Please have some respect for the readers here, as we are apparently far more intelligent than you think.
Well, I am willing to listen to your solutions for the energy problems we face. Hopefully they don't raise the price of gas as the ethanol solution has done.
Of course, rorr's comment assumes a working free market, which is a fiction that apparently exists in his head. I'm not sure of any resources that are governed by a "free market"
On the contrary almost everything is controlled by a free market. While we may attempt to control things through price controls, mandates, and other types of government interference the free market will work through it. Oft times in very unexpected ways.
I'd rather have some government interference than a belief in a fantasy.
Government interference has created some very lackluster results. the biggest fiasco of government interference was the great depression.
Do you guys really think ALL the readers of these forums are that naive and uninformed?
No but I really get a kick out of those here who think they know what makes an economy work. Tell me where did you get your degree in Economics?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Me: E85 is said to be able to substitute for gasoline.
You: Well it isn't, E85 is a near perfect substitute for Gasoline in FFV's only.
I am sorry, I meant only in FFV's from the get go, as the underlying hope appears to be that "all will be FFV's" (NOT MY HOPE, the implied hope of our representatives in government to read their newsletters on the subjects.)
I also suggested that Ford's GREEN FFV and Hybrid TV advertising would lead you to the possible conclusion that the FFV is in the group that achieves that. I, in no way, meant that I believed this was the case.
Is it possible that the artificial demand (for ethanol in E10) and the corresponding high prices for E85 will create an unnecessary backlash agains ethanol in general?
Speaking honestly and only for myself - from my own personal feelings, I have to say "yes".
If ethanol were not be mandated and it's use were going into E85 (and offered at a competitive price in those markets where it makes sense), I'd have no problem whatsoever with ethanol. But since it is mandated, it automatically gets a black mark in my book.
Tell me where did you get your degree in Economics?
So, that is how you show respect for the other readers of this forum?
Just exactly how is there a free market in energy? The very existence of OPEC is proof enough that there is no free market.
The fact that the Bush Administration had secret meetings re energy policy is proof that there is no free market.
Entire energy industries are nationalized in some countries, which is further evidence of no free market.
You can't even buy a diesel car in California, again evidence of no free market.
There are tax incentives for this, tax incentives for that.
There is no "free market." There is a marketplace, but it is not a free market, as ANY economist envisions or discusses. The term "free market" has meaning, and it does NOT mean the marketplace that we are confronted with (wrt energy resources)
I am not saying that government intervention is always good, or that it is even EVER good (though I think we can agree that it is sometimes good, at least in the short run), but for you to expect us to bow down to your fantasy world free market is a bit too much.
We don't have an ENERGY problem. We may have a geopolitical problem, but we don't have an energy problem. Just what problem do you want to solve?\
Are you upset at Muslim Fundamentalists? Maybe you should have thought of that when the U.S. (and the rest of the anti-Soviets) created them in the first place.
I don't mind buying oil from Arabs, why do you?
Are you afraid we will run out of oil?
Again, I'm not sure what problem you have identified.
There is no "free market." There is a marketplace, but it is not a free market, as ANY economist envisions or discusses. The term "free market" has meaning, and it does NOT mean the marketplace that we are confronted with (wrt energy resources)
Bingo. And if some religious nutjobs decide that their interpretation of their faith warrants turning off the oil spigot, then there will be even less of a free market than there is now.
Anyone who thinks that we could react to a shutdown by building alt fuels plants and infrastructre in a matter of days or weeks is simply dreaming. The idea behind being prepared is to be able to react quickly if a nasty surprise occurs, rather than being held at gunpoint on our knees or being forced into a hot war in order to try to rescue ourselves.
The idea behind diversification is to reduce the likelihood of blackmail, and to have some countermeasures available if our worst fears are realized. The extra money that you spend now is an insurance policy for the future and to buffer the worst-case scenarios.
Time and again we have found the free market works pretty well. Wage and price controls, protectionism to extremes, prohibition, and as you mentioned the Great Depression are great examples of what NOT to do.
I don't know if I know what makes an economy work, it seems to work best though when it is more free rather than less.
I, for one, think virtually ALL of the readers of these forum are sophisticated and well-informed. I suspect some folks actually do have a degree or two and some of them are probably in econ.
I never underestimate the folks here -- mostly folks rise to the topic at hand; and, often they exceed my expectations.
From time to time we do seem to stall out or are forced by the sheer number of posts to revist and repeat.
For instance, I can go along for a day or two thinking that "everyone" agrees that a gallon of E85 will go about 70% as far as a gallon of gasoline (in an FFV) and someone will, out of the blue, drop in a post that seems to either dispute that or ignores it -- then the rest of us seem to swoop in and attempt to clarify this.
This stuff, this forum, is both educational and entertaining -- for many of us -- it is probably terribly boring for many others.
My degree, by the way, is from a little school in Ohio -- Miami University -- Oxford.
It is in history of hygiene: Hygiene through the Ages (just kidding.)
The idea behind diversification is to reduce the likelihood of blackmail, and to have some countermeasures available if our worst fears are realized. The extra money that you spend now is an insurance policy for the future and to buffer the worst-case scenarios.
The market (even if it was a "free market") does not care about that. Only people care about that. The market is willing to have lots of disruption, death, etc. while private interests hash out the problem. The market does not care if this takes humdreds of years. People do care, since they want to live without such dislocations. The free market is a brutal mistress. Fair, but brutal.
Why do people always trot out the BAD examples of government intervention. Why not the good ones? Without government intervention, we'd all be saluting Hitler's son. Without government intervention (public works) how many more people would have been ruined by the Depression? Sure, eventually the situation would have straightened itself out. Of course, had we let the market solve it, there's pretty much no question that we'd all be saluting Hitler's son today (or Hirohito's)
Government intervention needs to be done carefully, and sparingly. But it does have its place.
I think it's funny that people complain about how the US has done things wrt the economy, etc., and they want to make RADICAL changes, but these same people are adamant that the US is the greatest country on earth. Well, which is it? From where I sit, the US has done a pretty good job of things. And it's involved a LOT of government intervention, laws to protect worker safety, laws to protect clean air and water, laws to protect against child labor. Yeah, all this government intervention has really been terrible :confuse:
"I think this was meant to disparage any governmeht efforts."
Yes, it was. I'll try not to be so sarcastic in the future; it apparently leads to confusion.
"Of course, rorr's comment assumes a working free market, which is a fiction that apparently exists in his head."
Actually, the term 'working free market' is open to much interpretation. Your definition may vary from mine. So, rather than get bogged down in the minutia of what a 'working free market' is (your term), I'll simply say that I believe that as markets are MORE free from government intervention, they become more able to react quickly and plan ahead. The inverse also applies (meaning that the MORE the government intrudes itself on a problem, the slower the response and the less likely a real solution will be found). Yes, these are generalities. Yes, there are SOME situations were government is necessary (I'm no anarchist). But I think if one were to simply look for examples, I could find more examples of the private sector reacting quicker and more effectively than the 'gubmint'.
"I'd rather have some government interference than a belief in a fantasy."
Actually, you could have both. :P It's not unheard of.
"Leave ir to the anti-gubmint types to assume that the argument is (a) free market or (b) central planning of our travel plans."
Was my 'travel plan' comment a bit far fetched? Yes. Maybe I should have just said 'price controls' instead.
So, that is how you show respect for the other readers of this forum?
