Thursday, August 07, 2008

Obama's Malaise Speech

Obama recently gave a 'malaise' speech, and it is pathetically similar to Jimmy Carter's lame malaise speech. To recap, in that 1977 speech, just out of a recession, and with the first oil shock, the country was upset about a lot of things: high unemployment, inflation, crime. Carter's response:

Point one: I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977 -- never.


I'm asking you for your good and for your nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel. Every act of energy conservation like this is more than just common sense -- I tell you it is an act of patriotism.

Of course, good technocratic Democrat that he is, he also had things like import quotas on oil, a broad commitment to US energy sources like solar (paid for by a windfall profits tax on oil companies), more coal (which the US has a lot of), and of course, conservation.

How'd he do? Oil imports are at a new all-time high. Obama's solution is similarly focused on unrealistic solutions, such as inflating our tires and getting more car tune-ups. He notes a 10% fuel efficiency increase by such a method, while critics say more like 3% (has anyone ever noticed a 10% increase by inflating their tires?). But the problem is some inefficiency has to be expected, and you can always point to some inevitable waste as a cheaper solution than something more tangible, like drilling for more oil, or going nuclear, because at the margin, moving from our suboptimal level of inflated tires to the optimal level is as great as any other policy, which will also be marginal.

I'm for inflating tires optimally, but if people aren't saving 3-10% on energy because of their own laziness, even though it directly affects their pocketbooks, it's implausible to expect this solution to make any difference. In sum, I would start building more clean coal plants (we have lots of coal), more nuclear. That can be done now, and would allow more electric cars to be charged.


Anonymous said...

what is the alternative named mccain proposing? ummmm...errrr.....yes....ummmmm

Eric Falkenstein said...

Nuclear, drilling.

Anonymous said...

i read somewhere drilling is not a slam dunk and would provide only 1% relief. in this light the 3% savings looks good and it's easy to do

J said...

you can always point to some inevitable waste as a cheaper solution than something more tangible, like drilling for more oil, or going nuclear, because at the margin, moving from our suboptimal level of inflated tires to the optimal level is as great as any other policy, which will also be marginal.

Very interesting insight and I shall use it in our meetings about water policy in Israel. The dominant policy today to solve our water scarcity is saving water, because our economists say that the cheapest way of improving tghe situation is not producing more water but reducing waste. A huge propaganda campaign tries to change people's behaviour nad make the close the faucets and use repair leaks and so on. It does not work but it is difficult to combat the cost benefit analisys. Could you please make more clear what do you meant by "on the margin"? We are always working or improving on the margins.

Bob Goldie said...

I just don't get why so many commentators seem to think that earnestly discussing car tyre pressure like its an important issue in a presidential election campaign, is just fine by them. Am I missing the irony? I know it might make me seem like a hi-falutin' jerk, but what the ...? Are issues like federally mandated tyre pressure standards truly an issue on which the leader of the free world might get elected?

Wow, this planet has truly become a weird place to inhabit! What about we deal with some meaty issues while where about it, like say ketchup viscosity degradation?

Eric Falkenstein said...

Think of it this way. There's at least $10B in waste in the government at any time, annually. Thus, anything that saves less than $10B is irrelevant because we have a costless savings of more than that merely reducing waste in government!

The problem is that there is always suboptimality, so this 'free lunch' assumes a problem will be solved that never is. The key is, unless you have a really specific plan to reduce such suboptimality rather than 'moral suasion', it is improbable that it will work, because usually such wast has first order effects on the wasteful, and so then the question is, if they are wasting 10% of their fuel, or whatever, why don't they stop doing this? I don't know, transaction costs, something, but merely a public exhortation is like saying 'we should stop all murders, because they are bad, and we would all be better off without them'. True, but there is always murder.

Anonymous said...

My understanding is that we are consuming about 25% of the worlds oil, but have about 4%-6% of the reserves. We are already getting the "easy" to drill oil.
From what I understand, the drilling is a "feel good" argument that will only put a small dent in imports ... and it won't do that for years and at a much higher cost of production than from the oil rich countries that hate us.
The numbers indicate that conservation (mostly driving smaller cars, plus yes ... inflating and oil changes) could have a much bigger effect.
When I take my kids swimming, with three people in our Sienna we navigate a parking lot filled with big Lexus SUVs, Honda Pilots, Honda Odysseys and Toyota Siennas all that seat 7 or 8. Those vehicles are handy for the 1 time every two weeks we carry the neighbor's kids.

Anonymous said...

BTW: One of the biggest factors why everyone is driving the 3 row vehicles now: can't put kids in the front seat, and everyone has got to have a seat belt.
When I was a kid and we carpooled, there would be mom and 2 kids in the front, and 3 or 4 kids in the back (with the 4rth maybe sitting on the giant transmission hump). The kids in the back would flick your ear, and you'd turn around lean over the seat and go at it.
How did Mom drive like that?

Anonymous said...

What about clean coal?

Is there such a thing?