Ruminations on Optimal Governance

If there were two words to describe how we might ensure our civic finances were sustainable, abundant, equitably collected and equitably distributed, it might be this – “Optimal Governance.” That theme, along with Civitas Fidelis, is a guiding principle for what we believe and advocate. There is a great deal of analysis and commentary, posted onto our earlier site EcoWorld (sold in May 2009) that can provide useful information and insight into many of the key issues surrounding these themes. With no further ado, here are 20 favorites:

The Abundance Choice –  March 28th, 2009

Smart Growth, or Green Bantustans? –  March 17th, 2009

Calculating Employee Compensation –  February 8th, 2009

Humanity’s Prosperous Destiny –  January 16th, 2009

The Tyranny of Unions –  January 6th, 2009

Principles of New Suburbanism –  November 23rd, 2008

Bonds Are Taxes –  October 22nd, 2008

Abolish Public Employee Pensions –  October 7th, 2008

The Crichtonian Green –  September 26th, 2008

Rational Environmentalism –  September 23rd, 2008

The XXIX Olympiad –  August 8th, 2008

Lucky Lucky America –  August 1st, 2008

Assault on Reason –  June 3rd, 2008

California’s Global Warming Act –  July 2nd, 2008

Environmentalist Priorities & Global Warming –  May 15th, 2008

Fossil Fuel Reality –  May 3rd, 2008

Unions: Ideals vs. Reality –  April 13th, 2008

Liberal Fascism –  February 23rd, 2008

Unions Aren’t Green –  February 20th, 2008

Inflation vs. Deflation –  September 25th, 2007

Civic Finance & Civitas Fidelis

We’re back. The posts already appearing here on CIV FI were originally written and accessible at a website launched in the summer of 2009 that was taken down for several months, and now appear here as the opening posts on CIV FI, or The earlier site was a placeholder, whereas this one is intended to grow into its name.

As stated on the “About” page, “ was created to answer a need for greater discussion among and between investors and policymakers on the issues of financial sustainability.” That is a tall order, but it is truly the only theme that feels appropriate as human civilization enters the 2nd decade of the 21st century facing its biggest financial challenges in eighty years. And these challenges are not over. They’ve just begun. But they can be solved. Ongoing, downwardly spiraling financial catastrophe is not inevitable.

Civic finance is not quite the same as economics. Unlike an economic theory, you can analyze civic finance on a spreadsheet. You can reduce it to cash flow projections. You can isolate your assumptions and you can identify your options, often with unsettling precision. This website was created because there is far too little of this sort of analysis available on the internet, and as a result, there is grossly inadequate discussion regarding everything from infrastructure investment to environmental cost/benefit analysis to public sector deficits, and on and on.

Given the times we live in, with far too many consumers still mired in debt to their eyeballs, and therefore unable to buy more products or pay higher taxes, the challenge to finance the advancement of civilization is possibly the central challenge of our time. The challenge of accumulating and deploying massive quantities of capital to build the next big pieces of our advancing civilization has become, inconveniently, a nearly impossible prerequisite. Until resolved, it thwarts our attempts to realize the dreams-come-true that advancing technology already can offer us. Dreams are expensive. Choices are hard. And the old days of endlessly available credit are done.

CIV FI is an abbreviation for Civic Finance, but it doesn’t end there. The more you examine the pair of words, the more they may grow on you. In Latin, the abbreviation “CIV” forms the beginning of the word “civicus,” meaning civic, but it also forms the beginning of the words “civilus” (civil – as in political or courteous), “civilitas” (politics), “civis” (citizen), and “civitas” (community state). Similarly, in Latin, the abbreviation “FI” forms the beginning of the word “fiducia,” meaning financial trust or assurance, but it also forms the beginning of the words “fidelis” (faithful), “fides” (belief, honor, loyalty, truth), “fidentia” (self confidence), and even “fidicen” (a lyric poet).

With all these connotations, CIV FI feels like the right name at the right time. Civitas Fidelis. Faith in Civilization. How can anyone hope to create and conduct an open, utterly transparent forum for the discussion of creative, sustainable, humane and equitable ways to restore our Civic Finance, unless their creed were also one of Civitas Fidelis. In that spirit, let us begin.

Before writing the 19 posts already available here, all written between June and August, 2009, I edited an online magazine called EcoWorld. From early 1995 through May 2009, was a platform where I posted nearly 1,000 articles and commentaries, about half of them written by guest authors, the rest by me. That website began as an attempt to promote free market environmentalism, but as I continued to immerse myself in the environmental movement as well as, much later, within the clean technology industry, I realized there were fallacies surrounding environmentalism so profound that what was necessary was to completely redefine environmentalism.