Hey you gave a big lecture in economics that is just plane silly, I was just wondering if there was a school that actually taught that.
Just exactly how is there a free market in energy? The very existence of OPEC is proof enough that there is no free market.
The fact that the Bush Administration had secret meetings re energy policy is proof that there is no free market.
There were no secrete energy meetings, those groups that claim there were and that they were locked out of the meetings were actually invited, they just refused to attend.
The very fact that OPEC only has limited ability to control the market shows that the free market is working. Many oil exporting countries do not belong to OPEC and many OPEC countries fight among themselves.
You can't even buy a diesel car in California, again evidence of no free market.
I am not saying that there is no government interference just that the free market will work its way around it. California and diesel engines are a perfect example of that. You cannot buy a new diesel in California but you can buy a used one (as long as certain conditions are ment such as the car having at least so many miles). There are people that live outside California that buy diesel cars, drive them around until they get the minimum amount of miles and sell them in California.
Again where is it that you got your degree in economics?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Huh the market is people, people working together.
Not everybody wants to work together, or at least work with us. Let's recall the dark days of the OPEC crisis, the Iran hostage crisis and 9/11 before we start presuming that everyone wants to work with us just because we have a checkbook and a penchant for free market rhetoric.
Why do people always trot out the BAD examples of government intervention. Why not the good ones?
because the bad ones far outweigh the good ones.
Without government intervention (public works) how many more people would have been ruined by the Depression?
It was our government that created the Depression.
I think it's funny that people complain about how the US has done things wrt the economy, etc., and they want to make RADICAL changes, but these same people are adamant that the US is the greatest country on earth. Well, which is it?
It can't be both? The best of almost anything can be improved.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Are you upset at Muslim Fundamentalists? Maybe you should have thought of that when the U.S. (and the rest of the anti-Soviets) created them in the first place.
I think that the Wahabi sect (of which OBL is a follower)was around in the 12th century long before the Soviet Union.
I don't mind buying oil from Arabs, why do you?
No problem. I think it best to use theirs and save ours, just have it close to production status.
Are you afraid we will run out of oil?
Not in our lifetime!
Again, I'm not sure what problem you have identified.
The one where the government mandates the use of a product (ethanol in this instance) that is of little use and cannot sustain itself in the market place without my taxes propping it up.
I subscribe to Consumer Reports and from time to time I get emails asking me to participate in a survey. Just today I got one of those emails. It had to do with my level of interest for potential upcoming articles on 3 topics. 2 of the 3 had to do with the ethanol deception. I hope CR does this story because they have a good reputation for their objectivity and they do have a lot of readers.
This whole ethanol issue bears a lot of similarity to the fuel cell hype of a five years ago. Initially everyone wanted to believe in its potential but then reality started to set in. Its refreshing to see that as the facts get scrutinized more and more people are shifting their position. And its not in favor of ethanol.
The fact that the Bush Administration had secret meetings re energy policy is proof that there is no free market.
I love how these "secret meetings" with people in the energy sector are always used as an attack against our national energy policy. (most of which was never even implemented because it died in congress) If we're not careful, the Bush administration might also have "secret meetings" with doctors to formulate a health care policy.
You can't even buy a diesel car in California, again evidence of no free market.
California has a long history of regulating energy markets. I seem to recall rolling blackouts there a few years back.
Just exactly how is there a free market in energy? The very existence of OPEC is proof enough that there is no free market.
Entire energy industries are nationalized in some countries, which is further evidence of no free market.
Just because other countries manipulate their petroleum markets doesn't mean we should.
Getting back to ethanol, we now have this huge government mandate and subsidy for ethanol. Everyone under the sun is committing resources to research new ethanol production methods and adding ethanol production capacity. How many of those resources were diverted away from research into, and infastructure for, other possible alternative energy sources? If you're the head of the research department of a large energy company, what do you do if you can get a huge subsidy and guaranteed market for ethanol from the government?
I do not have a degree in econ, but I had a roommate who became Greenspan's right-hand man, and now runs a very large piece of an investment bank in Boston
He put me to sleep with his econ lectures on a nightly basis
I learned much of my economic theory at his knee, mostly in a beer-induced haze
Since you are the one giving the econ lecture, where did you get your degree?
I am not arguing that there are no "markets" I am taking issue with your misuse of the term "free market"
But I think if one were to simply look for examples, I could find more examples of the private sector reacting quicker and more effectively than the 'gubmint'
of course that's true, since the government does not interfere with every aspect of the market (whereas, by definition, the private sector is in every aspect of the market)
I am not anti-private enterprise. But to dismiss a government effort simply because lots of government efforts are stupid, is not good logic. You have to analyze each program to determine if it should go forward. There are plenty of examples of good government action. And there are also PLENTY of examples where private enterprise, in the absence of any government action, completely bolloxed things up, including causing the deaths of innocent people, etc. etc.
I'm pretty certain that none of you could tolerate an economy guided by the invisible hand.
It's a rather academic argument, however, since there has never been an economy guided by simply the invisible hand in any time in written history.
but you guys can continue to flog the government and pat yourselves on the back for how you read Ayn Rand. But you are dreaming, so how about we get back to reality?
Me: Are you upset at Muslim Fundamentalists? Maybe you should have thought of that when the U.S. (and the rest of the anti-Soviets) created them in the first place.
Gagrice: I think that the Wahabi sect (of which OBL is a follower)was around in the 12th century long before the Soviet Union.
The fact is, the Wahabi sect had absolutely NO politcial power or ability to accomplish anything of any consequence to you or I until AFTER the anti-Soviet forces trained it and armed it. It was the anti-Soviet forces that opened this Pandora's Box, plain and simple. (which is why I am in favor of those same forces paying to eliminate the Islamists)
But since that is not the problem that concerns you, I am happy to let the conversation get back to government subsidies. I thought the problem that you were concerned with had to do with energy independence from unfriendly states.
I do agree with energy flexibility and encouraging alternate energies and ways to conserve. Hell, we subsidize the nuke industry, why not the solar industry.
If there were only an invisible hand, does snake think nuke power would exist?
We are on the same page now. Also Saddam during the Iran & Iraq war was our man. If you get a chance read the Robert Kaplan book "Soldiers of God (with the Mujahidin in Afghanistan). OBL was kind of late to that Soviet war. We did arm him though.
I have no problem with Ethanol as fuel. I think spending money to come up with a system that is energy positive is the proper direction. If we can make the stuff from old gym shoes or whatever. I am against making it from corn. It is all wrong for America. It is a dead-end street that we have been down before more than once and wasted resources in the process. Even Brazil making it from sugar cane is a losing proposition. They got dumped on as well. New generation needs a new lesson I guess.
It's a rather academic argument, however, since there has never been an economy guided by simply the invisible hand in any time in written history.
but you guys can continue to flog the government and pat yourselves on the back for how you read Ayn Rand. But you are dreaming, so how about we get back to reality?
No, there has never been an economy guided purely by economic forces without any government control. Ours is the closest. It is also the most prosperous economy ever. In the last century, many nations attempted to have planned economies. They all failed.
I am not anti-private enterprise. But to dismiss a government effort simply because lots of government efforts are stupid, is not good logic. You have to analyze each program to determine if it should go forward. There are plenty of examples of good government action. And there are also PLENTY of examples where private enterprise, in the absence of any government action, completely bolloxed things up, including causing the deaths of innocent people, etc. etc.
There are many things the government is better at, and should be regulating. They're listed here. Creating economic demand through mandate and subsidy isn't one of them.
