An economics query

I've just finished Thomas Friedman's The World is Flat and I have a question I'd like to present. I know a great deal more about using and repairing petroleum-utilizing equipment than petro-economics. In point of fact, all I know about econ is what I recall from one undergraduate course in the late 1960s. Which isn't much more than free trade grows and protectionism stunts economic development. I was impressed by but I have little background to evaluate his opinions. My concern is that there may be what psychology calls 'face validity' without empirical support. And since there is a great deal of business acumen trafficking DI I'd like to hear what knowledgeable folk have to say about one proposition.

Friedman challenges President Bush to take a page from John Kennedy's challenge to America to put a man on the moon in ten years. He notes this “was not a space race but a science race” in the the service of catching up and surpassing the Soviet Union after Sputnik. His challenge to Mr. Bush is “a crash program for alternative energy and conservation to make America energy-independent in ten years. If President Bush made energy independence his moon shot, in one fell swoop he would dry up revenue for terrorism, force Iran, Russia, Venezuela, and Saudi Arabia onto the path of reform – which they will never do with $50-a-barrel oil –strengthen the dollar, and improve his own standing in Europe by doing something huge to reduce global warming. He would also create a real magnet to inspire young people to contribute to both the war on terrorism and American's future by again becoming scientists, engineers, and mathematicians.” (p. 283)

Is this feasible?

David

 

I know virtually nothing of the hardcore economics but I'd point out that much of the necessary technology already exists. It could be improved and refined, I'm sure but this hasn't been done because the market doesn't seem to exist. While there are people who have begun to buy those little hybrid cars, the sales of SUVs continues to rise. I think the biggest challenge would be to convince the American public to change their lifestyles.
Jack

 

I say that the best route to energy independence is to design car engines that run on liquified bovine doo doo.

 

Going to the moon used then existing technologies with no major scientific breakthroughs needed (heck - I even used a slide rule back then).

Acquiring a new source of energy will require a major scientific discovery and who knows what or when that might be.

For the near future energy independance would need all the existing technologies (solar, tidal, wind, hydro, nuclear) to be brought on line.

 

You think ECONOMICS is bad? Go look at Clay's Quantum Mechanics thread!

 

Same

No! Look it the problem logically. Politically impossible at this time. When we switch to survival mode, changes will occur at warp-speed.

You can write a paper on the necessary political compromises needed to attempt to push the idea through. Friedman is a Monetarist. His theories are as bizarre as any theoretical physist's. The concept is fine, until reality kicks him in the teeth. Too many variables, and over simplification.

Most economists fail to realize they are dealing with "virtual" money, and actual people.

The guy that sells a book with an answer usually sells more than one who professes complete ignorance.

Economics-101
Define: Capitalism

 

The two challenges are not the same....

Going to the moon was a government effort that did not rely on the cooperation of the public. On the other hand, one cannot force the American people to buy something they don't want. As long as they can buy gas at reasonable cost the American people will opt to buy large, fast, comfortable, gas guzzling vehicles.....

 

If the world is flat what is on the underside? Plywood? A guy here in
Calif.runs all his diesel engined vehicles on vegetable oil. He collects used veg. oil from restaurants,puts it through a
strainer and then into his car.

 

Of COURSE you can force the American people to buy something they don't want to buy. Haven't you ever heard of taxation??

 

Same

He must sell his waste back to the restaurant I just left. Still trying to figure out what I ate? Ian, DTechBA, FWD, and Nosborne48 are right. We're lazy, spoiled, uninvolved, and over-taxed.
The economists call these "externalities", which they ignore in their equations. The solution is x , you do the math. And send me a check.

 

There is a growing chorus of Conservatives advocating change in our oil demands. Consider the group of former National Security Advisors who petitioned the president to consider advocating a policy shift from fossil fuels to alternative sources.

I think some are missing the point, hydrogen may be a long way off, but we could do substantially better in our CAFE standards. Europe is in the low 40's, and Japan is in the high 40's. Our average car's mpg is what mid 20's; that is pathetic. We could cut demand in half with existing technology, if not more.

Global growth in industrialization, especially Asian countries, demand will outstrip supply in 10-15 years, and that is a conservative estimate. The lifeblood of our economy is oil, why wait until there is another crisis and were ill-equiped to respond, why not make the change now, while we are still in a position of strength.

Instead of going to war over oil, and securing the supply, why not work on the demand side of it. I don't know maybe I am confused but it seems a more practical solution and saves lives. Not to mention several hundred billion dollars.

With the rising costs of gasoline and the rise of terrorism, it would not be to hard to convince reasonable individuals that it is time to make changes.