As a participant in the clean technology industry, I further realized, especially in the last few years, that the funding and the priorities of clean technology were severely skewed. Investment and deployment of worthy technologies were being deferred, while marginal, fanciful projects and technologies were being advanced due to environmentalist concerns – reflected in government incentives – that were often without scientific merit or financial merit. Finally, I realized that these flaws that afflict mainstream environmentalism are part of something much bigger – a struggle to define what sort of political economy we choose to live under. A debate over what model for civilization is optimal, and how to get there from here.

CIV FI aspires therefore to continue where EcoWorld left off, to join that larger debate, armed with not only analysis and commentary, but spreadsheets as well.

Hyperliterate & Illiterate

Ever since the housing bubble burst and the market crashed for financial derivatives tied to home mortgages, it has been a mystery to me how citizens and politicians could have let this happen. My theory to-date is this – the citizens who fell into this trap were financially illiterate, and the financiers who engineered the trap were financially hyperliterate. That is – ordinary people abandoned their common sense and felt they had to buy a home because prices would keep going up – accepting mortgage obligations no financially literate person would tolerate, and elite financiers were similarly unable to see the forest for the trees because they knew so much they lost their perspective – their hyperliterate quantitative models gave them a false sense of security.

No wonder the science of economics is not only dismal these days, but in the grip of a well deserved intellectual crisis. But there is another theory that is taking hold among a sorely disgruntled American population, a theory that if it spreads, will abruptly and severely rearrange the American political balance of power – hopefully for the better. That theory holds that this crisis was caused by a decade or more of bipartisan, elitist abandonment of the interests of hard working American citizens in favor of big government, big labor, and big finance.

A commentator of extraordinary lucidity who provides useful insights on this topic not always available in the American press can be found at Asia Times Online. Writing under the pseudonym “Spengler,” he offers a perspective on the world, and the United States in particular, that is stripped of hyperliteracy – financial or otherwise – and cuts to the chase. Here is how he characterizes what happened, and is happening, in Washington today:

The one-trick wizards of Wall Street had one idea, which was to ride the trend and pile on as much leverage as credulous investors and crony regulators would allow. It has gone pear-shaped, and those who didn’t cash out early along with the cynics are poor. Fortunately for them, Obama will let them play with the budget of the US federal government for the next four years.

Failed financiers run the Obama transition team. It used to be that the heads of great industrial companies got the top Cabinet posts. Now it is the one-trick wizards. After George W Bush fired former Treasury Secretary Paul O’Neill, who had run Alcoa, the last survivor of the species was Vice President Dick Cheney, the former CEO of Halliburton. Obama’s bevy of talent comes from finance. American industrialists have become figures of ridicule, like the pathetic chief executive of General Motors, Rick Wagoner, begging for a government loan.

America, and Americans, have been accumulating debt for 40 years. Back in 2007, in a post on EcoWorld entitled “Inflation or Deflation,” I attempted to quantify this debt, quoting Paul Rubino from, who said “the past two decades of low inflation and steady expansion have been purchased with ever-greater amounts of debt. In the 1960s it took about a buck-fifty of new debt to produce a new dollar of GDP. Today it takes about six bucks…” and “Total debt in the U.S. economy grew at a seasonally-adjusted annual rate of $3.7 trillion, and now stands at $46 trillion, up from $29 trillion in 2001…”

Now our Obama administration is well on their way to more than doubling our federal debt before the end of the first term – projections now put federal debt at 17 trillion by then. This will trigger inflation – indeed the painful reality is despite the fact that failed (but hyperliterate) financial foxes are guarding the nation’s economic henhouse in Washington, this massive spending is the only way to avoid deflation, which would be far worse. Let’s return to Spengler for more on this:

For a quarter of a century, the inbred products of the Ivy League puppy mills have known nothing but a rising trend in asset prices. About the origin of this trend, they were incurious. The Reagan administration had encountered a stock market in 1981 trading 50% below its the long-term trend. Reagan restored the equity market to trend by cutting taxes, suppressing inflation and easing some regulations. The private equity sharps were fleas traveling on Reagan’s dog. They simply rode the trend with the maximum of leverage.

Now that the stock market has collapsed, the private equity strategies cannot repay their debt, and their returns have evaporated. Note that equity investors spent a decade in the cold, from 1973 to 1983; it may be even worse this time. The maturities on debt issued to finance private equity deals will come due long before the recovery.

Over the long term, we know that the average investment cannot grow faster than the economy, for investments ultimately are valued according to cash flows, and cash flows stem from economic growth. Real American gross domestic product grew by 2% a year on average between 1929 and 2007. Whence came the enormous returns to the Ivy League? Some of them surely came from betting on the right horses, but most came from privileged access to leverage.

For all Obama’s bashing of the rich, it is arguable that Obama’s administration is a product of public sector labor union power married with Wall Street power. Look no further than our public sector employee pension funds, who invested hundreds of billions – in aggregate, trillions – with hyperliterate Wall Street brokers – and all of them actually believed they could earn double-digit real returns on trillion dollar funds for generations.