But to dismiss a government effort simply because lots of government efforts are stupid, is not good logic
I agree. Its equally bad logic to defend a government effort by stating that they are occasionally worthwhile. Is pursuing ethanol production justified when the costs and benefits are weighed against each other? It seems to me that every objective article I read on the subject says no. So the only conclusion I can draw is that the government has a hidden, political agenda. When this is the case I think the odds of them accomplishing something worthwhile are greatly diminished.
BTW, you cited a friend that became an assistant to Greenspan as being a big influence on your economic beliefs. I could be wrong but I suspect that Greenspan believes strongly in a lot of Ayn Rand's philosophies.
. . .two media outlets printed articles about E85.
Both media outlets (one a newspaper from Nebraska the other a national weekly newsmagazine) agreed that E85 requires the user to accept a relatively stiff miles per gallon (miles between fillups) penalty.
One publication said the cost of E85 exceeded the cost of gasoline, the other publication said the cost was lower (and based ONLY on what I have learned here, I could calculate that the lower cost did not fully make up for the lost mpg's -- i.e., even in this story E85 was an economic loser.)
Now I assume we may be able to analyze the similarities and differences after months of extensive participation in this forum and preparation and research that allows us to do so. But will my mother recognize the differences? Will she be able to come to the conclusion that E85 costs more to use even when the per gallon price is 30 or 40 cents cheaper than gasoline?
The stories, I assume, were vetted (not an entirely safe assumption) and deemed "accurate" for publication.
And, based on what I know, both stories are accurate -- one story, however might mislead (I assume, not its intention -- there's that word again) the reader to thinking "OK E85 gets lower mileage, but it costs less and it therefore must be good for my pocketbook, the economy and pollution." Some may further see it as a way to stick their finger in the eye of the Middle Eastern oil providers.
On the same day -- it was the best of times, it was the worst of times.
Wow, it really is getting more and more difficult to drill down to get from the story, to the information, to the data points, to the consequences (both intended and unintended.)
With careful reporting like this, E85 -- for a time -- may gain popular support. Eventually, until or unless something changes, one would assume folks will find what's inside the package doesn't quite match the promises made on the outside of the package. :surprise:
I do, from Elmhurst College (undergrad, Motto "There is parking on campus somewhere, when we find it we will let you know") and the University of Chicago (Graduate, motto "What? Not Another Nobel Prize?"). One of my professors at UC eventually won a Nobel prizes in Economics (The Nobel Memorial Prize in Economic Sciences). And FWIW I learned my economic theory in a sober state.
I am taking issue with your misuse of the term "free market"
Well a piece of advice, don't take issue with someone "misusing" a term you are yourself misusing.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Are you upset at Muslim Fundamentalists? Maybe you should have thought of that when the U.S. (and the rest of the anti-Soviets) created them in the first place.
May I suggest reading "A Peace to End All Peace" by David Fromkin. Which goes into pretty good detail on how the breaking up of the Otterman Empire at the end of WWI created the modern Middle East and Muslim Fundamentalists.
which is why I am in favor of those same forces paying to eliminate the Islamists
Yeah but Europe doesn't have the you know what to eliminate what they created almost 90 years ago.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
there has never been an economy guided purely by economic forces without any government control. Ours is the closest.
No Hong Kong was (and to some extent still is) the closest. It practically was with Government activity at a bare minimum. Of course they thrived despite being over crowded and having to natural resources (save people).
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
A "theme" -- what my wife calls the black and white theme -- that seems to have emerged appears here as we, in relatively limited posts, attempt to summarize and generalize on the subject at hand.
The theme I am suggesting that has emerged is that when we make our points we often present our thoughts "just so."
What then happens is we begin to chip away at the overall point the poster has made because one or several data points (or assumptions) that make up the overall message do not conform to "everyone's" definition(s).
My wife, an attorney, says "my job is to take what is black or white and make it gray."
The spirit of many of the postings here does appear to be that E85, when compared to gasoline, achieves lower MPG's, is currently more expensive to use on a total cost per tankful basis and is being subsidized by public funds.
Some posters, apparently diminishing in number, remain resolute and will respond either with "does not" or "so what, we need E85 even if it is more expensive and subsidized."
Some have found and many have seen cited the popular media takes on Ethanol (many appear to be now acknowledging the lower MPG's associated with E85) -- and these popular media articles generally conclude that Ethanol is a somewhat dubious and somewhat hopeful approach to (fill in the blank) problems associated with our "addiction to oil." Of course some writers (Bedard, in C&D) are blunt and simply say Ethanol is full of false promises.
Now we seem to have drifted somewhat into bickering over the definition of free market.
Broadly ("grayly") speaking the spirit of the poster's point(s) is unlikely to be changed by what appears to be the slight disagreement in the definition of free market.
The US is a free market. Period. Wait, wait, read on before you click reply.
In a black and white world, the US IS a free market.
The reality of the situation is that the US is as close to a free market, as most of us would accept the definition, as any in the world -- and possibly most free market in the world.
Why do we spend so many bytes on this, when the point, as far as I can tell is "moved" imperceptibly.
Here, as far as I can tell (and I actually do have a minor in economics, as if that means a hill of beans), is a definition that we "ought to agree" is the way it is here in the United States:
The United States, but not exclusive to the United States is what has been deemed a Free Market Economy; in a free market economy, the government generally plays a small or very small roll. Government occupies a referee-like position between business and labor, for instance. Yet, the government does not control business or labor. It is a totally separate entity. In a free market economy, business is largely (but not entirely) left to its own devices. Businesses organize and run themselves in the most profitable way.
Generally, but not exactly black or white, indeed with notable gray patches, the government is involved thusly, to:
- protect and preserve property rights
- encourage business to take on projects that will benefit the country
- preserve fair and free competition within the market
- reduce the problems of inflation and unemployment
- guarantee citizens a minimum standard of living
- protect consumers from unsafe or ineffective products
- protect the environment
- protect workers from abuse or unsafe working conditions
- provide important goods and services that private enterprise is unwilling or unable to produce
Are we, by any stretch, a Centrally Planned economy? Not us, the United States at its worst might be considered a Mixed Economy, but the mixture is decidedly not dominated by government controls.
For our discussion purposes, the US legitimaely "counts" as a free market economy.
I am interested in how we go about getting the message (or messages) out about E85. Ford's ads seem to me, for example, to be a tad misleading; my own Congresswoman has declared E85 will save you and me money, lower our energy costs, reduce our dependence upon foreign oil, make our whites whiter and be an economic boon to her constiuents of substantial proportions (BTW she is a Republican, as if party affiliation on this matters that much these days.)
The information and the stories printed and telecast are presenting -- when clear -- contradictory (sounding, at least) messages; and, mostly the messages are unclear.
Government occupies a referee-like position between business and labor,
I guess I'll agree that we have a much freer market than most but our government plays far more than a referee-like position. Every line in the tax code that grants a break for a certain type of purchase, business, behaviour, etc. is a manipulation of the market to some degree. Possibly the most extreme example is the home mortgage deduction. It has essentially put that segment of our economy on steroids at the expense of other industries. There is no invisible hand here and Adam Smith would definitely not approve.
Why do you think big business spends so much money sending lobbyists to wander the halls of Capitol Hill and in campaign contributions? If the government is a referee it seems to be one that can be bought.
Many of these points re: the free market and whether we should/shouldn't have one miss Alp's point.
