Second Thoughts

Use cliffsedit.bas to reformat garbled internet gathered text.

Getting cliffsedit into Microsoft Word and assigning a keystroke:
• Open a blank MS Word page,
• switch to Explorer www.lava.net/cslater/cliffsedit.bas and in Explorer do a Ctrl-A to highlight all,
• then Ctrl-C to copy,
• switch to Word (alt-tab), Ctrl-V to paste.
• File/Save as “cliffsedit.bas” in Filename, with “Text only” in the “Save as type.” Then enter and close the file.
• Open Tools/Macro/and click on “Visual Basic Editor”
• In Visual Basic Editor click on “Normal” in the upper left box.
• Then File/Import File/the folder to which you save it/cliffsedit.bas
• Then File/Close File and return to Microsoft Word.
• Open Tools/Customize, then click “Keyboard,” then in Categories click on macros, in macros click on cliffsedit, in ‘press new shortcut key’ enter Alt-F12 (or whatever you prefer but check that it is not in use) then click Assign, then close.
• You are done.

A SECOND OPINION column from the Honolulu Advertiser, 12-19-05

All prior footnoted columns are at: www.lava.net/cslater

After the way the Bush Administration has been blitzed lately for its environmental policies, it was interesting to spend time last week with the new Deputy Secretary of the Interior, Lynn Scarlett, to get her point of view. And, since she has only just left her former position of Assistant Secretary for Policy, she is the horse’s mouth for the administration’s environmental policies.

We talked mostly about Interior’s new “cooperative conservation” policies, which emphasize cooperating with the private individuals, companies and institutions, together with state and local governments, as the most effective way of implementing environmental legislation.[i]

Examples of cooperation are:

Working closely with Chevron Hawaii to protect and manage a population of the endangered Hawaiian stilt and Hawaiian coot at the James Campbell Industrial Park refinery on the Ewa plain.[ii]
Working with California winegrowers to help fund the planting of elderberry plants around grape vines to provide habitat for the endangered elderberry beetle.[iii]
Helping Maui Coast Land Trust fund the purchase of 277 acres of undeveloped coastal dunes on the island with a $1 million grant.

The present change is more one of emphasis than radical change. Earlier policies relied more on coercive regulation to conserve the environment rather than the current policy, termed “cooperative conservation,” where they rely more on willing cooperation among the various stakeholders.

The more virulent of the environmentalists have excoriated the new emphasis as being everything from a “conservation con game”[iv] to a “campaign ploy” to dismissing it “just another name for voluntary partnership …. It’s not enough.”[v] Which raises the question, if voluntary is not enough, will only coercion do?

Having just read Thomas Sowell’s recent and fascinating article, “Them or Us,”[vi] I felt that some of this criticism had a familiar ring to it. Sowell says that, “true believers don’t think in terms of trade-offs and cost-benefit analysis.” It is not about “which policy would produce what results. It was about personal identification with lofty goals and kindred souls.”

For example, no one ever suggested that Ronald Reagan get a Peace Prize for bringing the Soviet Union to its economic knees — even though that ended the Cold War.[vii] To be lauded by the peace lobby requires that one show a dovish approach to the subject — regardless of results.

Scarlett says results are what counts; getting the best environmental bang for the available government buck. If ranchers discover endangered plant species on their properties, it should be in their best economic interests to conserve them, rather than plough them under in order to retain full rights over their land.

One of the ways of dealing with such situations is the development of Safe Harbor Agreements. The Environmental Defense organization says, “The basic idea … is that people who do good deeds shouldn’t be punished for doing them. And so, in a Safe Harbor agreement, a landowner commits to doing a “good deed” for endangered wildlife — usually by restoring or enhancing habitats for endangered species — and the government pledges not to “punish” the landowner for doing that good deed.”[viii]

Scarlett point out that voluntary private efforts, alone or in conjunction with federal and state assistance, have been largely overlooked. For example, in the year 2000 non-regulatory efforts preserved nearly two million acres of wetlands.[ix]

For those with the mindset that the only way to deal with private individuals and companies is through coercive legislation and regulation, this change of emphasis is going to be unsatisfactory. It would seem they would prefer to do battle with what they see as the “enemy,” rather than seek reasonable or even preferable solutions.

However, the only satisfactory and sustainable resolution to any dispute is when it is win-win rather than win-lose. The win-lose resolution invariably results in an outcome that leaves bitterness with the loser and a desire for revenge. Thus, often win-lose turns into lose-lose.

The win-win aspect of “cooperative conservation” may well turn out to be one of those extremely rare government policies that not only works, but has nearly all the participants satisfied with it.

