I used to live in the small mountain town of Durango, Colorado. I'm clearly too young to have lived in the 60's but if Hunter S. Thompson's retrospective account
This progressive exuberance brings forth passion and conviction about a very progressive, environmentally friendly, socially conscious agenda for politics and policy on all levels -- local, county, state, federal, and even transnational. What struck me about this passion and conviction was it was so often directed toward solutions and programs that failed to actually substantially address the problem it was targeted toward, and in a lot of cases it even was counterproductive; but at the end of the day, they felt like they were doing something, and doing something was better than doing nothing like standing around and pointing out that their warm and fuzzy feeling wasn't sufficient to overthrow the laws of physics, economics, or human nature.
Julian Sanchez pithily termed this phenomenon the Care Bear Stare which quickly caught on as the perfect cultural reference to encapsulate this phenomenon so often bemused among the libertarian community. Megan McArdle latched onto it as the perfect term for her observation:
It is astonishing how often I have arguments about environmental issues, and a few others, in which I state a belief that the political and economic realities mean that some pet solution won't happen, and am rewarded with an angry/exasperated "Well, then how do you plan to fix the problem?" It is as if they believed that to state a problem, is also to imply a solution.
As I said, it's not so much the need to solve the problem as it is to feel like you are part of the solution, regardless of whether any headway is made. Symbolic gestures with no substantive results other than a sense of self-satisfaction are only non-substantive when the warm and fuzzy feeling is threatened by the cold and harsh reality.
When I lived in Durango, every morning the network operations team would take a break to walk together to our favorite breakfast haunt for bagels and coffee, and each morning I would get a paper cup filled with coffee. A progressive friend scoffed at my daily paper cup consumption, suggesting I didn't care about the environment. If I did care, I'd use a reusable mug like her.
What she's focusing on is the waste. However, she's not taking into account the embodied energy of the materials. Certainly it takes energy to raise and fell trees, to process the cup, and to let it degrade in the waste system. But it also takes energy to fire a kiln to bake a ceramic mug like hers. In a 1994 study, Dr. Martin Hocking noted that a paper cup requires about half a megajoule of energy to manufacture while a ceramic mug requires 14 megajoules of energy to manufacture. If she washed her mug in a dishwasher, she would have to wash it 40 times before it became as energy efficient as my daily paper cup usage. Washing it by hand uses 3-4 times more hot water than a dishwasher, pushing the figure over 100 times. Styrofoam cups require so little energy to manufacture that using a ceramic mug handwashed every day will never be more efficient than daily styrofoam cup usage.
Energy is the prerequisite for all commodities. And understanding the chain of energy production from start to finish is essential in determining whether "doing something" makes a difference in energy reduction.
Corn based ethanol is the darling of the domestic green energy agenda. While often claimed to be the solution for America's energy interdependence and the environmentally friendly alternative fuel, passionate advocates fail to consider what it takes to produce corn-derived ethanol. It requires water for the crops, more water and nitrates to fertilize the soil, gasoline to harvest and prepare the corn for distillation, coal power and sulfates to break down the corn to distillable sugars, and gasoline to transport the end product to market. Even then, ethanol is less energy rich than gasoline. The University of California estimates that "to produce enough ethanol to replace one gallon of fossil gasoline, farmers and processors consume at least 1.8 gallons of fossil fuels."
Supporting corn-based ethanol is bad for the environment. It would be better to just use pure Saudi crude. Sugar cane based ethanol is far more energy efficient, as it doesn't require breaking down starches to sugars for distillation. But sugar cane ethanol, primarily produced in Brazil, is subject to a 54-cent per gallon tariff to protect the fledgling American corn ethanol industry. Why has progressive, environmental America not pushed for the elimination of this tariff?
Jack Hidary, chairman of smarttransportation.org, opines for CNN:
Unless we scrap guzzlers at a faster rate, we will never reduce our oil consumption. Cash for Clunkers is a step in the right direction. It educates the consumer on how much they are paying for having a low-MPG car and encourages them to get into a more efficient vehicle.
The Cash for Clunkers program offers American new-car buyers up to a $4,500 tax rebate for purchasing a new, more fuel efficient vehicle than their trade-in. To prevent the used "clunkers" from being resold on the used car market or its parts salvaged to keep other clunkers alive, the dealer must submit the used car to be scrapped. For this program, the Congress authorized $1 billion (and later an additional $2 billion) to fund the rebates.
