Day: April 30, 2018

Myths about FuelWatch

Core Economics

Watching the discussion on my previous posts on FuelWatch, I can see that there are many myths being perpetuated. I thought I’d list them here.

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Renewables Rip-Off: Despite $4 Billion in Annual Subsidies, Wind & Solar Delivers a Trivial 2% of Australia’s Power Demand

STOP THESE THINGS

In any bargain, those stumping up their own cash, tend to ask what they’re getting in return. When it comes to the billions in subsidies thrown at windmills and solar panels, the answer is: not much.

Including domestic, rooftop solar annual subsidies to wind and solar add up to a staggering $4 billion. The cost of which is added directly to retail power bills. The greatest government mandated rort in the history of the Commonwealth, started in 2001 and runs until 2031.

Now, the value minded might forgive the scale and duration of that forced ‘largesse’, if there were a commensurate increase in the output said to be drawn from nature’s wonder fuels, sunshine and breezes. Except, as David Bidstrip points out, the combined contribution of wind and solar generation to Australia’s energy demand remains risible, and little more than a rounding error.

Money for nothing
Catallaxy Files
David…

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Ignore the Scare-Mongering About Pesticides

Green Jihad

Every year Earth Day brings out a variety of termites and this year is no different. Lo and behold the so-called Environmental Working Group publishes its fourteenth annual Dirty Dozen list describing which products in your local supermarket’s produce aisle are allegedly contaminated by pesticides. This being done in hopes of you embracing an organic diet.

While the EWG’s pamphlet does get a decent amount of, fortunately, people seem to have noticed that the list is nothing more than pseudo-scientific fear-mongering financed by Big Organic.

For example, a professor of science and society at McGill University named Joe Schwarcz recently pointed out that the methodology used for the Dirty Dozem report is very problematic.

Schwarcz also states the EWG used research from the Department of Agriculture’s Pesticide Data Program and estimated the total amount of different pesticides taken from nationwide samplings. He reveals that this is a portion of…

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The downside of efficiency?

Righteous November

A few weeks ago, I went to an interesting talk by Dr. Steve Hallett at Purdue’s Botany and Plant Pathology Department.  It was about how efficiency wasn’t going to save the planet, and he referred to the Jevons paradox/effect.  Basically, even though we would like to think that more efficient use always means decreased use, historically, increases in the efficiency of many technologies have actually increased consumption.

This has to do with something called the rebound effect: when new technologies allow us to use a resource more efficiently, it drives down prices and can lead to an increase in resource consumption.  Granted, I’m not an economist, so at first I was like, “Wow, the Jevons effect makes total sense!”  Then I read more about it and apparently things are a lot more complicated. (Aren’t they always?)

While the rebound effect is pretty uncontroversial and well-supported by theory, the Jevons…

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Blackboard Economics and Stupidity

Our Dinner Table

I really enjoyed and highly recommend this EconTalk podcast with Ronald Coase.

Coase explains why he wasn’t surprised it took 40 years for the FCC to adopt his recommendations to assign property rights to the airwaves:

No [I wasn’t surprised], not after you’ve studied how things actually operate. It’s a surprise that it took as little time as 40 years. No, it’s not possible to study how things are dealt with without realizing the importance of the stupidity of human behavior.

Economists often say, incentives matter. Coase is saying, stupidity matters. I agree.

Next Coase explains the problem with modern economics and his solution (emphasis mine):

Blackboard economics is economics which you can put on the blackboard, in which you study an imaginary system. It’s not empirically based at all. It’s not concerned with what really happens. It’s what you imagine could happen and what you imagined…

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“Delight in Losing Arguments”

Our Dinner Table

In his book The Big Questions, Steven Landsburg offers valuable advice (p. 235):

Argue passionately for your beliefs; listen intently to your adversaries, and root for yourself to lose.  When you lose, you’ve learned something.

Rooting for yourself to lose runs counter to your instincts.  I consider it a sign of wisdom.

If you find yourself saying things like, “I know I’m right” or “I just know that’s the way it works because I feel it,” stop and ask yourself what’s so bad if it happens that you’re wrong?  Consider that you might be wrong.

When I did that, I started learning.

Yes. I’m human and not always wise.  I occasionally get caught up in being right.  But, it’s awfully disarming to a volatile discussion to say, “You know what.  I could be wrong.  Help me see what I’m missing.

Remember ALL part of Landsburg’s advice:

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USA ranked 45th for press freedom by @RSF_en despite no defamation suits for public figures, the 1st Amendment and more newspapers, magazines and social media than you can poke a stick at

Armen Alchian and George Stigler both argued that realised profits are the criterion by which the market process selects survivors: those who realise positive profits survive and will grow their market share; those who suffer losses will eventually disappear unless they improve themselves. The surviving media outlets will be those firms that anticipated or adapted fastest to the current and future demands of their readers and viewers.


Any media bias is likely to be slightly to the centre-left for the following reasons:

  1. Young women tend to be one of the most marginal groups of news consumers (i.e., they are the most willing to switch to activities besides reading or watching the news).
  2. Young women often make more of the consumption decisions for the household so advertisers will pay more to reach this group.
  3. Since young women tend to be more centre-left, on average, a news outlet may want to slant its coverage that way. Media sell space to advertisers and tailor the way they cover politics to gain more readers and viewers.

Puglisi and Snyder found that:

  • Using endorsements of state-level initiatives and referendums, newspapers are located almost exactly with the median voter – the average voter – in their home states.
  • Newspapers are moderate relative to interest groups and political parties.
  • Although newspapers exhibit some variation in their ideological position, they tend to be much closer to the median voter than most interest groups.
  • Newspapers appear to be more liberal than voters on social and cultural issues such as gay marriage, but tend to be more conservative on economic issues such as the minimum wage.
  • On average, the news and editorial sections have almost identical partisan positions.

Positive profits accrue to media outlets that are better at serving their readers and viewers than their competitors. Their lesser rivals will lose money, exhaust their retained earnings and fail to attract further investor support.