The question isn't one of theory (at least not for the purposes of this discussion, anyway) but whether oil trades entirely within a free market and what that means to the future prospects of oil deliveries.
And the answer is that it does not. Whether or not the US has trade barriers, and irrespective of whether Greenspan likes or doesn't like Ayn Rand, the reality remains that much of the world's oil is controlled by dictatorships that are either unfriendly to US interests or else contain elements within them that could potentially become a lot unfriendlier.
The OPEC cartel should have been a wake-up call that a coordinated effort beyond our reach can create consequences that specifically victimize us.
Further, it should be obvious that if the worst case scenario were to arise, it would not be possible to simply start pumping large quantities of some alternative fuels, of any kind, as an immediate response to such a crisis, given the lack of infrastructure. It would take years to react, not just days or weeks, if such a thing was to materialize.
Those who engineered the OPEC cartel clearly could not have cared less whether their cartel insulted your free trade sensibilities, they did it anyway. And if some radical militant group comes to power in an oil rich country such as Saudi Arabia, they may not care much for it, either. If you want to save up for a rainy day, you begin when it's sunny, not when the floodwaters are rising.
The US, and most of the world, has put itself in a very vulnerable position when it comes to our dependence on foreign oil. No disagreement there. The time to act is now. Again I agree. Since this issue is of such importance we cannot afford costly missteps. In 10 years if the government has spent 10's of billions of dollars to increase our ethanol production to 15 billion gallons per year we will have squandered resources and be no better off than we are today. IMO, a costly misstep. The solution is simple. Accelerate the free market forces by rapidly and significantly raising the gas tax. Political suicide? Absolutely, so what? Our politicians send soldiers to die for ideals. They shouldn't be so gutless as to not risk their political careers for a worthwhile objective.
Accelerate the free market forces by rapidly and significantly raising the gas tax.
But that won't happen, so it's a moot point if the discussion is about realistic options. While I agree with you that an increased gas tax would be a wise option (reduce demand in the most direct fashion possible), it is highly unlikely to occur because of the political ramifications and likely voter backlash.
The reality of the US political system is that tax credits and deductions are the most common tools for influencing change. They are popular because they satisfy both Democrats (who push for these programs) and Republicans (who tend to avoid support for direct subsidy payments or tax increases), and therefore are politically expedient and safe.
You need to accept the realities of the system, and see that this current method of getting things done is the best that we've got. If you believe that alt fuels research needs to be conducted and related infrastructure expanded, then you need to support (or at least acquiesce to) the idea of tax credits because that's about the only tool that can be expected to be employed. The outcome isn't entirely desirable or efficient, but you won't see the feds do much else otherwise.
Subsidies create artificially low prices, which in turn encourages consumption. Since conservation will have to be part of the equation subsidizing fuel cost is counterproductive.
I do accept the reality of the system. The reality is that higher fuel taxes would be effective but not politically doable. The reality is that subsidized ethanol production is ineffective but politically doable. So both camps are destined to fail its just a matter of choosing which one you want to belong to. Maybe the fundamental reality is that effective solutions to difficult problems will, in general, require some public sacrifice. In our society that is not politically acceptable.
I'll agree to end our pointless bickering about whether the world energy market is a "free market." I'm not sure it's germaine to the discussion, anyway.
My position has also been mischaracterized as being "if some government programs are worthwhile, THIS program is worthwhile." I said no such thing. I did say that you can not state that THIS program is worthless based on SOME (or even most) government programs being worthless.
Regardless of whether the government ethanol efforts are a good idea, I am not sure that we know the truth about ethanol. I have not seen a study that actually does an apples to apples cost analysis for ethanol.
but it's hard to be cheaper than some stuff you just pull out of the ground
Pros -reduces combustion temperature and lowers NOx emissions -potentially affords some energy independence
Cons -does nothing to reduce CO2 emissions -not a viable gasoline replacement
I think the real test comes when the next gasoline crisis occurs. The bulk of the US refineries are in Texas and Louisiana. Should a hurricane disrupt output in those regions this year and ethanol is increased to the 10 % blend level and it successfully averts large price spikes and supply issues, then it will likely become a mainstay (subsidy or not). If the ethanol suppliers are not capable of increasing capacity to meet the challenge, it is a total waste of time and money and effort and subsidy efforts should be axed.
It is actually the University of Cincinatti. There are a bunch of universities in CA that use UC but with additional mnemonics UCLA, UCSB, UCSD, UC Berkeley etc. The University of Cincinatti has the UC title taken. Only one gets it officially.
Pros -reduces combustion temperature and lowers NOx emissions
Actually E85 has higher nitrogen oxide (NOx) and VOC emissions, which causes ozone depletion. It is debatable on CO2.
More cons than pros:
Additionally, the ethanol conversion process has negative impacts on both water and air. During the conversion process, 12 gallons of wastewater are produced per gallon of ethanol. The wastewater typically contains between 18,000 to 37,000 parts per million BOD, which measures the level of biodegradable organic compounds. This is 45 to 370 times stronger than municipal wastewater. Processing plants in Illinois, Indiana, Michigan, Minnesota and Wisconsin appear to have violated their volatile organic compounds (VOC) emissions allowances under the Clean Air Act by up to 1,000 times.
Please define what you mean by an apples to apples cost analysis for ethanol.
I'll try to find the article that discussed this. I alluded to it in an earlier post.
Some analyses of the cost to produce ethanol ignore the byproducts of the ethanol production process - and the sale of those byproducts should "offset" the costs of the production, so to speak.
Some analyses of the cost to produce ethanol do not include tilling the field, planting, etc.
I beleive the point of the article is that you really need to look at the study's assumptions to understand the $ numbers that are being discussed.
Generally I wouldn't care what it costs to produce a product, since (as a consumer) I only care what I have to pay for it. But since any discussion of ethanol involves a discussion of the government subsidy, I do want to better understand the costs.
I'm sorry - I can't find the article that I am referring to. I searched the most likely sources, but I've been out of town recently and may have read the article in a newspaper out of town. [frustrated]
and the sale of those byproducts should "offset" the costs of the production, so to speak.
In an accounting sense no they should not. Those byproducts should be allocated a portion of the cost of producing ethanol. How this is allocated is a matter of debate and many ways would be considered correct.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
These waste products that people keep talking about. Isn't this organic material that is currently being plowed back into the soil? If so, the idea that you could potentially be using these by-products to produce more ethanol will definitely have an environmental cost.
the article's point was that some analyses completely ignore certain by-products and certain costs. The question is, which ones should be in or out of the analysis. I assumed they were "all" in, but that is a bad assumption.
of course, it all depends on what question you ask.
The question "how many BTUs does it take to convert corn to a fuel you can burn in an automobile?" gets a different answer than "how many BTUs does it take to create, using corn, a fuel that you can burn in an automobile?"
the first analysis assumes you have grown the corn, the second would include the cost of growing the corn
the article's point was that some analyses completely ignore certain by-products and certain costs. The question is, which ones should be in or out of the analysis. I assumed they were "all" in, but that is a bad assumption.
And of course, these should be compared to the costs and energy needed for all of the other sources. It's not as if growing soybeans to produce biodiesel, or all of the drilling and exploration activity to getting oil out of the ground doesn't consume energy or consume.
The problem with the thread is the continual focus on the "bad" product, while completely ignoring the costs related to the "good" product. Perhaps the equipment that is used to plant, grow and harvest soybeans used to produce biodiesel runs on perpetual motion machines that consume no energy?