For much more, read “Obama’s One Trick Wizards,” or anything by Spengler.

Healthcare in America

As someone who has either owned small companies or worked for small companies, I have had to frequently change health care plans. Sometimes my healthcare was earned as an employee benefit, sometimes I joined a small group plan as the principal of my own company, and sometimes I participated in a COBRA program through a former employer.

With this background, it is fair to say I know what it takes to get health insurance coverage in America. For nearly 30 years now, two things have always been true: I have never been unemployed, and I have never been without a quality PPO health insurance plan. And it hasn’t been easy.

The problem with Obama’s health care plan – similar to pretty much everything Obama is doing – is that it is aimed at helping anyone but people like me. Why is this? Because I have been responsible. I have always found work, often without benefits, and I have always made sure to purchase quality health insurance – one way or another. And there is no way Obama’s health care plan is going to make health insurance better and cheaper than the health insurance I currently have – this despite the fact that as a healthy 51 year old Californian, without COBRA (which will expire soon, yet again), I will have to pay $750 per month for a good PPO. If Obama’s plan is enacted, I will have no choice but to enroll in a rationed publically administered health insurance plan. Individual plans for a person my age, if they are available at all, will cost more than $750 per month, probably much more.

There are a host of reasons why healthcare insurance has come to this juncture – but most of all we are at this juncture because of what one might call “the great leveling” is happening. That is to say, the bell curve of individual economic status is flattening, with more and more poor people at one extreme and more and more rich people at the other – and the legislation and regulations (or lack of legislation and deregulation, it depends) that have faciliated this trend have been bi-partisan.

Those of us who are too well off to collect free benefits, yet too poor to be able to pay punitive prices for insurance coverage (along with electricity, water, education, transportation and housing – all being made more expensive in the name of social justice and the climate “crisis”) – are having everything we’ve worked for systematically confiscated through higher taxes and fees and regulated prices. It is sad to see mainstream media commentators – most of them quite wealthy – describing those who criticize this trend as merely “fringe” groups. All we ask for are reforms that first recognize and reward responsible behavior before enacting policies that will make us pay more for the “disadvantaged” and “exploited” classes.

The reality of healthcare in America is that everyone does get healthcare. If people aren’t able to afford health coverage, they go to emergency rooms. This isn’t perfect but it works. There are no easy answers, and nobody is suggesting reforms shouldn’t be on the table, but it is getting very tiresome to have our President – through his proposals – pretend that personal financial stability achieved through hard work and merit are only accidents of privilege, and therefore actively design policies that punish us.

American healthcare reform should start by eliminating barriers facing those who are willing and able to pay for quality healthcare, and see what that does for overall costs. The results might be quite positive for everyone. For example:

(1)  Allow individuals the same tax deductions for their health insurance premium payments as businesses receive.

(2)  Make it easier for associations and organizations to offer group health insurance plans, instead of only favoring companies who may or may not provide an individual a job for life.

(3)  Eliminate interstate barriers to health insurance companies so they can operate and compete in every state.

(4)  Enact tort reform so malpractice lawsuits are reined in. Not only do the inordinately inflated premium payments increase costs, but far more significant are the costs of over-testing and over-treating as a precaution against lawsuits.

These four reforms would be a good start towards improving America’s health care system. The idea that government should launch a “competing” public health care option sounds good, but in reality this would kill the market for individual insurance. The only private insurance plans left would be those enjoyed by employees of large private companies, and – ironically – by public sector employees. Entrepreneurs would be forced into the government program.

Maybe someday, when labor unions in the public sector (along with their “work rules”) are declared illegal, and merit (instead of seniority or belonging to a “protected status group”)  is the sole criteria for better pay and career advancement, and public sector employees get social security and medicare when they are retired, just like the rest of us, it might be possible, even palatable, to create to a publically administered health insurance plan to compete with private sector plans. Maybe then we can trust the public sector to take on more projects, but not before.

There is absolutely nothing the Obama administration is doing with respect to health care, financial reform, or environmental “crisis” management, that is doing anything for the small business, or any true entrepreneur who still respects the meaning of the word. To-date, President Obama has the most anti-entrepreneurial administration in the history of America, because his policies – however well intentioned – reward irresponsibility and indolence, and punish individual industry and initiative.

The Prosperity Choice

Advocates of policies designed to regulate CO2 tend to invoke the precautionary principle – that is, even if something incredibly horrible is not really happening, preparing for this horror is something worth doing, because the consequences of preparation for nothing are less than the consequences of doing nothing and having the worst scenarios actually come to pass.

This position rests on two fundamental assumptions, regulating CO2 helps the economy more than it hurts the economy, and regulating CO2 would actually have a positive impact on global climate trends. But there is an alternative version of environmentalism that would argue against this, and make the following claims:

(1) CO2 regulations will cause grievous harm to the U.S. and global economy and will trample upon the freedom of individuals and nations.

