The Cost of Mining Coal

Here’s an excellent article from the Washington Post about the rising cost of mining coal. This rising cost accounts for its declining use. The costs are rising largely because the coal that is the easiest to get was mined first, and now what is left is more difficult, and expensive, to obtain.
Cost of mining coal.

According to Marie Shmaruk, a director at Standard & Poor’s who analyzes metals and mining companies: “We have been relatively negative on central Appalachia for quite some time because it’s an expensive area to mine,” she said. “It’s been mined out and has thinning coal seams. We’ve been mining there forever.”

Shmaruk said that “central Appalachia is being squeezed the most. At natural gas prices today, the coal in a lot of those mines is not really competitive. And you’re seeing a lot of the utilities in that area have moved to natural gas.”

If there is a war on coal, the opponent is low cost natural gas, not environmentalists.

Personality and Political Orientation

An article in Salon summarizes the research from a new book, “Authoritarianism and Polarization in American Politics.”

Briefly, those who are disposed towards order and hierarchy tend to be Republicans, and those who tend to be adventurous and free thinkers tend to support Democrats.

Here’s the article. How your Personality Predicts Your Politics.

More on this later.

And the Rich grow Richer

Here’s a link to a fascinating story and analysis on the growth of wealth at the top. The number that jumped out for me was that in 1982, just over 15 percent of the 400 wealthiest Americans made their fortune in manufacturing. Today is is just a bit below 4 percent.

Why the Rich Grow Richer

The article analyzes the changes in the tax code, and other government policy since the late 1970’s, and how it has altered wealth creation in America.

Run Government Like a Business? Yeah, which business?

It is a favorite suggestion of Republicans: government should be run like a business. A recent example is from a Republican candidate for Governor named Phil Moffett. His commentary in the Herald-Leader may be here: [Note the Herald-Leader tends to hide their content after a few days]

Moffett notes a number of real problems, and I agree with him on some of the solutions. I agree that disruptive students should be removed from the classroom, and I support some forms of Charter Schools.

But the idea that government functions should be run like a business has always amused me. According to the Small Business Administration, one third of small business fail in the first two years, and over fifty percent fail within five years. That is a dismal success rate. The suggestion that government should be run like a business implies that businesses are uniformly efficient and well managed. But the numbers suggest otherwise. The concept also suggests that businesses are somehow unique in their ability to plan for the future, but if anything, the numbers say exactly the opposite.

I also wonder what business they are talking about. Certainly there are well run businesses out there. But we do not compare runners against Olympic athletes. Many businesses fail because of fraud. Remember Enron, or what about Bernard Madoff? Businesses men are no more or less noble than politicians.

You may have seen this headline: Plunging home sales could sink recovery.

Here’s the full story:

There is such a glut of excess housing that it is not only depressing home prices but it is causing potential buyers to be exceedingly cautious. They do not want to buy a house only to have the price go down. And the price could go down because there are so many excess houses out there.

And why are there so many houses available? Because of the business decisions of home builders and bankers and mortgage lenders (and certainly also decisions by government regulators and bureaucrats). If businessmen are so smart, how did they create this recession? And if they are so smart why didn’t they realize that was happening? And if you want to lay it all at the feet of government bureaucrats (at agencies like HUD and Fannie May and Freddie Mac) then you are admitting that all of those businesspeople were duped. But how could they be duped if they are so smart? Perhaps it is because they are not so smart after all.

Government can certainly learn things from business. But the idea that government should be run like a business is silly and simplistic.    

How Do You Deal With Morons?

That’s not a hypothetical question. How do we deal with people that don’t recognize facts?

Let’s say, for example, that we are doctors and we have an ill patient. A quick test reveals a bacterial infection, and the standard treatment is a penicillin like antibiotic. But let’s say that another doctor says that he doesn’t believe in modern medicine and thinks the best solution is the application of leeches and bleeding. Most people would say ignore the other doctor. But what if he is the chief resident? Or what if he is a United States Senator and the question is not what to do with a sick patient, but what to do with a sick economy?

Republicans are saying that President Obama’s stimulus package was a complete failure. Senator Mitch McConnell has said it, Republican Senatorial Candidate Rand Paul said it, and Congressional Candidate Andy Barr said it. Here’s a news report that says otherwise:

According to the report: 

The massive stimulus package boosted real GDP by up to 4.5 percent in the second quarter of 2010 and put up to 3.3 million people to work, the nonpartisan Congressional Budget Office said on Tuesday. 

CBO’s latest estimate indicates that the stimulus effort, which remains a political hot potato ahead of the November congressional elections, may have prevented the sluggish U.S. economy from contracting between April and June.

That is hardly a failure. Now the stimulus may not have been the best way to revive the economy, it might be bad economic theory, and it might be an inappropriate governmental intrusion into the economy. All of those statements are matters of political opinion. But to call the stimulus a failure is simply false.

And that brings me back to my question: how do you deal with people that do not recognize facts?

How can we address important public policy issues with people who are simply incapable of dealing with facts that they do not like? Would we go to a doctor who does not believe in modern science? Probably not. But the problem is that we have people who are in positions of power who are incapable of believing in facts and much of the modern world. And because of their elected position we have no choice but to deal with them on some level. But how?

I think that the only thing that we can do is to restate the base line facts in every interchange. Every time a Republican politician says the stimulus was a failure, point out that the CBO says otherwise, and then say we can debate the policy but we shouldn’t have to debate the facts.

There is an exercise in philosophical debate called the definitional inquiry. Before any philosophical discussion the parties agree on the basic underlying facts and the meaning of the terms that they will be using. That way they can have a rational debate. The law engages in a similar exercise. Early on in any case the parties have to set out some agreed facts so that the court and the parties know roughly what is in dispute. You don’t want the parties to a car wreck wasting time on issues regarding divorce or defamation. Unfortunately there is nothing even remotely similar in public and political discourse. But there should be. How can we debate the economy, and possibly craft a solution to current economic problems when the parties to the debate don’t even agree on underlying facts? It makes the process impossible. And that it part of the problem with our current national debate on most issues.