You seem to be missing my point. Some of the analyses do not include certain costs, at all. Some analyses do not include the cost of the corn seed, planting the corn, the equipment to work the fields, etc. etc.
some analyses do not include the by-products, the sale of which currently generates revenue
No question there is an allocation (or accounting) issue. But there is no allocation issue if those costs and revenues are completely ignored, which is often (always) done by people who have a particular agenda.
On a separate point, you can't compare one feedstock to another simply from the point of harvest (i.e. corn versus soy), and then reach a valid conclusion about which feedstock is better, as the energy costs to produce one feedstock (soy) to the point of harvest could be much higher than the feedstock to produce the other (corn)
in a free market, all we'd care about is the cost at the pump
but since we are making societal choices, and throwing government (your and my) money at the problem, we need a decent comparo so we can decide what the best bang is for our buck
but since we are making societal choices, and throwing government (your and my) money at the problem, we need a decent comparo so we can decide what the best bang is for our buck
Right. And one also has to consider the likelihood of adoption, and the likelihood of technology improvements and alternative biomass options that might improve the utility of these fuels over the medium- to long-term.
I got your point, you seem to be missing mine. Even if you include all these costs and the byproducts how do you allocate any and all costs among ethanol and the by products. So even if you include all costs and account for the by products different people (groups) will come up with different figures. Its pretty much the same principle that says a hollywood movie that takes in $125 million loses money even though it only cost $30 million to make.
in a free market, all we'd care about is the cost at the pump
In reality that is what it boils down to. Most people will only look at the pump. Those of us who analyze every little aspect of this are a very small minority.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Comments
Well, I am willing to listen to your solutions for the energy problems we face. Hopefully they don't raise the price of gas as the ethanol solution has done.
On the contrary almost everything is controlled by a free market. While we may attempt to control things through price controls, mandates, and other types of government interference the free market will work through it. Oft times in very unexpected ways.
I'd rather have some government interference than a belief in a fantasy.
Government interference has created some very lackluster results. the biggest fiasco of government interference was the great depression.
Do you guys really think ALL the readers of these forums are that naive and uninformed?
No but I really get a kick out of those here who think they know what makes an economy work. Tell me where did you get your degree in Economics?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Me: E85 is said to be able to substitute for gasoline.
You: Well it isn't, E85 is a near perfect substitute for Gasoline in FFV's only.
I am sorry, I meant only in FFV's from the get go, as the underlying hope appears to be that "all will be FFV's" (NOT MY HOPE, the implied hope of our representatives in government to read their newsletters on the subjects.)
I also suggested that Ford's GREEN FFV and Hybrid TV advertising would lead you to the possible conclusion that the FFV is in the group that achieves that. I, in no way, meant that I believed this was the case.
Sorry for the lack of clarity. :shades:
Is it possible that the artificial demand (for ethanol in E10) and the corresponding high prices for E85 will create an unnecessary backlash agains ethanol in general?
Speaking honestly and only for myself - from my own personal feelings, I have to say "yes".
If ethanol were not be mandated and it's use were going into E85 (and offered at a competitive price in those markets where it makes sense), I'd have no problem whatsoever with ethanol. But since it is mandated, it automatically gets a black mark in my book.
And I'm sure I'm not alone.
So, that is how you show respect for the other readers of this forum?
Just exactly how is there a free market in energy? The very existence of OPEC is proof enough that there is no free market.
The fact that the Bush Administration had secret meetings re energy policy is proof that there is no free market.
Entire energy industries are nationalized in some countries, which is further evidence of no free market.
You can't even buy a diesel car in California, again evidence of no free market.
There are tax incentives for this, tax incentives for that.
There is no "free market." There is a marketplace, but it is not a free market, as ANY economist envisions or discusses. The term "free market" has meaning, and it does NOT mean the marketplace that we are confronted with (wrt energy resources)
I am not saying that government intervention is always good, or that it is even EVER good (though I think we can agree that it is sometimes good, at least in the short run), but for you to expect us to bow down to your fantasy world free market is a bit too much.
We don't have an ENERGY problem. We may have a geopolitical problem, but we don't have an energy problem. Just what problem do you want to solve?\
Are you upset at Muslim Fundamentalists? Maybe you should have thought of that when the U.S. (and the rest of the anti-Soviets) created them in the first place.
I don't mind buying oil from Arabs, why do you?
Are you afraid we will run out of oil?
Again, I'm not sure what problem you have identified.
Bingo. And if some religious nutjobs decide that their interpretation of their faith warrants turning off the oil spigot, then there will be even less of a free market than there is now.
Anyone who thinks that we could react to a shutdown by building alt fuels plants and infrastructre in a matter of days or weeks is simply dreaming. The idea behind being prepared is to be able to react quickly if a nasty surprise occurs, rather than being held at gunpoint on our knees or being forced into a hot war in order to try to rescue ourselves.
The idea behind diversification is to reduce the likelihood of blackmail, and to have some countermeasures available if our worst fears are realized. The extra money that you spend now is an insurance policy for the future and to buffer the worst-case scenarios.
I don't know if I know what makes an economy work, it seems to work best though when it is more free rather than less.
I, for one, think virtually ALL of the readers of these forum are sophisticated and well-informed. I suspect some folks actually do have a degree or two and some of them are probably in econ.
I never underestimate the folks here -- mostly folks rise to the topic at hand; and, often they exceed my expectations.
From time to time we do seem to stall out or are forced by the sheer number of posts to revist and repeat.
For instance, I can go along for a day or two thinking that "everyone" agrees that a gallon of E85 will go about 70% as far as a gallon of gasoline (in an FFV) and someone will, out of the blue, drop in a post that seems to either dispute that or ignores it -- then the rest of us seem to swoop in and attempt to clarify this.
This stuff, this forum, is both educational and entertaining -- for many of us -- it is probably terribly boring for many others.
My degree, by the way, is from a little school in Ohio -- Miami University -- Oxford.
It is in history of hygiene: Hygiene through the Ages (just kidding.)
The market (even if it was a "free market") does not care about that. Only people care about that. The market is willing to have lots of disruption, death, etc. while private interests hash out the problem. The market does not care if this takes humdreds of years. People do care, since they want to live without such dislocations. The free market is a brutal mistress. Fair, but brutal.
:-)
just kidding
Why do people always trot out the BAD examples of government intervention. Why not the good ones? Without government intervention, we'd all be saluting Hitler's son. Without government intervention (public works) how many more people would have been ruined by the Depression? Sure, eventually the situation would have straightened itself out. Of course, had we let the market solve it, there's pretty much no question that we'd all be saluting Hitler's son today (or Hirohito's)
Government intervention needs to be done carefully, and sparingly. But it does have its place.
I think it's funny that people complain about how the US has done things wrt the economy, etc., and they want to make RADICAL changes, but these same people are adamant that the US is the greatest country on earth. Well, which is it? From where I sit, the US has done a pretty good job of things. And it's involved a LOT of government intervention, laws to protect worker safety, laws to protect clean air and water, laws to protect against child labor. Yeah, all this government intervention has really been terrible
:confuse:
Yes, it was. I'll try not to be so sarcastic in the future; it apparently leads to confusion.
"Of course, rorr's comment assumes a working free market, which is a fiction that apparently exists in his head."
