Saturday, September 1, 2007

Presidential Energy Records, Part I

I'm feeling a little lazy, so I'll just publish some records of presidential candidates on energy and oil (from: www.ontheissues.org). Part I: The Democratic Primary Candidates for President. For the most part the policies reflect a strong concern over the environment (especially for global warming), which may be the larger issue anyway. (As I've mentioned before, energy itself will be available to fuel our cars for the foreseeable future using what's in the sands of Northern Alberta once the embarrassingly cheap reserves in the Middle East dry up.) Like we would expect from the Left, they are generally opposed to corporate subsidies.

Joe Biden:
Voted YES on removing oil & gas exploration subsidies. (Jun 2007)
Voted YES on factoring global warming into federal project planning. (May 2007)
Voted YES on disallowing an oil leasing program in Alaska's ANWR. (Nov 2005)
Voted YES on $3.1B for emergency oil assistance for hurricane-hit areas. (Oct 2005)
Voted YES on reducing oil usage by 40% by 2025 (instead of 5%). (Jun 2005)
Voted YES on banning drilling in the Arctic National Wildlife Refuge. (Mar 2005)
Voted YES on Bush Administration Energy Policy. (Jul 2003)
Voted YES on targeting 100,000 hydrogen-powered vehicles by 2010. (Jun 2003)
Voted YES on removing consideration of drilling ANWR from budget bill. (Mar 2003)
Voted NO on drilling ANWR on national security grounds. (Apr 2002)
Voted NO on terminating CAFE standards within 15 months. (Mar 2002)

Hillary Clinton:
Voted YES on removing oil & gas exploration subsidies. (Jun 2007)
Voted YES on making oil-producing and exporting cartels illegal. (Jun 2007)
Voted YES on factoring global warming into federal project planning. (May 2007)
Voted YES on disallowing an oil leasing program in Alaska's ANWR. (Nov 2005)
Voted YES on $3.1B for emergency oil assistance for hurricane-hit areas. (Oct 2005)
Voted YES on reducing oil usage by 40% by 2025 (instead of 5%). (Jun 2005)
Voted YES on banning drilling in the Arctic National Wildlife Refuge. (Mar 2005)
Voted NO on Bush Administration Energy Policy. (Jul 2003)
Voted YES on targeting 100,000 hydrogen-powered vehicles by 2010. (Jun 2003)
Voted YES on removing consideration of drilling ANWR from budget bill. (Mar 2003)
Voted NO on drilling ANWR on national security grounds. (Apr 2002)
Voted NO on terminating CAFE standards within 15 months. (Mar 2002)

Chris Dodd:
Voted YES on removing oil & gas exploration subsidies. (Jun 2007)
Voted YES on factoring global warming into federal project planning. (May 2007)
Voted YES on disallowing an oil leasing program in Alaska's ANWR. (Nov 2005)
Voted YES on $3.1B for emergency oil assistance for hurricane-hit areas. (Oct 2005)
Voted YES on reducing oil usage by 40% by 2025 (instead of 5%). (Jun 2005)
Voted YES on banning drilling in the Arctic National Wildlife Refuge. (Mar 2005)
Voted YES on Bush Administration Energy Policy. (Jul 2003)
Voted YES on targeting 100,000 hydrogen-powered vehicles by 2010. (Jun 2003)
Voted YES on removing consideration of drilling ANWR from budget bill. (Mar 2003)
Voted NO on drilling ANWR on national security grounds. (Apr 2002)
Voted NO on terminating CAFE standards within 15 months. (Mar 2002)

John Edwards:
Voted YES on Bush Administration Energy Policy. (Jul 2003)
Voted YES on removing consideration of drilling ANWR from budget bill. (Mar 2003)
Voted NO on drilling ANWR on national security grounds. (Apr 2002)
Voted NO on terminating CAFE standards within 15 months. (Mar 2002)

Mike Gravel:
No recent record on energy. Strongly opposed to nuclear power because of waste issues. No strong record on energy alternatives per se. Focuses on Global Warming and waste issues.

Dennis Kucinich:
Voted YES on criminalizing oil cartels like OPEC. (May 2007)
Voted YES on removing oil & gas exploration subsidies. (Jan 2007)
Voted YES on keeping moratorium on drilling for oil offshore. (Jun 2006)
Voted NO on scheduling permitting for new oil refinieries. (Jun 2006)
Voted NO on authorizing construction of new oil refineries. (Oct 2005)
Voted NO on passage of the Bush Administration national energy policy. (Jun 2004)
Voted NO on implementing Bush-Cheney national energy policy. (Nov 2003)
Voted YES on raising CAFE standards; incentives for alternative fuels. (Aug 2001)
Voted YES on prohibiting oil drilling & development in ANWR. (Aug 2001)

Barack Obama:
Voted YES on removing oil & gas exploration subsidies. (Jun 2007)
Voted YES on making oil-producing and exporting cartels illegal. (Jun 2007)
Voted YES on factoring global warming into federal project planning. (May 2007)
Voted YES on disallowing an oil leasing program in Alaska's ANWR. (Nov 2005)
Voted YES on $3.1B for emergency oil assistance for hurricane-hit areas. (Oct 2005)
Voted YES on reducing oil usage by 40% by 2025 (instead of 5%). (Jun 2005)
Voted YES on banning drilling in the Arctic National Wildlife Refuge. (Mar 2005)

Thursday, August 30, 2007

Sub-Prime Lending

Quick comment on subprime lending. Today, the NYTimes ran a report describing the ruling in bankruptcy court that denied Bear Stearns (based in the Caymans) bankruptcy.