(2) Imposing CO2 regulations will do nothing to mitigate alleged harmful trends in global climate.

(3) Humanity is poised at the brink of unprecedented prosperity and CO2 regulations will create a tyrannical global order of rationing and arbitrary power that will rob humanity of this positive destiny.

In support of these positions, especially the third – that we are poised at the brink of unprecedented abundance and prosperity, are three articles:

The Abundance Choice –  Abundance is a choice, and it is a choice the privileged elite must make – in order for humanity to achieve abundance, the elites must accept the competition of disruptive technologies, the competition of emerging nations, and a vision of environmentalism that embraces resource development and rejects self-serving anti-growth alarmist extremism. The irony of our time is that the policies of socialism and extreme environmentalism do more harm than good to both ordinary people and the environment, while enabling wealthy elites to perpetuate their position of privilege at the same time as they embrace the comforting but false ideology of scarcity.

Humanity’s Prosperous Destiny –  It is often easy to overlook the many positive forces of history, forces that can be identified with Euclidean precision, immutable forces that will deliver to humanity abundance in all forms, wealth to conquer poverty, cleanse the planet, and satiate the longings of peoples and nations. As the world urbanizes, voluntarily and en-masse, rural lands and wildernesses are relieved, and open space becomes abundant. As technological innovation advances at exponential rates, energy and water will also become abundant. The most important natural resource in the world is human creativity, and it is inexhaustible and will find a way to alleviate any scarcity.

Fossil Fuel Reality –  In terms of choosing between fossil fuel development and alternative energy development, another point which should be put to rest is the notion we are running out of fossil fuel. The next three charts show the potential reserves of the primary fossil fuels – oil, coal, and gas. In order to develop estimates for unconventional sources of these fuels, we have taken the midpoint between the high and low estimates. (1) If oil provided 100% of global energy, and we used twice as much as we do today (1,000 Quad BTUs per year), there would be a 59 year supply of oil based on known reserves. (2) If coal provided 100% of global energy, and we used twice as as much as we do today (1,000 Quad BTUs per year), there would be a 218 year supply of coal based on known reserves. (3) If gas provided 100% of global energy, and we used twice as much as we do today (1,000 Quad BTUs per year), there would be a 45 year supply of gas based on known reserves. So when you add it all up, at twice the current energy consumption overall, oil, gas and coal could potentially supply all the energy we need in the world for the next 300 years – not including gas hydrates.

Prosperity is indeed a choice, and to achieve global prosperity there are indeed competing versions of environmentalism. The mainstream environmentalist vision is to effectively ration fossil fuel in order to accelerate development of alternatives to fossil fuel, at the same time as this vision allegedly attempts to mitigate the allegedly harmful effects of anthropogenic CO2 emissions. And this mainstream environmentalist vision also opposes nuclear power, genetically modified crops or biochemical feedstocks, hydroelectric power, desalination, and new aquaducts, and even imposes crippling lawsuits and regulatory barriers to establishment of solar and wind energy.

An alternative to mainstream environmentalism may be characterized as clean technology environmentalism, or clean development environmentalism. In this version of environmentalism, the emphasis is on economic development as the best way to empower society to have the ability to mitigate environmental challenges, whether they are the costs to clean up a superfund site or restore a habitat, or the costs to better adapt to extreme weather. The conflicts between those who want to pursue cleantech development and those who want to stop all development, everywhere, are rife with profound nuances and insufficiently explored by all concerned. Environmentalism is not monolithic, despite the roar from Gore and his like-minded multitudes.

Public vs. Private Sector Unions

Any ideology with scores of millions of willing adherents cannot be completely without merit. For any movement numbering millions of people to flourish, at some level, their underlying ideology must resonate with mostly good people as well as with the inevitable corrupt contingent. Unions, and their ideologies, are examples of good ideas – as well as whatever bad one might ascribe to the influence of unions. And any discussion of unions in America today must assess the ideological schisms between public sector and private sector unions.

Unions for private sector companies grow when the company itself grows. If the company is not healthy, they are not healthy. When companies declare bankruptcy in the private sector, the unions and the jobs go away along with the company. Unions in the private sector envision jobs that build wealth – freeways, levees, aquaducts, new underground telecom/utility conduit upgrades in urban areas, the list is endless and inspiring. They envision jobs in capital intensive, heavy industries, construction, manufacturing, they want Americans to buy American made goods and enjoy a better and better standard of living. Private sector unions are somewhat more likely to recognize that their imperative – more union jobs – is better furthered through building infrastructure and durable manufactured goods, better furthered through competition between private companies in the free market, better furthered with less government. But the conditions that favor more jobs in the private sector conflict with the incentives that create more jobs in the public sector.

