Saturday, April 10, 2010

Paul Krugman Gets It Wrong, Again

He's a respected economist and a Nobel Prize winner. However, Paul Krugman's recent NYT article entitled "Building a Green Economy" is so full of false assumptions and bad economic theory that it can't go uncorrected. How this guy could have any credibility amongst those of us who've balanced a checkbook is yet another of life's mysteries, a mystery that I'm happy to help dispel.

One could accurately dismiss the entire article based on one simple principle. Computer programmers are well aware of it: GIGO. Garbage in, garbage out. It means that no matter how well written any computer code may be, if the information fed into it is false or innacurate, the results will also be false and inaccurate.

He begins his article by saying that we should be listening to discredited climate scientists. That alone should raise red flags for anyone who has followed the news lately. He thinks that the revelation of the emails of the East Anglia Climate Research Unit should be dismissed and that we should go full throttle into creating a "green economy". This, my friends, is the garbage that he'd like to enter into our economic computer program.

Going into a little more depth on the CRU emails, computer programming is just one of the methods that these climate scientists used to manipulate data. Several people who've had access to the code ran other figures through it and, curiously enough, got a manufactured spike towards the end, resulting in Al Gore's now-infamous "hockey stick graph". In fact, one of the programmers originally questioned the lack of a spike and was told to "fix" the program to "hide the decline" in real-world temperature data. For a much more detailed look at ClimateGate, click on over to James Watts' site here.

Krugman then proceeds to lay out his case for a "green economy" by positing an economic law that is just plain wrong. He begins innocently enough with this statement:

If there’s a single central insight in economics, it’s this: There are mutual gains from transactions between consenting adults.

And goes to this absurd conclusion:

Free markets are “efficient” — which, in economics-speak as opposed to plain English, means that nobody can be made better off without making someone else worse off.

It's here that his knowledge of economics jumps the rails and veers wildly off the tracks of logic. He has just told us that free market economics is a zero sum game. The inaccuracy of this statement would normally result in peals of laughter, but since it comes from someone with the proper credentials, it's treated as gospel, never to be questioned. The word "efficient" means that things are done at the lowest cost, Mr. K. Please enter that into your journal for future reference and stop misrepresenting the language.

If this were true, we would never see an economy that grows. Or shrinks.

Fortunately, this absurd statement comes early in a ten-page article, so you can dismiss the rest of it without hesitation as he continues to ignore real-world experience and basic economic laws, which, sadly, is becoming this man's trademark.

We've been held hostage by radical environmentalism for so long that most of us have lost sight of reality. The screetching of the "Chicken Littles" has drowned out the voice of realitsts who understand that this Earth is in a constant state of change. Only recently has there been a push to make you feel guilty for innocently living your life, as if you were doing irreparabe harm to the planet by brushing your teeth.  Feel guilty enough and you can be gently manipulated to go along with the most absurd and illogical arguments conceivable. The image of a jack-booted thugocracy has been replaced with the image of a tie-dyed, Birkenstock-wearing bureaucrat.

The result is the same.

We haven't built a new nuclear power plant in thirty years, despite a stellar safety record and a rising population. We unecessarily restrict the development of our own natural resources such as oil and natural gas and instead of creating wealth for America, we drain our country of money. See our imbalance of trade as proof.

With all of the intellectual and technical resources that this great country has gathered, if there were ways to efficiently harness other forms of energy, we'd see this technology in the market. The fact that a "green economy" is being pushed at all (and is driven not by the market, but by massive wasteful government programs) should tell us that the technology just doesn't exist, yet. I have hope that one day we'll find a new source of energy that's free of pollution, or nearly so, but that day has yet to arrive. We'll get there, but the very act of restricting our economy in the false hope of "saving the planet" ensures our inability to reach that lofty goal. It will take research money to accomplish, and radical environmentalism virtually assures we'll never have enough, given that one of its basic tenets is that consumption is evil.
 
Until then, we must use what we have, and what we have isn't bad at all. Ask any physicist how much energy is contained in a gallon of crude oil and you'll hear that it's more than any other liquid source on Earth. Its' responsible use is beneficial in so many ways as to be beyond the scope of this post to catalog them all, much like the number of errors in Mr. Krugman's piece.
 
We should consider oil a gift from God, like fire. Use it for the benefit of mankind whenever possible and you can't go wrong.
 

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