Actually, the term 'working free market' is open to much interpretation. Your definition may vary from mine. So, rather than get bogged down in the minutia of what a 'working free market' is (your term), I'll simply say that I believe that as markets are MORE free from government intervention, they become more able to react quickly and plan ahead. The inverse also applies (meaning that the MORE the government intrudes itself on a problem, the slower the response and the less likely a real solution will be found). Yes, these are generalities. Yes, there are SOME situations were government is necessary (I'm no anarchist). But I think if one were to simply look for examples, I could find more examples of the private sector reacting quicker and more effectively than the 'gubmint'.
"I'd rather have some government interference than a belief in a fantasy."
Actually, you could have both. :P It's not unheard of.
"Leave ir to the anti-gubmint types to assume that the argument is (a) free market or (b) central planning of our travel plans."
Was my 'travel plan' comment a bit far fetched? Yes. Maybe I should have just said 'price controls' instead.
Hey you gave a big lecture in economics that is just plane silly, I was just wondering if there was a school that actually taught that.
Just exactly how is there a free market in energy? The very existence of OPEC is proof enough that there is no free market.
The fact that the Bush Administration had secret meetings re energy policy is proof that there is no free market.
There were no secrete energy meetings, those groups that claim there were and that they were locked out of the meetings were actually invited, they just refused to attend.
The very fact that OPEC only has limited ability to control the market shows that the free market is working. Many oil exporting countries do not belong to OPEC and many OPEC countries fight among themselves.
You can't even buy a diesel car in California, again evidence of no free market.
I am not saying that there is no government interference just that the free market will work its way around it. California and diesel engines are a perfect example of that. You cannot buy a new diesel in California but you can buy a used one (as long as certain conditions are ment such as the car having at least so many miles). There are people that live outside California that buy diesel cars, drive them around until they get the minimum amount of miles and sell them in California.
Again where is it that you got your degree in economics?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Yep, that's me.
Let me know when Iran pulls all their oil off the international market.
"I'm not willing to bet that your analysis of foreign policy precludes us from the need to be prepared."
To be prepared? Why not with a REAL SOLUTION?
Huh the market is people, people working together.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Not everybody wants to work together, or at least work with us. Let's recall the dark days of the OPEC crisis, the Iran hostage crisis and 9/11 before we start presuming that everyone wants to work with us just because we have a checkbook and a penchant for free market rhetoric.
because the bad ones far outweigh the good ones.
Without government intervention (public works) how many more people would have been ruined by the Depression?
It was our government that created the Depression.
I think it's funny that people complain about how the US has done things wrt the economy, etc., and they want to make RADICAL changes, but these same people are adamant that the US is the greatest country on earth. Well, which is it?
It can't be both? The best of almost anything can be improved.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I think that the Wahabi sect (of which OBL is a follower)was around in the 12th century long before the Soviet Union.
I don't mind buying oil from Arabs, why do you?
No problem. I think it best to use theirs and save ours, just have it close to production status.
Are you afraid we will run out of oil?
Not in our lifetime!
Again, I'm not sure what problem you have identified.
The one where the government mandates the use of a product (ethanol in this instance) that is of little use and cannot sustain itself in the market place without my taxes propping it up.
This whole ethanol issue bears a lot of similarity to the fuel cell hype of a five years ago. Initially everyone wanted to believe in its potential but then reality started to set in. Its refreshing to see that as the facts get scrutinized more and more people are shifting their position. And its not in favor of ethanol.
I love how these "secret meetings" with people in the energy sector are always used as an attack against our national energy policy. (most of which was never even implemented because it died in congress) If we're not careful, the Bush administration might also have "secret meetings" with doctors to formulate a health care policy.
You can't even buy a diesel car in California, again evidence of no free market.
California has a long history of regulating energy markets. I seem to recall rolling blackouts there a few years back.
Just exactly how is there a free market in energy? The very existence of OPEC is proof enough that there is no free market.
Entire energy industries are nationalized in some countries, which is further evidence of no free market.
Just because other countries manipulate their petroleum markets doesn't mean we should.
Getting back to ethanol, we now have this huge government mandate and subsidy for ethanol. Everyone under the sun is committing resources to research new ethanol production methods and adding ethanol production capacity. How many of those resources were diverted away from research into, and infastructure for, other possible alternative energy sources? If you're the head of the research department of a large energy company, what do you do if you can get a huge subsidy and guaranteed market for ethanol from the government?
He put me to sleep with his econ lectures on a nightly basis
I learned much of my economic theory at his knee, mostly in a beer-induced haze
Since you are the one giving the econ lecture, where did you get your degree?
I am not arguing that there are no "markets" I am taking issue with your misuse of the term "free market"
of course that's true, since the government does not interfere with every aspect of the market (whereas, by definition, the private sector is in every aspect of the market)
I am not anti-private enterprise. But to dismiss a government effort simply because lots of government efforts are stupid, is not good logic. You have to analyze each program to determine if it should go forward. There are plenty of examples of good government action. And there are also PLENTY of examples where private enterprise, in the absence of any government action, completely bolloxed things up, including causing the deaths of innocent people, etc. etc.
I'm pretty certain that none of you could tolerate an economy guided by the invisible hand.
It's a rather academic argument, however, since there has never been an economy guided by simply the invisible hand in any time in written history.
but you guys can continue to flog the government and pat yourselves on the back for how you read Ayn Rand. But you are dreaming, so how about we get back to reality?
Gagrice: I think that the Wahabi sect (of which OBL is a follower)was around in the 12th century long before the Soviet Union.
The fact is, the Wahabi sect had absolutely NO politcial power or ability to accomplish anything of any consequence to you or I until AFTER the anti-Soviet forces trained it and armed it. It was the anti-Soviet forces that opened this Pandora's Box, plain and simple. (which is why I am in favor of those same forces paying to eliminate the Islamists)
But since that is not the problem that concerns you, I am happy to let the conversation get back to government subsidies. I thought the problem that you were concerned with had to do with energy independence from unfriendly states.
I do agree with energy flexibility and encouraging alternate energies and ways to conserve. Hell, we subsidize the nuke industry, why not the solar industry.
If there were only an invisible hand, does snake think nuke power would exist?
We are on the same page now. Also Saddam during the Iran & Iraq war was our man. If you get a chance read the Robert Kaplan book "Soldiers of God (with the Mujahidin in Afghanistan). OBL was kind of late to that Soviet war. We did arm him though.
I have no problem with Ethanol as fuel. I think spending money to come up with a system that is energy positive is the proper direction. If we can make the stuff from old gym shoes or whatever. I am against making it from corn. It is all wrong for America. It is a dead-end street that we have been down before more than once and wasted resources in the process. Even Brazil making it from sugar cane is a losing proposition. They got dumped on as well. New generation needs a new lesson I guess.
but you guys can continue to flog the government and pat yourselves on the back for how you read Ayn Rand. But you are dreaming, so how about we get back to reality?
No, there has never been an economy guided purely by economic forces without any government control. Ours is the closest. It is also the most prosperous economy ever. In the last century, many nations attempted to have planned economies. They all failed.
I am not anti-private enterprise. But to dismiss a government effort simply because lots of government efforts are stupid, is not good logic. You have to analyze each program to determine if it should go forward. There are plenty of examples of good government action. And there are also PLENTY of examples where private enterprise, in the absence of any government action, completely bolloxed things up, including causing the deaths of innocent people, etc. etc.
There are many things the government is better at, and should be regulating. They're listed here. Creating economic demand through mandate and subsidy isn't one of them.