Unions represent many public sector organizations that provide absolutely essential services that are best left to government – public safety and military operations in particular. Unions in the public sector, however, also represent organizations whose numbers increase when social problems increase. Hence counter-productive redistributionist efforts by government intended to reduce, for example, poverty and inequality, because they increase the number of government worker jobs – create an incentive for these efforts to be supported by unions representing government workers – especially if these well-intentioned programs are making the problem worse. One of the most crucial battles within the public sector unions will be between those who want to see problems solved through economic growth, not redistribution, supporting a smaller government that retains the best, brightest, most capable and crucial, highly compensated employees within smaller organizations. They oppose those within public sector unions who prefer to see government power increase regardless of the economic or social cost.

One way to characterize the contrast between public sector unions and private sector unions is to say the public sector unions are internationalist and the private sector unions are nationalist. In-turn, this would suggest many well-intentioned members of public sector unions view Amerca’s national interests as always suspect to charges of being inherently ill-gotten if not criminal, because Americans consume more resources than their proportion of global population might be entitled to on a per-capita basis. These conscientious internationalists conclude America’s wealth must be redistributed to the less fortunate throughout the world. This is altruism run amok, but altruistic nonetheless.

Private sector unions, potentially, have a better understanding of the fact that it is financial sustainability, not resource sustainability, that is at issue with alleged American over-consumption. Put another way, sustainable financial growth is the result of honest hard work and innovation, which can combine in a society for centuries creating economic opportunities and wealth-producing assets, and therefore conveys to the peoples of these societies the right to a proportionately higher standard of living. According to this argument, Americans have earned the right to have a better standard of living than those of other nations. This more nationalistic position held by many private sector unions is another key reason job-creating incentives differ between public sector and private sector unions.

Private sector unions are more likely to oppose efforts to increase immigration – something that is especially harmful when fewer highly-skilled immigrants are allowed into America to work – they are wary of open borders and free trade, opposing NAFTA, for example. Nonetheless, to the extent private sector unions are nationalistic rather than internationalist furthers America’s priorities as a people; to internationalize America and redistribute her wealth to the world would require very big government and millions of new government jobs, but this new regime would diminish if not destroy the quintessential American dream, and the jobs that come every time that dream is realized again by another original American entrepreneur. The truth and reality of this uniquely American dream is the source of America’s economic vitality.

Another way unions in the public sector vs. unions in the private sector contrast regards environmentalism. In the public sector, far more revenue can be collected from the private sector by creating elaborate permit requirements and a civil/criminal legal environment of Byzantine complexity and stupefying expense, than by participating in any actual building. Private sector unions, on the other hand, benefit when something real is built, a bridge, a freeway, an aqueduct, a pipeline, a power plant.

There is a vision of environmentalism that ought to be quite popular with private sector unions, a clean development environmentalism that stands athwart the mainstream environmentalist complex (one that incorporates the entire American oligarchy – big government, big finance, big corporations, and public sector labor) and shouts “Stop the Rationing, Cut the Green Red Tape, Rebuild the Nation.”

There is a natural partnership between clean development environmentalists, and private sector unions, supporting job creating, common sense reforms – no bullet train or light rail until roads and freeways are upgraded and unclogged, no more zoning that favors building high-density clusters of McMansions that destroy semi-rural suburbs within the arbitrary “urban service boundary,” no more water rationing instead of a free water market, no more energy rationing instead of a free energy market, and especially, no CO2 regulations, which have more to do with global governance than climate management. These regressive policies further the goals of the internationalist public sector, as well as the oligarchical recipients of corporate welfare, but they do little for the private American worker, and they stunt American economic growth.

One metaphor to describe America might be said to be as a company – with assets of land and infrastructure and intellectual capital. If America can continue to create abundant wealth, America’s ability to address questions of poverty will increase at the same time as the rate of poverty decreases. Americans may owe trillions upon trillions, but America’s currency will never collapse, or hyper-inflate because America is not just a collection of financial transactions – America is a company, an economic entity of staggering wealth, a merit-based culture with a libertarian, entrepreneurial heart. How unions in the public and private sector recognize and address the consequences of their respective priorities – internationalist vs. nationalist, environmentalist vs. cleantech development, and authoritarian vs. entrepreneurial – given the fact they currently control (from within and without) a significant percentage of America’s city, county and state governments – is arguably the prevailing political question in America today.

Industrialize the Solar System

On this 40th anniversary of the first manned mission to the surface of the Moon, it is perhaps not so far fetched to venture a suggestion such as this. And after all, if, as conventional wisdom has it, it is within our power to micromanage the earth’s climate by shutting down our industrial combustion, going back to the moon and beyond isn’t far fetched at all.

I remember that summer afternoon in 1969 quite well. A memorable part of my childhood had been spent assembling plastic scale models of spacecraft – I must have built nearly all of them, from Mercury to Gemini to Apollo, and the astronauts were my heroes. As we followed the progress of Apollo 11 from Earth to Moon, I could name every module, describe every maneuver. To this day I remember Neil Armstrong’s voice, crackling with static, stating “one small step for man, one giant leap for mankind.” If anyone had told me this would be the farthest we would venture as a species for the next 50 years, I would have thought they were crazy.

