Saturday, February 27, 2016

Remember peak oil?

Apparently no one else does either. Welcome to everlasting oil (FP) with oil so cheap, pirates don't even want it anymore (qz).

Monday, February 22, 2016

The biggest threats to Western Civilization don't exist outside its borders...

Juxtaposition - "Why the West is Irresistible" (NationalPost):

It’s easy to laugh at the news that the Islamic State of Iraq & the Levant (ISIL) is so short of money that it has stopped giving its fighters free energy drinks and Snickers bars. Har, har, har. But it’s also profoundly important. [...]

This bitter, theologically obtuse concession to fiscal reality underlines the same insurmountable contradiction within Islamism generally as the free energy drinks, Snickers bars and jihadi Twitter accounts. These radical movements hate the West, not because of our policies or even our consumerism, but because our vertiginously dynamic creativity and cultural turmoil, the wellspring of our prosperity and power, is irresistible psychologically and practically.
Read the whole thing. On the other hand, "Ivy League crybullies vs. survivor of a Soviet labor camp; guess who needs ’emotional support’?" (WashingtonPost). As Reason points out, nevermind the tuition that costs $60k a year, "it's exhausting work, being offended all the time."

Wednesday, February 17, 2016

Chinese textile firm opens up in South Carolina to reduce costs

Comparative advantage can shift both ways also proving some people will never be happy (WSJ):

But Keer executives said they realized that the gap in wages between China and the U.S. was narrowing, plus South Carolina had cheaper land, energy and raw cotton than China. Keer opened its first plant in South Carolina last year and now employs about 180 people, said Lilian Chang, a sales executive at the South Carolina plant. Over time, it wants to add four more factories and build up its workforce to 500.

“What we lack (in South Carolina) is professional technicians” to run the company’s automated spinning machinery, Ms. Chang said. One reason the U.S. textile industry had such big layoffs, economists say, is that the industry became so automated that it needed far fewer workers to run computerized assembly lines.

For some in the Palmetto state, the investment by the state’s one-time archrival is worrying, despite the jobs the companies bring. The Chinese investment “is a sign of weakness,” said Jim Jamborg, a Little River, S.C., postal worker. “The Chinese are coming in and American businesses are moving out.”

Bee-mageddon averted? U.S. honeybee colonies hit a 20-year high

Bee colonies are no longer on the decline, and according to the Washington Post's Wonkblog, that's (un)surprisingly thanks to free markets:

Beekeepers have been doing this sort of thing since the advent of commercial beekeeping. When CCD came along, it roughly doubled the usual annual rate of bee die-offs. But this doesn't mean that bees are going extinct, just that beekeepers need to work a little harder to keep production up.

The price of some of that extra work will get passed on to the consumer. The average retail price of honey has roughly doubled since 2006, for instance. And Kim Kaplan, a researcher with the USDA, points out that pollination fees -- the amount beekeepers charge to cart their bees around to farms and pollinate fruit and nut trees -- has approximately doubled over the same period.

"It's not the honey bees that are in danger of going extinct," Kaplan wrote in an email, "it is the beekeepers providing pollination services because of the growing economic and management pressures. The alternative is that pollination contracts per colony have to continue to climb to make it economically sustainable for beekeepers to stay in business and provide pollination to the country’s fruit, vegetable, nut and berry crops." We have also been importing more honey from overseas lately.

But rising prices for fruit and nuts hardly constitute the "beepocalypse" that we've all been worried about. Tucker and Thurman, the economists, call this a victory for the free market: "Not only was there not a failure of bee-related markets," they conclude in their paper, "but they adapted quickly and effectively to the changes induced by the appearance of Colony Collapse Disorder."

Free markets have also resulted in more and better services to make innovation easier. One of the top funded indiegogo campaigns ever? "Flow Hive: Honey on Tap Directly From Your Beehive"

Monday, February 15, 2016

"Why you can't afford a home"

I suspect that this applies as much for Canada as it does for the US (New Geography):

The connection between growing inequality and rising property prices is fairly direct. Thomas Piketty, the French economist, recently described the extent to which inequality in 20 nations has ramped up in recent decades, erasing the hard-earned progress of previous years in the earlier part of the 20th century. After examining Piketty’s groundbreaking research, Matthew Rognlie of MIT concluded (PDF) that much of the observed inequality is from redistribution of housing wealth away from the middle class.

Rognlie concluded that much of this was due to land regulation, and suggested the need to expand the housing supply and reexamine the land-use regulation that he associates with the loss of middle-class wealth. Yet in much of the country, housing has become so expensive as to cap upward mobility, forcing many people to give up on buying a house and driving many—particularly young families—to leave high-priced coastal regions for less expensive, usually less regulated markets in the country’s interior.
Unfortunately, I think statists have been far better at communicating their message and arguing for policies that are just making things worse as millenials apparently have a higher opinion of socialism than capitalism (Washington Post). I think this image is worth distributing:

What Russia really fears...

Frackers (Manhattan Institute). Which explains some of their "philanthropy" in the US (Daily Caller).

Sunday, February 07, 2016

When "investments" really aren't

China's ghost cities (Wired): a reminder that markets are far more efficient at capital allocation than governments.

Thursday, February 04, 2016

Why most Germans rent

Surprise, surprise, incentives matter. Fascinating look at housing policy - particularly in Germany and how it has shaped whether people buy or rent. Also a look at well meaning interventions elsewhere that have ultimately failed most the people they were designed to "help" (qz):

There’s another pretty simple reason Germans are less likely to own houses. The government doesn’t encourage it. Unlike high-homeownership countries like Spain, Ireland and the US, Germany doesn’t let homeowners deduct mortgage-interest payments from their taxes. (There’s more on the structure of European tax systems here.) Without that deduction, the benefits of owning and renting are more evenly balanced. “Both homeowners and landlords in Germany are barely subsidized,” wrote Voightländer in a paper on low homeownership rates in Germany. Those regulations, a solid supply of rental housing, and the fact that German property prices historically rise very slowly —that’s a whole other story—mean German rents don’t rise very fast. And because one of the main reasons to buy a home is to hedge against rising rents, the tendency of German rents to rise slowly results in fewer homebuyers and a lower homeownership rate.