Free Markets – Blue Ocean Light

Climatechangists are Deniers

Climate Change is a state-sponsored religion, which denies alternative thought and denies ideas for creative solutions.

My news feed said that the weather across the Eastern United States is going to be cold this week. I took the bait and clicked on the link. Sure enough, the first two words of the story were Climate Change. Because I like pain, I entered those two words in a Google search. The top 10 headlines were about negative, apocalyptic consequences. No positive, optimistic interpretations. Not even a challenge to the incumbent thinking about this topic. Climate Change is a religion – and not one in which we may freely participate or freely criticize. It is a state-sponsored religion, and we are expected to follow its commandments unquestioningly.

Heretics, like me, do not necessarily disagree that the climate is changing. Without reading a single word of any UN report or open letter from the Union of Concerned Scientists, my natural instinct, my assumption, would be that the climate is changing. There is a much greater chance that the climate is changing than that it is staying exactly the same. The question is whether governments, or NGOs, should, or can, do anything about it. I think not. But this view is not tolerated. It is shouted down. The consensus is that the Earth is warming, and collective action must be taken, and those who don’t agree must be ignored and insulted.

My daughter asked why we even believe that global warming would necessarily be bad. Good question. If she ever asks her classmates, or any group of typically informed people, I just hope she is ready for the religious-style assault that will come her way. Her question is worth considering. The forecast is for flooded coastal areas, caused by rising oceans, caused by melting polar icecaps. Sounds bad. Let’s assume that will actually happen if the icecaps don’t stop melting. And let’s assume that on balance the world’s ice is indeed melting – meaning that every year, more water turns into ice than ice into water. Again – not hard to believe. What would be hard to believe is that the frozen to non-frozen water ratio is deadlocked and unchanging. So premise accepted. The earth is warming. No deniers here.

Back to my daughter’s question. Why would it be bad? Or, maybe a slight variation on her question. Would anything good come of it? Yes, probably. Can’t know for sure, but if I had to predict one way or another, I would predict that good would come of a warming planet – along with the bad. We might produce more food based on longer growing seasons. Maybe there would be more local sourcing, and less fossil fuel spent on planes and ships, because bananas and pineapples could be grown in Iowa. We might find that warmer weather makes for easier living than colder weather – less snow to shovel. Maybe something good even comes of the flooded coastal cities. Great new cities might be born to replace the old. This has happened before. What a tragedy it would be if future generations were denied the opportunity to build great cities. And maybe the architects of the future would design buildings that can withstand flooding, catastrophic storms, rising temperatures, and any other consequence of climate change. Maybe there would be floating cities. Imagine! Almost sounds exciting.

But, my girl, we are not encouraged to imagine when it comes to climate change. (At least not freely. Climate-changism devotees have imagined that climate change is responsible for racism and other social concerns.) We are expected only to self-indoctrinate, evangelize, and join the crusade to prevent end times. The crusade’s objective has been defined. The solutions are all derivatives of the Green New Deal, proposed legislation in the U.S. that would essentially eliminate the use of fossil fuels within 12 years. If we listen carefully, we can discern voices in the wilderness (like that of former Greenpeace activist Patrick Moore), who advise us that such a course would lead to mass starvation and death. Maybe that small group of contrarians are the ones who are wrong. But we will never truly have the debate. The momentum is strongly in favor of government and inter-government led solutions which all propose to save the planet by reversing the warming trend through controlling how and what people consume. So not only do they assume that climate change is a problem with no upside, but that there is only one way to prepare against it – and this one way, of course, is via coercion – on a scale never before seen on this planet. The religion of Climatechangism truly is the path to a one world government.

Here is another thought. If Climatechangism is not a religion, but just a well-intentioned movement that encourages people to prepare for an inevitable disaster, then we just each need to do what is best for ourselves, our families, our customers (if we have them). For example, if my home were along the waterfront, or in a place which is at, or below, sea-level, then I should sell my house and move to higher ground. If I am a real estate investor who owns buildings in Manhattan, San Francisco, Chicago, or any other city on the water, then I should consider divesting myself of those assets to lower my risk. If I run a business that depends on shipping, I should think about how earth’s increased water coverage will impact the way I do business. If I run a charity that is concerned about feeding impoverished people in areas where increased droughts will wipe out crops, then I should scratch my head, pull together a team of the most creative problem solvers I can find and say, “With all this extra water we are going to have, there must be a way to solve this drought problem.”

Even if the Climatechangists are genuine (meaning, their goal is truly to save the planet – not to rule it), a local, volunteer-based approach is much easier, and much more likely to achieve goals, than the coercive, global-scale approach which has been preferred so far. (They want every person in the world to believe only that climate change is bad, and believe there is only a single solution. Everybody. In the world. Then they want every person to change their behavior to enact the solution. Every person. All 8 billion people. Think about that.)

Meantime, believing that Climatechangism is something other than an organized movement, with a goal no more noble than power, control, and subjugation, is difficult when those who lead it continually deny the opportunity for debate and deny the power of imagination.

For my part, I am glad not to be a Climatechangist. I feel free. I feel able to think, even a little excited about what the world could look like when our best and brightest develop new ways to live in an inevitably changing world. I just hope that our best and brightest are not denied their chance.

Minimum Wage Gamesmanship and a Useful Idiot

On November 1st, Amazon’s voluntary $15 an hour minimum wage takes effect. A $15/hour minimum wage actually can help them. They can more easily afford it than their competition. By voluntarily adopting a $15/hour minimum wage, Amazon CEO, Jeff Bezos increases pressure on competitors to do the same, and further emboldens the likes of Senator Bernie Sanders to mandate the higher minimum wage through legislation – potentially forcing other retailers to take on extra costs before they are ready.