The relevance of space industrialization and settlement today is greater than ever, although you would never know from listening to our politicians or our media pundits, or even our NASA administrators. The most visible face of NASA these days is James Hanson, who is a fanatical coal-bashing global warming activist with little if any apparent interest in seeing humans ever travel beyond this planet.

Last year I was fortunate enough to host Elon Musk as a keynote speaker at the 3rd annual GoingGreen, a cleantech investor conference produced by AlwaysOn Media that I help to program. Musk, whose company SpaceX is in the thick of the competition to become a successful manufacturer of next generation orbital launch vehicles, gave a mesmerizing account of his company’s progress over the past few years. But when the time came for questions from the audience, the most memorable moment came when a journalist asked him how he could possibly justify spewing so much climate killing exhaust into the air. Musk avoided a direct confrontation with the questioner by stating his belief that we must become a multi-planet species, and exhaust from his launch vehicles were a necessary evil in pursuit of that objective. But Musk might have elaborated on the upside.

The case for space is multifaceted, with both economic and environmental benefits. In fact, there are few examples of a project that could have so many clear benefits in both of these key areas. But before enumerating them, let me state my position clearly – I don’t think anthropogenic CO2 emissions has anything whatsoever to do with climate change, and I think the attempts to regulate and restrict CO2 emissions are the most regressive, mean-spirited fraud in the history of the United States. So I couldn’t care less if rockets spew emissions, as long as they’re clean burning. In general, I believe the emphasis on restricting emissions instead of simply cleaning them up is completely misguided.


(1)  Space development will catalyse economic development in general, which always enables higher environmental consciousness and greater resources to address environmental challenges.

(2)  Living in space requires recycling technologies for water and air that are many times more demanding than on earth, and these technologies will have applications that will improve water and emission treatment technologies on earth.

(3)  Zero gravity manufacturing and manufacturing off the planet can eventually allow us to do potentially hazardous work in space where there is no danger to the earth’s ecosystem.

(4)  There are benefits in terms of earth observation and ecosystem management that we have only begun to realize through a presence in space.

(5)  We may build satellite solar power stations and beam the energy they produce back to earth.

(6)  We can access minerals on the Moon, Mars, other terrestrial moons, and the asteroids that eventually can take pressure off resources on earth.

Item one is probably the most significant of all of these. Space industrialization will create wealth. The Apollo program, and the entire space program prior to that, yielded dramatic advances in technology that had rippling applications throughout the economy – microelectronics, materials sciences, and aerospace, to name a few. There is no reason to think a new and revitalized space program would not accomplish similar results, creating spectacular new wealth and helping to ensure American technological leadership.

With literally trillions of dollars being thrown into the U.S. economy today as part of a federal economic stimulus, it is a terrific shame that a U.S. manned space program, tasked with an urgent mission to industrialize the solar system, is not a top priority for these funds. Instead we are spending money making sure everyone can surf the internet, among other bottom-feeding uses of funds that do nothing to advance our technological prowess, but satisfy myriad oligarchical vested interests who only wish to perpetuate the status quo, stagnant technology and all.

I remember working at Hughes Aircraft Company’s Space & Communications Group back in the mid 1980’s. I remember watching the movie “The Right Stuff,” which came out back around that time. I remember hearing the old timers talk about how it was when Howard Hughes would show up at the labs at midnight, surprising the engineers with his detailed knowledge of the technical details of their projects. I remember hearing stories about how Werner Von Braun would have thrown men out of the space program on their ears if they had even thought a moon landing couldn’t take place by the end of the 1960’s. Today Von Braun would have been sued for creating a hostile work environment, and consigned to oblivion along with his vision.

Now we live in a nation where trial lawyers, union bosses, environmental extremists, and practitioners of race and gender politics control the federal agenda. These ruling politicians have based the currency of their careers on economic redistribution and the politics of resentment, and they are abetted by enervated corporate boards who only find appeasement to be a viable strategy. Politicians who would rather talk about “diversity” than consider the value of conquering space despite many inevitably tragic but necessary costs.  Politicians served by bureaucrats who would require an environmental impact statement before crashing a probe on the moon, much less develop a permanent base on its surface. They are so far removed from the heroes who braved the oceans in ships of wood and canvas or the heavens atop missiles that they have forgotten everything they are made of – people for whom the only sacrifice worth enduring is the evisceration of their heritage. People who cringe in fear of weather, and shut down our power plants to appease the Gods.

