bye), the price of oil drops. Usually quite substantially. And so, too, will Russian economic prospects, and the received wisdom about how great a leader Vladimir Putin has been.

The ever littler big three

Matt Zeitlin goes on a rant about the awfulness of Detroit’s products:

American cars, for the most part, are an inferior product.  They also have the potential to destroy the world.  At the low end, their Japanese (and ever Korean) competitors are cheaper, better designed, more fuel efficient and have better technology.  While the Ford Focus is one of the better low end American efforts, it is only popular overseas and is still beaten out by a comparable Civic at home.  Comparable Ford and Chevy’s to Corey Spaley’s favorite, the Honda Accord simply can’t compete with it’s higher gas mileage and superior design.  When American companies try to make more expensive, performence cars — like the Mustang GT, they are inefficient, overpowered brutes.  The GT has a lame 65 hp/liter, which pales in comparison to similarly powered Japanese cars, which manage to get around 100 hp/liter (Subaru WRX STI and Mitsu Evo).  Though the GT has an aluminum engine block, American companies have been late to using anything besides heavy cast iron in engine blocks.  Not to mention the poor gas mileage, 15/23 highway city.

Okay, Zeitlin, I’ll see your rant and raise you one: nobody ’round these parts under the age of 50 seems to even consider buying American (save in the USV category). I actually kinda like the new high end caddies, but not much else.

I’ve long been of the opinion that plain old marketing and branding bears a lot of the blame for Detroit’s decline. Look at one pretty successful Japanese automaker, Honda. They’ve got, like, four or five principal models that account for the bulk of their sales. Compare that to General Motors, which has, like, 30 or 40 to choose from. I mean, hello!?! Can you say “dillution of brand”? Has it really occurred to nobody in Detroit that a strategy that made sense in 1957 doesn’t work anymore? They’ve literally had decades to study their own decline and formulate strategies to reverse it. If I were dictator of GM I’d rename the company “Chevrolet”, I’d get rid of most of their divisions, and I’d cull the models down to a number comparable to what Toyota or Honda have to offer.

Modern, busy consumers simply can’t wrap their very harried brains around the dozens of possible models that GM can sell them. Thing is, it’s a total waste anyway, because anybody with an IQ over 70 can plainly see that the “Pontiac” and “Buick” and “Chevrolet” (or Pymouth, Dodge and Chrysler, etc) versions are pretty much the same product. Their lack of respect for the intelligence of the car buying public is simply astonishing. If ever there existed a firm that deserved to go out of business (and doesn’t deserve a dime of public money should the need arise) it’s General Motors, closely followed by Ford and Chrysler.

Deep thoughts

Those environmentally-friendly light bulbs are cool, I guess, and they’ll save us all money in the long run. But I’ve noticed sometimes they simply don’t fit your average lamp. Which means I’ll have to continue to buy the old fashioned variety light bulb. Ain’t no way I’m getting read of all my light fixtures just to save a planet.

The biggest reason Iowa shouldn’t be first

Thus saith John Stossel:

Clinton, Romney, Barack Obama and John Edwards not only believe ethanol is the elixir that will give us cheap energy, end our dependence on Middle East oil sheiks, and reverse global warming, they also want you and me — as taxpayers — to subsidize it.

When everyone in politics jumps on a bandwagon like ethanol, I start to wonder if there’s something wrong with it. And there is…

The claim that using ethanol will save energy is another myth. Studies show that the amount of energy ethanol produces and the amount needed to make it are roughly the same. “It takes a lot of fossil fuels to make the fertilizer, to run the tractor, to build the silo, to get that corn to a processing plant, to run the processing plant,” Taylor says.

And because ethanol degrades, it can’t be moved in pipelines the way that gasoline is. So many more big, polluting trucks will be needed to haul it.