So who is Amazon’s competition? Walmart. Like Amazon, Walmart has the financial strength to absorb an increase in labor costs, better than most. (In fact they just increased their own self-imposed minimum wage to $11/hour in January.) But not better than Amazon. Hourly wage labor is a bigger expense for Walmart than for Amazon. Walmart as of 2018, has almost 4 times the number of employees as Amazon (2.1 million to .56 million, although, of course, not all are hourly.)

Amazon’s comparative advantage in hourly wage labor cost is likely to grow stronger despite the voluntary wage increase. As they continue to automate processes, from robotic fulfillment and sorting to driverless delivery trucks to drones, their reliance on low skilled hourly labor, as a percentage of overall costs will fall. Walmart meanwhile will also certainly leverage technology to reduce reliance on such labor, but they will not beat Amazon at this game.

It is possible, but seems unlikely, that Amazon’s self inflicted wage increase is not, at least in part, a swipe at Walmart. Why not do it? Even if the move does not ultimately force Walmart to raise wages, or if it does, and Walmart handles it, the tactic is worth a try. There is virtually no downside. And there is upside – in the form of good press, and political favoritism – no matter what. And Walmart, at the very minimum, now must deal with this to some degree, in some manner – whether paying lobbyists to fight back against the useful idiot, Bernie Sanders, or paying more money to their employees. Maybe this is just a distraction, maybe it’s a significant, unplanned cost. Either way, it’s an obvious, easy play by Amazon.

Meantime, whether Bernie Sanders is a co-conspirator or a indeed useful idiot, he is carrying water for exactly the type of behemoth corporation he says is the problem.

Net Neutrality

This morning, on the radio, during the 5:30 news update, the anchor stated that FCC Chairman Ajit Pai mocked supporters of (so-called) net neutrality by saying, don’t worry, the world is not going to end. Interesting word choice: mock. The negative reaction to the FCC’s decision has been monolithic incredulity and feigned outrage. It all seems like melodrama to me. I don’t know that Mr. Pai was mocking anyone, but suppose he was. He can hardly be blamed. The self-important people criticizing him are embarrassing themselves. It’s a blow to free speech? Consumers will have to pay more? They are just avoiding reality. They sound outside of reality. In a net neutrality world, say they, all data is treated equally. As if data have natural rights that are being oppressed.

There was no net neutrality rule until 2015 but a visitor from another planet, or apparently significant masses of the people who already live here, would never know that. Somehow, from 1995 to 2015, internet speeds did nothing but increase and prices for access fell. Hey you people over 30 — remember the early dial-up days? Remember losing your 256K connection when someone called your landline phone? And you had to pay for that! Somehow, without net neutrality rules to protect us, that scenario evolved into anyone older than 10 watching high-def video on a palm-sized smart phone, while flying in an airplane.

Pay attention to who is really advocating for net neutrality. Netflix, Google, Amazon, Facebook. Know why? Because net neutrality shifts their costs to others who are forced to pick up the tab. Here is what happens. Netflix is in the video entertainment business. They stream video over the internet (mass volumes of high definition data). Comcast Cable is one of the major networks over which Netflix videos stream. Comcast also happens to be in the video entertainment business. There is a good chance that Comcast would not want another company using their network to offer an alternative to their own video entertainment service — unless…maybe…the direct competitor paid Comcast for the use of the Comcast network. But this is precisely what net neutrality forbids. Net neutrality struts around saying all data shall be treated equally. That Sounds fair, welcoming, American, and we consumers feel good about this because we think that means our e-mails, tweets, and photo uploads will not be bullied around by YouTube video traffic and Amazon transactions. But what it really means is that Comcast, AT&T and Verizon are not allowed to charge premium dollars to Netflix, Google, and Amazon when the latter three companies want to soak up bandwidth from the former three without paying anything extra. From 2015 to now, the FCC said, Mr. Internet Service Provider, you must allow these other companies — your competitors in some cases — use your assets without being fully compensated. Net neutrality is billion dollar companies fighting with other billion dollar companies, and Uncle Sam picking sides.

Ironically, the result of net neutrality can only be the exact opposite of what it ostensibly promises (protecting consumers from high prices and bad service). When a company has an asset from which they cannot maximize profits, their investment in that asset will slow or cease. In this case, the network companies were not allowed to maximize profits on traffic they were forced to carry. Check this, but I’m willing to bet that investment in their networks has been down since 2015. And going forward, my bet is network investment will increase. The primary sponsors for network investment should have been (and maybe will be) these video streaming tech giants. If Comcast or AT&T could have said no, or it’s going to cost you, then Netflix, et al. would quite possibly have dumped millions or billions into somebody’s network, creating more capacity, to ensure their customers – consumers – would have easy access to their products. Yes, consumers. The most likely outcome of the net neutrality repeal is more network capacity meaning higher speeds and even cheaper network access for… drum roll please… Consumers!

Finally, a quick word on the process by which net neutrality was enacted. There was no legislative process. There was no bill written up and voted on by the House and the Senate. There was no discussion and debate. There was no constitutional process. It was the voting result of 5 FCC bureaucrats. Three people just decided one day. This alone justifies repeal.

The failure of the pro net neutrality argument (as with so many interventionist arguments) is that it assumes one variable, internet capacity in this case, will remain static, while others, like consumer demand and internet-delivered services, will grow. There is no basis for this type of purely arbitrary conclusion. It is the output of children’s minds. (Sorry – don’t mean to mock.)