Contrasting Environmentalism & Unions

Gabriel Garcia Marquez, a man who always stood up for the worker, once made this very contrarian statement “I would continue where others have stopped, and I would rise when others sleep.” This is an inspiring explanation of the moral worth of polemics, or being contrarian for its own sake. Because not only are polemics a potentially pointless, occasionally perilous game, tolerating the polemicist is the only reason we have political freedom. One might also add that indulging contrarian thought is the only way we preserve a glimmer of truth, during every time our world is seized with misplaced monolithic zeal, and consequently, nurturing the contrarian is a way civilization can better adapt and embrace disruptive and productive innovations and more quickly evolve. So how would workers or contrarians view our latest global panic, the war on CO2 emissions? In considering this question, the differences between unions, who care about workers, and environmentalists, who care about nature, become quite interesting.

Global warming policies and environmentalist policies in general are only in part about global warming or environmentalism, they are more generally about to what extent we redesign our government to give more rights to government and fewer rights to individual property owners. Environmentalists claim their policies benefit the economy, but one might just as easily argue that is not only false, but dangerously false. In the name of environmentalism we are not simply slowing our economy down, we are failing to develop and maintain infrastructure necessary to avoid natural disasters. A certain amount of environmentalist wisdom informing government laws and regulations is healthy, indeed essential. But restricting development of water infrastructure, power plants and freeways, forcing developers to only be permitted to approach heavily restricted lists of eligible property owners based on “urban service boundaries,” and litigating literally everything in the name of some environmentalist statute or presumed statute – is environmental extremism, not common sense environmentalism. Now we have the war on CO2. This imperils the global economy, it undermines attempts to improve human safety and security, and threatens the freedom of individuals and nations.

Two of the biggest drains on the United States economy over the past 30-50 years are environmentalists and labor unions. Both have reduced the efficiency of the economy in critical areas. Environmental laws and litigation have raised the costs for all resources, dramatically slowing economic development while only yielding marginal additional environmental benefits – if any. The power of big labor, in both the public and private sector, has reduced the ability of unionized workforces to right-size their entitlements in the face of lower revenues. This inflexibility in-turn causes larger than necessary shocks when large corporations or government entities postpone restructuring because of legacy obligations.

Unlike environmentalist policies, however, the impact of unions – in both the public and private sector – are at least economically progressive in a relatively egalitarian and competitive system that values project-merit, and therefore release money into a broader and more productive sector of the economy. Environmentalism, on the other hand, funds jobs for government bureaucrats along with astronomical fees for private service professionals – people who produce nothing and are motivated by their compensation to perpetually demand additional takings. Such environmentalism is regressive and slows economic growth, it raises costs of living for working people and transfers the wealth to far fewer, far more highly compensated, far less productive individuals. Environmentalism, at its idealist core, too often worships nature and marginalizes the aspirations of individuals, and consequently restricts building activity. Union organizing, at its idealist core, is to care above all for the common man who works to build things that create wealth.

Another crucial distinction between unionism and environmentalism is there is an inevitable end to the need to have unions, because the need for unions will wither away as per capita wealth increases. Since ever-advancing technology and slowing human birthrates guarantee that per capita wealth will always increase, eventually there will be enough overall wealth in the world to provide everyone with basic needs and more. Environmentalism, on the other hand, has no inevitable limit, it must be self regulating. And the more extreme environmentalist policies become, the less wealth we will have. Environmentalist doomsday predictions of resource shortages will likely occur, if they occur, precisely because we stopped developing resources in the name of protecting the environment. Balance has been lost in the discussion – the trump card is the alleged need to stop CO2 emissions – and the zealotry and propaganda mustered today to silence climate skeptics would make Francisco Franco proud, and others, in hopefully not all of their unfortunate worst iterations.

Of course we should prepare for climate change. The climate changes catastrophically all the time, these are called “storms,” and they are perfectly natural. Sometimes, since the beginning of time, we have had “extreme storms,” and this is also perfectly natural. As our ability to mitigate risk to humans increases through technology, our values and our priorities to upgrade publically available human protections increases apace. Of course we need to better prepare for droughts and extreme weather. But we need to do this regardless of whether or not CO2 is causing overall temperatures to increase – and excuse me if, Marquez-like, I would continue with my global warming skepticism where others have stopped. Along with underground HVDC electrical grid upgrades, we should be building freeways and aqueducts and offshore LNG terminals. We should be burying fiberoptic cable and moving electricity conduits underground, and eliminate the visual scourge and dangerous tangle of overhead telephone wires and telecom cables across the old suburbia. There are plenty of union jobs out there waiting to be done, and they create real value, but approving any of these developments requires prohibitive environmental compliance costs – billions and billions and by God, nowadays, trillions of dollars. The fact that unions and environmentalists are in the same political party in America is curious, to say the least.