Cliff Slater is a regular columnist whose footnoted columns are available at: www.cliffslater.com

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Footnotes:

[i] Scarlett pointed out that the Endangered Species Act originally called for incentives in its conservation efforts.

“ENDANGERED SPECIES ACT OF 1973. Sec. 2(a)(5) encouraging the States and other interested parties, through Federal financial assistance and a system of incentives, to develop and maintain conservation programs which meet national and international standards is a key to meeting the Nation’s international commitments and to better safeguarding, for the benefit of all citizens, the Nation’s heritage in fish, wildlife, and plants.”

[ii] http://www.fws.gov/pacificislands/wnews/chevron.pdf

[iii] Winegrape leaders honored for conservation efforts. Capital Press. 12/15/2005.

[iv] Conservation con game. St. Louis Post-Dispatch. September 22, 2005.

[v] Natural Resources Defense Council

[vi] Sowell, Thomas. “Them or Us.”

[vii] Note that the Nobel Peace Prize for 1990 went to the U.S.S.R’s Mikhail Gorbachev.

[viii] Environmental Defense describes Safe Harbor Agreements.

[ix] Gale Norton & Ann Veneman. There’s more than one way to protect wetlands. New York Times. March 12, 2003.

Published: November 20, 2005
INSANITY,” the old saying goes, “is doing the same thing and expecting different results.”

That adage came to mind as I watched the Congressional hearings into accusations of gasoline price gouging and windfall profits for the oil companies. Real “men in white coats with straitjackets” insanity came to mind as I read about Republicans in committee voting a few days ago to tax the stockholders of oil companies with what amounts to a windfall profits tax.

The back story, as everyone knows by now, is that energy prices shot up like mad after the disastrous results of Hurricane Katrina became known. In sequence, gasoline prices rose, heating oil rose and natural gas, which is priced somewhat differently from oil, also rose significantly.

The wise men on Capitol Hill apparently have so little education in economics that they believed that the rise in oil prices was a conspiracy fixed by the large oil companies. Not only that, but the oil companies reported large profits for the most recent quarter, and this also supposedly showed something nefarious at work that needed Congressional tampering to be set right.

Herewith, a few respectful thoughts in reply:

First, the price of oil is a worldwide commodity price. (Natural gas is set on a national or North American basis.) It is set on commodities markets all over the world, but largely in the United States and Britain. This was not always the case. Once, oil prices were set by a cartel, the Organization of the Petroleum Exporting Countries, or OPEC. But now, with the advent of free markets in oil futures, oil prices are set on a market.

This means that the price of oil cannot be set by any one person, like Hugo Chávez, or by any one country, like Saudi Arabia or Kuwait. Many entities, people and events can affect the price of oil, but it is ultimately set on a world market. This is an incredible advance over the old system in many ways. The main one is that, barring a major war, there cannot now be times when oil is simply unavailable. The price will allocate the output so that there will always be gasoline and heating oil available, at some price.

For those of us who lived and suffered through the oil shocks and closed gas stations in the early and late 1970’s before there was a free market in oil futures, this is a blow for freedom. I cannot imagine that any sane person would rather have no gasoline available at the pump, but at an (imaginary) low price, than have gasoline available at a high price. The free market in oil involves greedy speculators and maniac traders, but they make sure that gasoline is available – and that is no small thing.

Next, “profit” is not a bad word. When profit is earned by oil companies, it does not go to King John or to the Sheriff of Nottingham. It goes mostly to widows and orphans and pension funds who are owners of the big oil companies. They risked their savings for years when oil prices were low and profits were modest. Now, when they have a good quarter, the Bill O’Reillys want to take it away from them. Why? If, instead of saying “stockholders of oil companies,” you say widows and orphans and pensioners, do you, Senator Barbara Boxer, really think that allowing them to have a good profit is an awful idea? If oil company profits are bad, why are profits at hedge funds sacrosanct?

I am always amazed that no one in Congress raises a finger when entities that perform the valuable function of trading derivatives based on arcane debt instruments make staggering profits that go into making their traders multimillionaires at 30 – and good luck to them, I say. But when a company that allows us all to heat our houses and drive our children to school makes money, somehow that is a sin. Why?

Do we really want to punish the people who risk billions to bring us oil from deep under the ocean, then pump it out, refine it, add chemicals to it to make it less polluting, then have it on the corner for us to put into our cars – and still sell it at a price less than that of a bottle of water from a tap that’s been barely filtered? Why do we hate the oil companies that basically make our lives possible and turn a blind eye to the people making millions basically by playing poker against one another?