 

Re: The two challenges are not the same....

I agree with all of this except the second sentence. If the government modified its requirements regarding the emission standards for automobiles and the MPG requirements, then the car companies would comply (after a messy fight) and the people would buy the resulting cars (what choice would they have?) The whole premise of this thread is, "What if George Bush decided to prioritize this issue?" I believe that it could be done if the will to do it existed.
Jack

 

I agree with virtually everything Methos has written here except this last sentence. I believe that reasonable individuals no longer need to be convinced to make changes. They already know that changes are necessary.
Jack

 

H2

I have never quite understood the so called "hydrogen economy".

I have news for the President; "There is no free hydrogen available! We will have to make ALL of it, putting more energy IN than we will be able to get OUT!"

Hydrogen is NOT an energy source; at best it is a dangerous, tricky, inefficient means of transporting energy from here to there.

Soooo...it will make our energy consumption WORSE, not BETTER, all other things being equal.

But all other things AREN'T equal. Leaving the manufacture aside for a moment, liquified H2 requires such enormous pressures and/or intense cold that getting it into that state, transporting it, and keeping it there requires LARGE amounts of totally unrecoverable energy.

 

Same

I forgot Ted.

Methos and Jack,
You are talking about "The Theory of Perfect Competition, Rational Expectations, and Revealed Preference" in the same context. They are like oil and water. We know what needs to be done, but complacency and greed make the task similar to "pissin up a rope". And all the theories are flawed.
MPG should have been strictly regulated for all vehicles, with higher mileage requirements every model. But I'm sure someone would scream, their rights were being violated, and some attorney(s) would jump in.
We have allowed this to continue, since the gas wars of the seventies, and found voluntary compliance does not work. We pay more for unleaded gas, when lead is an additive. We pay more for diesel, when its pollutants are carcinogens, but we get better mileage. We suffer from HUA syndrome.
Alternative fuels are our goal, but not cost effective, and John Q worries about rich, idiot, brats, and being PC.
Without another fuel crisis, enough don't care. There are too few "reasonable" people.

My rant is over. Nilla wafer time.

 

Re: Same

Clay, this is helpful thanks. Would you mind explaining monetarist. I'm not familiar with the term.


David

 

I agree with you Nosborne. Hydrogen may not be viable for some time, maybe never. That is why I feel that we had better consider doing more to conserve the fuels we do have.

This should have been done a long time ago, really, it is amazing that we still have no plan for conservation in place. I can understand Clinton's explanation, although I do not entirely accept it...."It would have been difficult to increase CAFE standards with oil being eleven bucks a barrel". After getting creamed on trying to think ahead on health care, it is understandable that he shied away from trying to raise standards under those conditions.

Bush on the other hand, had and still has a great opportunity to make the change, yet, he is too narrow minded to think outside the box - at least in my humble opinion.

I work in the auto industry. I know it is more than possible to double the standards, and still get good cars. Sure there are issues, but the rewards far outweigh the negatives. All it would take to convince folks over time is the truth. You will be paying 5-10 bucks a gallon in a few years- or sooner - unless we do something to curb demand. I wont even get into all the other benefits to the environment, global relations, and national security, but it's substantial.

 

Re: Same

Wow, that's sounds pretty good. All this time I thought that I was just saying that any idiot can see that we're running out of gas and that maybe, just maybe we ought to think about doing something about it BEFORE the global shit hits the fan. Unfortunately, if history holds true, we will probably be reactive rather than proactive. The crisis will occur and we will not have changed anything. Then, we'll probably find some pretense to go to war against some oil-rich country rather than change our lifestyles.

Jack

 

Same

Sure. It deals with Monetarism which is the belief in slow stable economic growth, control of monetary circulation, and a laid-back view of government intervention. With this, the idea is things will reach equalibrium. A long, gradual process.
Neo- Keynesianism is the opposite. The idea is to speed growth by using government spending to influence demand. Chop-chop!
I guess a combination of some of the ideas would work, but I'm no economist. Hell, I haven't balanced my checkbook in four months. You might want to check this, if you are a computer person, I am not. So please don't take this as anything but a memory of something I read or a class. I know there must be an economist on board that can explain it much better than I. I remember Monetarism, because it takes time for my investments to grow. And I was thinking of Milton not Thomas. My error. So I got it backwards. Don't kick too hard, they played pincushion with my rear today. And ignore the spelling, I do.
Clay

 

Re: Same

It's easy to ignore the spelling since I didn't understand anything you said (my poor education, I'm sure). Except that part about the unbalanced checkbook, I can relate to that.

Jack