Showing posts with label central planning. Show all posts
Showing posts with label central planning. Show all posts

Monday, January 23, 2012

The Happy Fantasy

A common mantra that I’ve heard from my left-leaning friends is that a) everyone should be able to earn a “decent” living doing whatever they enjoy and b) that everyone deserves to have a “decent” car, house, clothes, vacation, etc.  Blame touchy-feely high school guidance counselors for the first fallacy, which has directly led to the disillusioned masses of psychology, fine arts and literature majors populating the Occupy Wall Street movement.

The hard facts of life are that not everyone can do what they enjoy most for a living.  Otherwise there would be far more rappers, football players and fly fishermen than we would know what to do with.  Meanwhile, sewers would go uninspected, crime scenes would go uncleaned and garbage would collect by curbside.  Seriously.  If it weren’t for an appealing paycheck (or a lack of other opportunities), who would wake up in the morning and say “Gee, I really want to muck through people’s feces today”?  Similarly, jobs that are stepping stones to bigger and better things would also be avoided entirely.  Intern?  Nope, I want to be CEO.  Apprentice?  Just let me rig that wiring.  Draftsman?  I’m ready to build skyscrapers.  If you enjoy your work, consider it a bonus.  Otherwise, many of us go to work each day at a job we don’t mind doing (too much) so that we can do the things we enjoy (such as fly fishing).

The second fallacy lies in the varying standards of what constitutes “decent.”  If you ask ten people to describe a decent car, you’re bound to get twelve answers.  And there are folks who are willing to trade a less than decent car in exchange for, say, vacationing in France every year.  As any marketing major will tell you, tastes vary widely across the spectrum, because value (like beauty) is truly in the eye of the beholder.  Systems that try to meet everyone’s needs with a one-size-fits-all approach generally do it badly, leaving no one satisfied.  As the saying goes Comrade, it comes in two sizes: too big or too small.

The endless summer, where everyone lives in a mansion and gets paid to surf and look good, exists only in imaginations and fantasies.


 

Friday, September 30, 2011

Successful Subsidized Energy? Not so fast...

The news coming out of the German energy market is a fascinating case study but it follows the typical pattern. Central planners decide they want to influence the supply and demand by manipulating producers and consumers. They are successful in that they get more of what they subsidize and less of what they penalize. However, they also have unintended consequences. In this case it is surpluses and shortages, reminiscent of the gas shortages of the 70s in the US and numerous other examples in the USSR. Laws are in place preventing the individuals from making adjustments to address the imbalance, in this case compulsory preference for the intermittent energy sources (solar and wind). Consumers still need a reliable source of energy that can pick up the slack when solar and wind are unavailable, but government interference is discouraging investing in conventional plants. Since the people are bound by law from fixing the problem it falls to the central planners to develop a solution. Their answer is as typical as it is ironic; subsidize coal plants.

But wait! Consumers are getting paid to use energy! They're getting it for free, right? Well not exactly. The subsidies aren't free; they are simply obfuscated by the tax code. Furthermore they represent a compulsory cost; what people pay to subsidize the energy industry is disassociated from their purchasing choices or their actual energy use.

The definition of insanity is doing the same things and expecting different results. Central planning consistently results in shortages and excesses, increased collective costs borne by the taxpayer, disenfranchising of the consumer and empowerment of the centralized planners and their crony capitalist / special interest lackeys. This latest example from Germany is no exception.

http://www.bloomberg.com/news/2011-09-29/utilities-giving-away-power-as-wind-sun-flood-european-grid.html
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