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January 30, 2011

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Number One (Electrical Engineering, OSU) was back last week, pointing out that we "need public investment" in order to provide alternatives to resources that were limited. Disregarding the entire argument that our natural resources are limited, I asked what the best indicator of value would be?

He seems to have missed the fact that the best indicator of value is price. And that markets are the best, most efficient, allocators of resources based upon price. Any time you have a government subsidising the purchase of any good or technology, you create a market imbalance that leads to inefficient market allocations. Dollars end up going to the wrong place.

If, and when, substitutes for gas-powered automobiles are priced at or below the costs of gasoline-powered automobiles, then those substitutes will end up being demanded by the marketplace. We will come to them naturally. Of course, it also means that purchasing a dependable horse may make more sense than purchasing an electric car. Which may also see a concommitant reduction in demand for ethanol, bring the cost of horse food down.

I think there is a part of us that, when looking at pictures of the Blue Marble that carries us through our spiraling universe, sees limits; the finite nature of this little old planet and leaps, therefore, to the conclusion that since we can see it all at once, we are or going to be victims of this finiteness. (Actually, we can only see half in any given picture, but you get the idea.)

For me, it seems that the greatest criticisms of this type of thinking are reducible to the differences between the study of static versus dynamic systems. It is quite easy to come up with answers about investments, global warming, resource allocation when viewed only through static analysis. Once dynamics are introduced though, it becomes hard. And nothing hard is worth thinking about, right?
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"Investment" just means that government tries to pick winners. Would you trust them at the track with your cash?

That's what it comes down to.

Government "invested" $15 million in the aerial tram. Then "invested" more to make up the actual $57 million.

Same with Loot Rail. Same with the South Waterfront "developments". Losing propositions, all.

Government doesn't "create jobs" - for that to happen, government needs to get out of the way and quit "investing".

Your point about static vs. dynamic systems typifies the government perspective. Government is about as static as you can get, which is why, in general, everything they get involved in is a screw-up.

Partly, that's because they don't think. They "feel". They "believe". Thought is antitheitical to the nature of government.

Gasoline is one factor which makes maintaining cars expensive. The price of gasoline is increasing day by day. The electric cars could be the solution to this problem. People with electric cars need not worry about gasoline anymore since they can still drive without it.

Gas is among the least expensive items in the USA in terms of maintaining an auto. Electrics have far more limited range, and are considerably more damaging from an environmental perspective. From the latter perspective, it's less damaging to own and operate two hum-vees than one Prius. And the Prius is a hybrid.

An all-electric is even worse, as in addition to the damage related to battery production, the electric recharge has to be generated somewhere. It ain't solar, and it ain't wind.

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