I agree. Its equally bad logic to defend a government effort by stating that they are occasionally worthwhile. Is pursuing ethanol production justified when the costs and benefits are weighed against each other? It seems to me that every objective article I read on the subject says no. So the only conclusion I can draw is that the government has a hidden, political agenda. When this is the case I think the odds of them accomplishing something worthwhile are greatly diminished.
BTW, you cited a friend that became an assistant to Greenspan as being a big influence on your economic beliefs. I could be wrong but I suspect that Greenspan believes strongly in a lot of Ayn Rand's philosophies.
Both media outlets (one a newspaper from Nebraska the other a national weekly newsmagazine) agreed that E85 requires the user to accept a relatively stiff miles per gallon (miles between fillups) penalty.
One publication said the cost of E85 exceeded the cost of gasoline, the other publication said the cost was lower (and based ONLY on what I have learned here, I could calculate that the lower cost did not fully make up for the lost mpg's -- i.e., even in this story E85 was an economic loser.)
Now I assume we may be able to analyze the similarities and differences after months of extensive participation in this forum and preparation and research that allows us to do so. But will my mother recognize the differences? Will she be able to come to the conclusion that E85 costs more to use even when the per gallon price is 30 or 40 cents cheaper than gasoline?
The stories, I assume, were vetted (not an entirely safe assumption) and deemed "accurate" for publication.
And, based on what I know, both stories are accurate -- one story, however might mislead (I assume, not its intention -- there's that word again) the reader to thinking "OK E85 gets lower mileage, but it costs less and it therefore must be good for my pocketbook, the economy and pollution." Some may further see it as a way to stick their finger in the eye of the Middle Eastern oil providers.
On the same day -- it was the best of times, it was the worst of times.
Wow, it really is getting more and more difficult to drill down to get from the story, to the information, to the data points, to the consequences (both intended and unintended.)
With careful reporting like this, E85 -- for a time -- may gain popular support. Eventually, until or unless something changes, one would assume folks will find what's inside the package doesn't quite match the promises made on the outside of the package. :surprise:
I do, from Elmhurst College (undergrad, Motto "There is parking on campus somewhere, when we find it we will let you know") and the University of Chicago (Graduate, motto "What? Not Another Nobel Prize?"). One of my professors at UC eventually won a Nobel prizes in Economics (The Nobel Memorial Prize in Economic Sciences). And FWIW I learned my economic theory in a sober state.
I am taking issue with your misuse of the term "free market"
Well a piece of advice, don't take issue with someone "misusing" a term you are yourself misusing.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
May I suggest reading "A Peace to End All Peace" by David Fromkin. Which goes into pretty good detail on how the breaking up of the Otterman Empire at the end of WWI created the modern Middle East and Muslim Fundamentalists.
which is why I am in favor of those same forces paying to eliminate the Islamists
Yeah but Europe doesn't have the you know what to eliminate what they created almost 90 years ago.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
No Hong Kong was (and to some extent still is) the closest. It practically was with Government activity at a bare minimum. Of course they thrived despite being over crowded and having to natural resources (save people).
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The theme I am suggesting that has emerged is that when we make our points we often present our thoughts "just so."
What then happens is we begin to chip away at the overall point the poster has made because one or several data points (or assumptions) that make up the overall message do not conform to "everyone's" definition(s).
My wife, an attorney, says "my job is to take what is black or white and make it gray."
The spirit of many of the postings here does appear to be that E85, when compared to gasoline, achieves lower MPG's, is currently more expensive to use on a total cost per tankful basis and is being subsidized by public funds.
Some posters, apparently diminishing in number, remain resolute and will respond either with "does not" or "so what, we need E85 even if it is more expensive and subsidized."
Some have found and many have seen cited the popular media takes on Ethanol (many appear to be now acknowledging the lower MPG's associated with E85) -- and these popular media articles generally conclude that Ethanol is a somewhat dubious and somewhat hopeful approach to (fill in the blank) problems associated with our "addiction to oil." Of course some writers (Bedard, in C&D) are blunt and simply say Ethanol is full of false promises.
Now we seem to have drifted somewhat into bickering over the definition of free market.
Broadly ("grayly") speaking the spirit of the poster's point(s) is unlikely to be changed by what appears to be the slight disagreement in the definition of free market.
The US is a free market. Period. Wait, wait, read on before you click reply.
In a black and white world, the US IS a free market.
The reality of the situation is that the US is as close to a free market, as most of us would accept the definition, as any in the world -- and possibly most free market in the world.
Why do we spend so many bytes on this, when the point, as far as I can tell is "moved" imperceptibly.
Here, as far as I can tell (and I actually do have a minor in economics, as if that means a hill of beans), is a definition that we "ought to agree" is the way it is here in the United States:
The United States, but not exclusive to the United States is what has been deemed a Free Market Economy; in a free market economy, the government generally plays a small or very small roll. Government occupies a referee-like position between business and labor, for instance. Yet, the government does not control business or labor. It is a totally separate entity. In a free market economy, business is largely (but not entirely) left to its own devices. Businesses organize and run themselves in the most profitable way.
Generally, but not exactly black or white, indeed with notable gray patches, the government is involved thusly, to:
- protect and preserve property rights
- encourage business to take on projects that will benefit the country
- preserve fair and free competition within the market
- reduce the problems of inflation and unemployment
- guarantee citizens a minimum standard of living
- protect consumers from unsafe or ineffective products
- protect the environment
- protect workers from abuse or unsafe working conditions
- provide important goods and services that private enterprise is unwilling or unable to produce
Are we, by any stretch, a Centrally Planned economy? Not us, the United States at its worst might be considered a Mixed Economy, but the mixture is decidedly not dominated by government controls.
For our discussion purposes, the US legitimaely "counts" as a free market economy.
Here is some more discussion of the subject:
"Definition of Free Market Economy" - Your Guide to Economics
I am interested in how we go about getting the message (or messages) out about E85. Ford's ads seem to me, for example, to be a tad misleading; my own Congresswoman has declared E85 will save you and me money, lower our energy costs, reduce our dependence upon foreign oil, make our whites whiter and be an economic boon to her constiuents of substantial proportions (BTW she is a Republican, as if party affiliation on this matters that much these days.)
The information and the stories printed and telecast are presenting -- when clear -- contradictory (sounding, at least) messages; and, mostly the messages are unclear.
Is this anyway to run a railroad? :confuse:
I guess I'll agree that we have a much freer market than most but our government plays far more than a referee-like position. Every line in the tax code that grants a break for a certain type of purchase, business, behaviour, etc. is a manipulation of the market to some degree. Possibly the most extreme example is the home mortgage deduction. It has essentially put that segment of our economy on steroids at the expense of other industries. There is no invisible hand here and Adam Smith would definitely not approve.
Why do you think big business spends so much money sending lobbyists to wander the halls of Capitol Hill and in campaign contributions? If the government is a referee it seems to be one that can be bought.
The question isn't one of theory (at least not for the purposes of this discussion, anyway) but whether oil trades entirely within a free market and what that means to the future prospects of oil deliveries.
And the answer is that it does not. Whether or not the US has trade barriers, and irrespective of whether Greenspan likes or doesn't like Ayn Rand, the reality remains that much of the world's oil is controlled by dictatorships that are either unfriendly to US interests or else contain elements within them that could potentially become a lot unfriendlier.
The OPEC cartel should have been a wake-up call that a coordinated effort beyond our reach can create consequences that specifically victimize us.