It's the same myopia. Do you see it?
Based on the extremities of fuel efficiency eligibility under the program, the New York Times reports:
Here is a possible best case: The average clunker traveled 12,000 miles a year at 16 miles a gallon, consuming 750 gallons. It was replaced with a new vehicle — probably a car, although the “clunkers” offered by the public were often pickups or S.U.V.’s — that can travel the same 12,000 miles on 480 gallons, a savings of 270 gallons.
Multiply by 245,000, the number of vehicles purchased using the first $1 billion of incentives, and the country burns 66.2 million fewer gallons of gasoline a year, or about 1.6 million barrels. At the rate America burns oil, that is about a two-hour supply.
For each new car purchased, an old car in running condition is destroyed, and market pressures staying the same, a new one will have to take its place. The energy costs to manufacture a new car are about 73 gigajoules. The energy in a gallon of gasoline is about 132 megajoules, so in an average efficiency internal combustion engine (20%), it would be the equivalent of 2750 gallons of gasoline. Multiply by the number of vehicles purchased during the first $1 billion of incentives and the country burns 673 million more gallons of gasoline.
So in effect the fuel efficiency savings from this program in the optimal scenario are 1/10th the energy costs of manufacturing the cars to replace the clunkers destroyed. Well done.
In the same CNN article, Mr. Hidary suggests that the Cash for Clunkers program would be successful at its other aim -- as an economic stumulus:
One key feature of the Clunkers program is that it is not just $3 billion of new money into the economy. It is injecting $21 billion -- since consumers must bring the rest of the money to pay for the new car. That is a lot of stimulus for the dollar.
Despite the good intentions, the reality is again questionable. Putting aside that government spending is hardly the injection of "new money" into the economy, Hidary fallaciously measures the economic impact of the program against a world in which there are zero cars purchased. Instead, doesn't it make much more sense to compare the stimulating effect of the program against the baseline of cars that would have been purchased anyway?
According to auto industry research group Edmunds, during any given three month period, 200,000 new automobiles are sold in the United States. And with the $1 billion of initial financing for the program and the size of the average rebate, it would fund rebates for about 250,000 purchases. So that $1 billion actually only stimulated the sale of 50,000 new cars at the taxpayer subsidy of $20,000 each.
And while the next two billion dollars will have a lower per cost subsidy, that number is diminished by the compression effect -- those who would have bought a car before or after the three month program window shift their purchase timing to take advantage of the subsidy, reducing new car sales below average both before and after the program. Each one of these trade-ins would have yielded a used car, but since Cash for Clunkers destroys those vehicles, the used car supply is reduced and so price pressures make used cars more expensive. In sum, whatever stimulating effect is created is offset by the burden on taxpayers subsidizing purchases that would have been made anyway and the depression of the used car market as fewer units are sold. The only benefit is the fuzzy feeling for those like Mr. Hidary who had the best of intentions in crafting this program.
Trying to direct macro-scale economic activity is like trying to play chess with all of the pieces tied together -- no one move can avoid shifting the entire board. But the Care Bear Stare only insists that you do something -- not that you succeed at improving anything.
In April, President Obama convened his Cabinet with the intention of eliminating wasteful spending from their departments' budgets. Over the next 90 days, he demanded they identify a net sum of $100 million of budget items that could be eliminated. As people are really bad at understanding large numbers, you may need a better visualization of how insignificant $100 million is:
The idea of $100 million in cuts over 90 days was so preposterously low that a libertarian scholar misread the order as instructing each of the 14 departments to shave $100 million each totalling $1.4 billion.
The Washington Post summarized:
Although the budget cuts would amount to a minuscule portion of federal spending, they are intended to signal the president's determination to cut spending and reform government, the official said.
The administration is so determined to cut spending and reform government that the Secretary of the Treasury has requested Congress increase the statutory debt ceiling, the largest amount of money Congress is authorized by law to allow us to slip into debt, currently at $12.1 trillion. Current administration estimates suggest by 2015, six years out, the nation will be $19 trillion in debt. In 1995 that debt was less than $5 trillion. In 2005, it was just under $8 trillion.
Sure, the federal government isn't actually succeeding in any measurable way at cutting spending or reforming the vehicles of government. Sure our projects for reducing energy usage and unsustainable fuel sources are actually making the problem worse. But doing something was better than doing nothing.