Next, what possible evidence is there of any price collusion by oil companies? If there were such price fixing, it would be illegal already under existing antitrust laws. For decades, in investigation after investigation, no collusion has been found. If it exists now, the Justice Department can find it. But why just suppose it’s there because a huge storm in the prime energy-producing region of our nation knocked out refineries and caused gas prices to rise? Occam’s razor: Do not multiply entities. If it seems that a simple explanation is the explanation, go for it unless there is proof to the contrary.

AND what historical evidence do we have that government meddling in the oil and gas patch improves the situation? Under my old boss, President Richard M. Nixon, we tried an amazingly complex system of regulating the price of already found, or “old,” oil while allowing a free market in “new” oil. The results were a disaster. Under President Jimmy Carter, we had Congressional movement toward actual gasoline rationing. Did any of it do a bit of good? No, but since we have had the free market in oil, we have had peaks and valleys in price, but no real cutoffs – and this is a blessing indeed.

By the way, if the oil companies could fix prices at artificially high levels, why have they allowed them to collapse in the last few weeks? Why not keep them high indefinitely? Or did Bill O’Reilly scare off Big Oil?

Yes, I loathe the speculative premium in energy prices. Yes, I wish that I did not have to pay as much when I fill up my car. But the idea that there is a conspiracy at work, the idea that Congress can make it better by regulation – that’s insanity. To let the free market, the best economic idea of all history, work its magic – that’s good sense.

http://www.nytimes.com/2005/11/20/business/yourmoney/20every.html

October 25, 2005 — A reader recently sent me an e-mail about a woman he had met and fallen for. Apparently the attraction was mutual — until one fateful day the subject of the environment came up.
She was absolutely opposed to any drilling for oil in Alaska, on grounds of what harm she said it would do to the environment.
He argued that, since oil was going to be drilled for somewhere in the world anyway, was it not better to drill where there were environmental laws to provide at least some kinds of safeguards, rather than in countries where there were none?
That was the end of a beautiful relationship.
Environmentalist true believers don’t think in terms of trade-offs and cost-benefit analysis. There are things that are sacred to them. Trying to get them to compromise on those things would be like trying to convince a Moslem to eat pork, if it was only twice a week.
Compromise and tolerance are not the hallmarks of true believers. What they believe in goes to the heart of what they are. As far as true believers are concerned, you are either one of Us or one of Them.
The man apparently thought that it was just a question of which policy would produce which results. But many issues that look on the surface like they are just about which alternative would best serve the general public are really about being one of Us or one of Them — and this woman was not about to become one of Them.
Many crusades of the political left have been misunderstood by people who do not understand that these crusades are about establishing the identity and the superiority of the crusaders.
T.S. Eliot understood this more than half a century ago when he wrote: “Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm — but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.”
In this case, the man thought he was asking the woman to accept a certain policy as the lesser of two evils, when in fact he was asking her to give up her sense of being one of the morally anointed.
This is not unique to our times or to environmentalists. Back during the 1930s, in the years leading up to World War II, one of the fashionable self-indulgences of the left in Britain was to argue that the British should disarm “as an example to others” in order to serve the interests of peace.
When economist Roy Harrod asked one of his friends whether she thought that disarming Britain would cause Hitler to disarm, her reply was: “Oh, Roy, have you lost all your idealism?”
In other words, it was not really about which policy would produce what results. It was about personal identification with lofty goals and kindred souls.
The ostensible goal of peace was window-dressing. Ultimately it was not a question whether arming or disarming Britain was more likely to deter Hitler. It was a question of which policy would best establish the moral superiority of the anointed and solidify their identification with one another.
“Peace” movements are not judged by the empirical test of how often they actually produce peace or how often their disarmament tempts an aggressor into war. It is not an empirical question. It is an article of faith and a badge of identity.
Yasser Arafat was awarded the Nobel Prize for peace — not for actually producing peace but for being part of what was called “the peace process,” based on fashionable notions that were common bonds among members of what are called “peace movements.”
Meanwhile, nobody suggested awarding a Nobel Prize for peace to Ronald Reagan, just because he brought the nuclear dangers of a decades-long cold war to an end. He did it the opposite way from how members of “peace movements” thought it should be done.
Reagan beefed up the military and entered into an “arms race” that he knew would bankrupt the Soviet Union if they didn’t back off, even though arms races are anathema to members of “peace movements.” The fact that events proved him right was no excuse as far as members of “peace movements” were concerned. As far as they were concerned, he was not one of Us. He was one of Them.