Further, it should be obvious that if the worst case scenario were to arise, it would not be possible to simply start pumping large quantities of some alternative fuels, of any kind, as an immediate response to such a crisis, given the lack of infrastructure. It would take years to react, not just days or weeks, if such a thing was to materialize.
Those who engineered the OPEC cartel clearly could not have cared less whether their cartel insulted your free trade sensibilities, they did it anyway. And if some radical militant group comes to power in an oil rich country such as Saudi Arabia, they may not care much for it, either. If you want to save up for a rainy day, you begin when it's sunny, not when the floodwaters are rising.
But that won't happen, so it's a moot point if the discussion is about realistic options. While I agree with you that an increased gas tax would be a wise option (reduce demand in the most direct fashion possible), it is highly unlikely to occur because of the political ramifications and likely voter backlash.
The reality of the US political system is that tax credits and deductions are the most common tools for influencing change. They are popular because they satisfy both Democrats (who push for these programs) and Republicans (who tend to avoid support for direct subsidy payments or tax increases), and therefore are politically expedient and safe.
You need to accept the realities of the system, and see that this current method of getting things done is the best that we've got. If you believe that alt fuels research needs to be conducted and related infrastructure expanded, then you need to support (or at least acquiesce to) the idea of tax credits because that's about the only tool that can be expected to be employed. The outcome isn't entirely desirable or efficient, but you won't see the feds do much else otherwise.
I do accept the reality of the system. The reality is that higher fuel taxes would be effective but not politically doable. The reality is that subsidized ethanol production is ineffective but politically doable. So both camps are destined to fail its just a matter of choosing which one you want to belong to. Maybe the fundamental reality is that effective solutions to difficult problems will, in general, require some public sacrifice. In our society that is not politically acceptable.
I'll agree to end our pointless bickering about whether the world energy market is a "free market." I'm not sure it's germaine to the discussion, anyway.
My position has also been mischaracterized as being "if some government programs are worthwhile, THIS program is worthwhile." I said no such thing. I did say that you can not state that THIS program is worthless based on SOME (or even most) government programs being worthless.
Regardless of whether the government ethanol efforts are a good idea, I am not sure that we know the truth about ethanol. I have not seen a study that actually does an apples to apples cost analysis for ethanol.
but it's hard to be cheaper than some stuff you just pull out of the ground
-reduces combustion temperature and lowers NOx emissions
-potentially affords some energy independence
Cons
-does nothing to reduce CO2 emissions
-not a viable gasoline replacement
I think the real test comes when the next gasoline crisis occurs. The bulk of the US refineries are in Texas and Louisiana. Should a hurricane disrupt output in those regions this year and ethanol is increased to the 10 % blend level and it successfully averts large price spikes and supply issues, then it will likely become a mainstay (subsidy or not). If the ethanol suppliers are not capable of increasing capacity to meet the challenge, it is a total waste of time and money and effort and subsidy efforts should be axed.
It is actually the University of Cincinatti. There are a bunch of universities in CA that use UC but with additional mnemonics UCLA, UCSB, UCSD, UC Berkeley etc. The University of Cincinatti has the UC title taken. Only one gets it officially.
http://www.uc.edu/
UC is University of Chicago.
I have not seen a study that actually does an apples to apples cost analysis for ethanol.
Please define what you mean by an apples to apples cost analysis for ethanol.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
-reduces combustion temperature and lowers NOx emissions
Actually E85 has higher nitrogen oxide (NOx) and VOC emissions, which causes ozone depletion. It is debatable on CO2.
More cons than pros:
Additionally, the ethanol conversion process has negative impacts on both water and air. During the conversion process, 12 gallons of wastewater are produced per gallon of ethanol. The wastewater typically contains between 18,000 to 37,000 parts per million BOD, which measures the level of biodegradable organic compounds. This is 45 to 370 times stronger than municipal wastewater. Processing plants in Illinois, Indiana, Michigan, Minnesota and Wisconsin appear to have violated their volatile organic compounds (VOC) emissions allowances under the Clean Air Act by up to 1,000 times.
I'll try to find the article that discussed this. I alluded to it in an earlier post.
Some analyses of the cost to produce ethanol ignore the byproducts of the ethanol production process - and the sale of those byproducts should "offset" the costs of the production, so to speak.
Some analyses of the cost to produce ethanol do not include tilling the field, planting, etc.
I beleive the point of the article is that you really need to look at the study's assumptions to understand the $ numbers that are being discussed.
Generally I wouldn't care what it costs to produce a product, since (as a consumer) I only care what I have to pay for it. But since any discussion of ethanol involves a discussion of the government subsidy, I do want to better understand the costs.
I'm sorry - I can't find the article that I am referring to. I searched the most likely sources, but I've been out of town recently and may have read the article in a newspaper out of town. [frustrated]
In an accounting sense no they should not. Those byproducts should be allocated a portion of the cost of producing ethanol. How this is allocated is a matter of debate and many ways would be considered correct.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
not waste products, but by-products (I think corn mash was one)
I wish I could find that dang article
:-)
the article's point was that some analyses completely ignore certain by-products and certain costs. The question is, which ones should be in or out of the analysis. I assumed they were "all" in, but that is a bad assumption.
of course, it all depends on what question you ask.
The question "how many BTUs does it take to convert corn to a fuel you can burn in an automobile?" gets a different answer than "how many BTUs does it take to create, using corn, a fuel that you can burn in an automobile?"
the first analysis assumes you have grown the corn, the second would include the cost of growing the corn
just examples
And of course, these should be compared to the costs and energy needed for all of the other sources. It's not as if growing soybeans to produce biodiesel, or all of the drilling and exploration activity to getting oil out of the ground doesn't consume energy or consume.
The problem with the thread is the continual focus on the "bad" product, while completely ignoring the costs related to the "good" product. Perhaps the equipment that is used to plant, grow and harvest soybeans used to produce biodiesel runs on perpetual motion machines that consume no energy?
The question is how do you allocate those costs.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
You seem to be missing my point. Some of the analyses do not include certain costs, at all. Some analyses do not include the cost of the corn seed, planting the corn, the equipment to work the fields, etc. etc.
some analyses do not include the by-products, the sale of which currently generates revenue
No question there is an allocation (or accounting) issue. But there is no allocation issue if those costs and revenues are completely ignored, which is often (always) done by people who have a particular agenda.
On a separate point, you can't compare one feedstock to another simply from the point of harvest (i.e. corn versus soy), and then reach a valid conclusion about which feedstock is better, as the energy costs to produce one feedstock (soy) to the point of harvest could be much higher than the feedstock to produce the other (corn)
in a free market, all we'd care about is the cost at the pump
but since we are making societal choices, and throwing government (your and my) money at the problem, we need a decent comparo so we can decide what the best bang is for our buck
Right. And one also has to consider the likelihood of adoption, and the likelihood of technology improvements and alternative biomass options that might improve the utility of these fuels over the medium- to long-term.
I got your point, you seem to be missing mine. Even if you include all these costs and the byproducts how do you allocate any and all costs among ethanol and the by products. So even if you include all costs and account for the by products different people (groups) will come up with different figures. Its pretty much the same principle that says a hollywood movie that takes in $125 million loses money even though it only cost $30 million to make.
in a free market, all we'd care about is the cost at the pump
In reality that is what it boils down to. Most people will only look at the pump. Those of us who analyze every little aspect of this are a very small minority.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D