The Washington Times has an interesting commentary by Richard W. Rahn, a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth. In addition to the fallacies pointed out in the article, I would like to bring up another, the idea that government mandates for alternative energy can create jobs.
Like anything else, the production of energy requires labor. Even the most automated production system was designed and built by human labor. So mandating a less efficient form of energy production, such as ethanol, wind turbines, or solar, seems to require more labor to produce the same amount of energy. And so it does. Thus, stopping with this simple analysis, we would conclude that less efficient energy production results in more jobs.
But energy is used to produce other things. Thus, the cost of producing those other things has now gone up. This cost can either be borne by the owner of the company in lower profits, by the employees in lower wages, or by the consumer in higher prices. Whoever bears the burden, and it is probably a combination of the three, the purchasing power of these people is reduced. They will buy less because they have less to spend. Because they are buying less, companies will produce less, and employ fewer people.
The net result is that there will be fewer jobs because of the less efficient energy production.
Adam Smith’s seminal work on Economics, An Inquiry into the Nature and Causes of the Wealth of Nations, is available online. Although economic theory has progressed since 1776, like Newtonian Mechanics, Smith’s theories are still applicable 99.9% of the time. For a more up-to-date economic treatise, try John Kenneth Galbraith’s The New Industrial State. For those of you who want something a little lighter, try Thomas Sowell’s Basic Economics.
An understand of economics is critical to one’s participation in politics today. When our leaders are proposing Universal Health Care, windfall profits taxes on oil companies, and taking so much of our money in taxes, it is a dereliction of duty for a voter not to have as much understanding of economics as he can.
“it is a dereliction of duty for a voter not to have as much understanding of economics as he can.”
I would disagree with you here. You didn’t go far enough. I would state that it is a dereliction of duty and a crime for a voter to have no understanding of the constitution, how the 3 branches of government work (as well as what they are), economics and have not done their homework as far as delving into a candidates whole past and record before casting a vote. An informed voter is a formidable force.
Most people don’t understand how their paycheck comes about. Work 8=8 hours pay. Just ain’t that simple.
Jack:
Well done ! We are in the shape we are in exactly because a large segment of our nations population as well as 80 % of elected officials have no clue when it comes economics.
So, lets just elect Thomas Sowell President as a beginning to solve this mess.
S”t”owell ?
The trouble is trying to the ignorant that they really are ignorant. Try explaining to someone from the dark side that the constitution really does not say this, or allow that, and you get branded a racist, a misogynist or mean spirited. The masses are a product of the public school system; one of the lefts sacred cows as it has become its chief recruiting tool.
Jacob, read this.
jacob,
Not a recruiting tool, but many of our schools have become liberal factories, where leftist lemmings try to turn out little clones of themselves. More so in higher education.
We do have a number of exceptional teachers that do not fit this broad generalization though.
I have a number of fingers, too, Dan. I think the numbers are of the same order of magnitude.
And you guys voted for him LOL!!!
http://www.cnn.com/2008/POLITICS/05/01/bush.poll/index.html
Jack, The key though is opposable thumbs..
What a wonderful thing to read on May Day. Unfortunately economic truths tend to contradict conventional “wisdom” which is why people think they can tax themselves into prosperity.
One unique way of reach government school students is a program called “South Park in the Classroom.” I forget which think tank does this, but they take episodes of South Park teaching free market economics, edit out “the bad stuff” and send them to government schools.
Along with Smith, Sowell and Charles Murray, I highly suggest adding South Park’s “Underpants Gnomes” episode to your literary and video library.
America got what they asked for, sad but true
http://www.cnn.com/2008/POLITICS/05/01/bush.poll/index.html