I've heard about every story on who's to blame-- some people say it's all Bear Stearns, others say it's the people who took out the loans in the first place, others still say it was the people who agreed to take the mortgages as collateral in securities transactions, borrowers began defaulting as interest rates rose, the securities bombed and the collateral was worthless. Which leads back to Bear Stearns. Then, somebody I know tried to goat the government for it because they tried to create more opportunities for lower-income families to take out loans. When in doubt blame Uncle Sam.

This whole mess is more or less on Bear Stearns. I have to hold them responsible for making risky loans to folks without the means to keep making payments once rates rise and monthly payments double. They knew what they were doing, if anyone did. The borrowers screwed up, but they weren't motivated by greed. And now the judge is making them pay their own debts. Good.

Tuesday, August 28, 2007

The Dirty Secret Behind "The Dirty Secret Behind America's Energy Future"

Jeff Godell's book, "Big Coal: The Dirty Secret Behind America's Energy Future," has gotten a resurgence of media attention in recent days because of the events that have transpired in the Utah mine tragedy and the more recent tragedy of a similar nature in China. One of the things Godell blasts the coal industry for is safety (hence the newfound media attention). Now, if you've read my other posts on energy, you'll know that I'm no blind defender of Big Coal. I am, however, a big fan of making sure that if I'm going to pour my outrage, and that I target it where it will do the most good.

Around the time of a BIG EVENT with LOTS OF MEDIA, nearly every politician has to make sure they are on the public record "saying the right thing," and showing the appropriate amounts of outrage over the incident, resolve to do more from now on, and contrition that nothing was done sooner that would have saved the lives of the noble citizens who met their ultimate demise. But do we mete out our attention, sympathy, outrage and action equally? Well, OF COURSE NOT. It's a "law of small numbers" thing (the principle comes from the properties of the Poisson Distribution of statistics and referenced in Thomas Pynchon's fictional novel, "Gravity's Rainbow"). Basically, the way I'm going to apply it is to say that because certain events are so unexpected generally, that when they do occur they tend to grab our attention and affect behavior disproportionately to their risk of occuring again. My point is, there are hundreds of on-the-job fatalities every year (over 1400 in manufacturing) and almost none of them make Headline News. Why? They're just too damn common to be newsworthy! Hence, there is almost no public outcry for the government to take action. It's kind of like flying versus driving-- people are terrified of planes even though it's widely known that driving is statistically much more risky. (Again, there are so many damn car wrecks there's no way the news is going to start sending crews to them...) Does the fact that a certain type of fatality is more "common" or "mundane" make it less tragic?

Back to mining... Have I mentioned that economists like to back stuff up with data? So, the Coal mining industry actually has a much LOWER incidence of on-the-job fatality than the general manufacturing sector (according to the Bureau of Labor Statistics, manufacturing had about 3 fatal incidents per 1,000 workers in 2006 whereas coal had about 0.8 per 1000 workers). So, even if, as Mr. Godell asserts, coal accidents increase drastically over the next several years, it is unclear that our regulatory efforts are best-placed in that sector. It is conceivable that many more lives would be saved by fortifying safety regulations in a more general way rather than targeting coal. Not only that, it seems to me that the dangers of mining coal underground are not unforseen, so miners who choose that line of work are making an informed choice-- and are compensated for the perceived risk. In fact, despite a lower incidence of fatalities, COAL miners out-earn their colleagues in the manufacturing sector by about $7 per hour.

So, with all of this in mind, where should we spend our regulatory dollars? In coal, where there were just 78 fatalities in 2006, and incidents were relatively rare, or in the manufacturing sector or in a more general way altogether, where there are far more fatalities (and lives that could potentially be saved), but far less media attention? Should the media's crocodile tears and misinformation dictate where our tax dollars are spent? Maybe I'm a jerk, but as my students know, I want to make sure that I get the most "Bang" for my buck.

Monday, August 27, 2007

All New Meaning to "Cost of Living"

Several days ago, I was on a rant about Lou Dobbs calling economists "idiots" and "jackasses." But, while we tend to know what we are talking about a good deal of the time (usually with data and ituition to back up our stories), we are also really big jerks. Case in point: most "normal" people would hear the phrase, "you can't put a price on a human life" and agree without a second thought. Eonomists hear this, and ask, "can you back that claim up with data?" In fact, human life does have a price put on it, and economists aren't to blame.

Economists have actually done calculations to try to infer the cost of dying using data that are readily available. Frank Ackerman has "priced" a number of things, including death, in his pamphlet, "Pricing the Priceless." So how much is a human life worth? On average, between 1 and 6 million, depending on certain characteristics. But here's the catch: Computations aren't entirely made on the basis of earnings, life expectance at birth, etc.-- They're made by observing and evaluating our own behavior. If you feel this cheapens your worth as a person, you have yourself to blame. Here's one approach that's been used. Take construction workers, and survey their hourly earnings. Now survey the compensating differential between working on the first floor and working on the thirtieth floor. Next, calculate the increase in the risk of dying on the job, and there you have it. The price these construction workers have voluntarily put on their own lives using this back-of-the-napkin approach is about 2 million dollars.

So, the next time you run a red light,. think about the 30 seconds it saves you, the risk of dying you assume by doing it, and the fact that somewhere an economists might be watching.

Tomorrow, I will focus on the information distortion we get from the media-- are we evaluating the risk of death or disaster appropriately when we weigh whether or not to fly vs. drive, or in measuring our level of outrage for government action for things like mining regulations, bird flu precautions, etc.