Fast Times on Planet Earth


…a reminder that the connectedness of the world and the instantaneous global spread of images have consequences that are unfolding more quickly than anyone can anticipate or make sense of.

For a positive take on one possible path read Sawyer’s Neanderthal Parallax trilogy.
One thing that neither Fallows or his chinese correspondent take note of is that in most places in the united states you can still take the pictures and post them for the world to see.

The Port of New Orleans Should Find Its Own Money

This gentleman, the Executive Director of the Port of New Orleans, thinks that you should keep paying to keep the silt from building up on the Mississippi River bottom:

“All that water is bringing a whole lot of sediment,” LaGrange says. “When it starts falling, the sediment will drop out.” He says the Lower Mississippi has a design channel depth of 45 feet. “The last five years, the cost of dredging the Lower Mississippi River is $104 million. On an average, Congress and the Administration have appropriated $55 million to $65 million.” He explains that previously, when it ran out of funds in September, the Corps would “reprogram” funds from districts that had a surplus, and they would make their depth. “We received an announcement that this year they would no longer reprogram funds. Now, with the higher rivers, the shipping industry has projected that that shortfall will be $95 million.”
He leaned forward in his chair. “Every foot in lost depth costs the economy $1 million per ship call,” says LaGrange, because ships have to carry lighter loads. Less cargo equals less production. “We have 12,000 ship calls per year.”
That’s $12 billion per annum. “And we need $95 million.” He thinks the government should find the money.

I won’t spend time questioning his claim of economic loss.
Rather, there is a very straight forward mechanism for getting the $95 million/year. One that places the cost of dredging more closely to where it belongs.
Lagrange claims 12,000 ship calls per year. Assessing each ship call $8000 will generate $96 million.
Very straightforward and helps reduce the deficit. Lagrange should find the money. By his numbers his operation will get a rather large return.
I suspect the only ones who would oppose this are the Corp of Engineers and the folks getting subsidized.

Eliminate Subsidies?

Matt Yglesias is right when he notes that “The large-scale subsidies the housing sector is one of the least market-oriented aspects of the American economy,…” and suggests that they be eliminated.
Agreed, they should be eliminated.
As he is so keen on making the economy more market-oriented he should not object to properly extending his principle.
Let’s get rid of all the various federal, state and local monetary subsidies, organizational protective legislation and imposed monopolies.
This will go far towards satisfying Matt’s desire for a more market-oriented economy.
An extra benefit might be reducing the long-term deficit as long as the reduced expenditures aren’t spent on other market distorting activities like wars.

Quote of the Day: A Lesson From Counterculture Economics

We were going along really well. And then the crowds came in. All the people who were looking for something….[There were] too many people to take care of and not enough people willing to do something. There were a lot of people looking fo the fee ride. That’s the death of any scene, when you have more drag energy than you have forward-going energy.”
From Blair Jackson’s excellent Garcia: An America Life, 1999, page 132 Paperback Edition

Garcia was referring to the Haight-Ashbury scene in the late 1960s. It was relatively small and crashed quickly under the weight of drag energy.

Larger societies, say continent spanning countries, will take longer to crash but the mechanism is the same and the results, well, they are likely to be much messier.

Clarifying Middle Class

Here is a chart that makes clear exactly what being middle class means in terms of income: an average annual household after tax income for the middle fifth of households in 2006 of $52,100. Simple interpolation suggests that the top of the middle income group is around $62,950.
Yglesias thinks the chart as a whole implies that:

…the trend is unmistakable. Higher taxes, more transfers, and more government services.

This is undoubtedly true as long as so many believe that government’s role, as our politicians state repeatedly, is focused on protecting and assisting those in the lower 2-3 quintiles.
The chart makes makes a pretty good case, though, that government actions have been around protecting and enhancing the wealth and power of that upper 20% and most particularly the upper 1%.
More taxes, transfers and services are palliatives applied to win votes and do little, if anything, to fix the structural problems that lead to such a poor distribution of income.

The only effective way to make the results among the quintiles more equal will be to change the structure of the economy so that the top 1% is no longer favored. This will require eliminating the extensive government interventions that feed the wealthy on the backs of the poor; on the backs, if you will, of the lower 90+%.