Gabriel Garcia Marquez also said this, “I have learned that a man has the right to look down on somebody only when he is helping him to get up.” Environmentalists may claim to have this impulse, but unlike the unionists who clearly are empathic with ordinary people, environmentalist policies are now ignoring the needs of ordinary people in favor of elites. The environmentalist mantra ala stopping global warming at any costs will benefit the established oligarchal elites, not the working man, not unionists, not minority activists, nor free thinking liberals. Why then do those who claim to speak for working people continue to embrace extreme environmentalism, when its practice yields results that are opposed to their own core values and goals?  The way the workers will rise economically to the point where unions can willingly wither away will be when we implement infrastructure proposals and public policies designed to make energy, water, transportation and shelter less expensive, not more expensive. This will require reforming environmentalism.

Decoupled Profits & Criminalized Consumption

If that isn’t a recipe for economic and political catastrophe, I don’t know what is. But in the name of fighting climate change, these twin concepts inform radical new government policies being increasingly enacted that will dramatically transform our energy economy, how we use all other natural resources, and by extension, our entire economy.

“Decoupling” profits from production defers investment in new sources of energy, it destroys the incentive to earn a profit in a free market, and it channels innovation into narrow, government annoited channels. “Decoupling” will always harm the consumer. But despite these fatal flaws, it is taking hold as policy. For example, if you produce electricity in California, the LESS energy you deliver, the MORE you make. In California’s legislature and in the U.S. Congress, “decoupling” is being considered for electricity and water. Make no mistake about this, to decouple productivity delivered from revenue collected is a completely different, new, and potentially devastating form of government takings. It inordinately empowers and merges with the government huge sectors of the economy and removes from their mission the necessity to pay their way, to operate efficiently. With most significant previous “takings,” the operator still retained these crucial incentives.

At the same time as our major resource purveyors now propose to “decouple” the value they create from the value they collect, we also are increasingly embracing a new conventional wisdom, if not passing laws, based on the new principle that consuming large amounts of resources is a crime. This emphasis is reflected already in punitive pricing for energy and water consumption over mandated tiers, a practice, similar to cell phone overage charges, where the 10x higher price on the increment amounts to rationing. But criminalizing consumption, as a principle informing public policy, is broader than simply engaging in punitive pricing and can be quite subtle.

With “smart grid” metering, for example, consumers will be expected to either pay punitive rates or accept a utility rationing regime that will include detailed settings regulating maximum allowable volumes of usage, as well as maximum and minumum settings for heat and cold, as well as micro-managed rates of flow per appliance, with the time and volume of usage monitored and recorded – and priced accordingly – at the utility for every appliance in the home. This reality is already well within our technological capability, and in-process legislation will increase utility efforts, including higher government authorized “decoupled” rates, to fund its implementation. In new and retrofit construction, installing IP addressible appliances will become the mandated norm, and if you’re just trying to replace one appliance, forget about that government rebate if the device doesn’t include chips and telemetry.

Fareed Zakaria, a writer who, hopefully, is not consumed more by his ambition than by his obvious powers of observation and keen insight, was refreshingly accurate in June 2009, when, in a Newsweek Essay entitled “The Sky is Not Falling,” reminded us of some reassuring fundamentals. He noted signs the global economic system is proving resilient, and he noted that global conflict, while troubling and tragic, is not spiraling out of control. What Zakaria ignored, for whatever reason, was the third leg on that stool of global stability – the climate is not spinning out of control, nor is it likely to anytime soon.

Climate change is something that should be prepared for. The mistake is to assume there is some dangerous climate trend we must fight to reverse. What we must fight, and where our climate priorities should return, is better adapting and preparing for cataclysmic natural phenomenon – build a sea wall, replant coastal mangrove forests, desalinate sea water, develop aquifers, build and upgrade aqueducts, maybe even build a few green dams or flood basins.

Being ready for existing severe climate events should be the priority – hurricanes, tornadoes, cyclones, tidal waves, floods, and the like – but preparation for these extreme weather events requires an infrastructure investment that environmentalists decry, since it requires massive land, energy and other resource development. According to environmentalists, apparently, the preferred policy to prepare for normal extreme weather is to shut down the economy and hope for benign climate events because we marginally lowered global CO2 emissions. This is pure nonsense, and the fact this is not being seen as pure nonsense should terrify anyone concerned about our future. And not only does environmentalist legislation and litigation stifle conventional energy development, but alternative energy developments via wind, solar, geothermal, biofuel, nuclear – anything deemed “carbon-free” – are also stalled and made prohibitively expensive by environmental activism.

As Steve Milloy points out in his recent book “Green Hell, How Environmentalists Plan to Control Your Life and What You Can Do to Stop Them,” this seeming contradiction is explained as follows, “Greens don’t really want to increase our energy supply – whether with fossil fuels or renewable energy – because that would undermine virtually all of the green’s ultimate goals: zero population growth, limiting the development of physical infrastructure, impeding economic growth, and redistributing wealth.”

The problem with criminalizing consumption is if you take this so called moral value to its extreme iteration, we would all be prisoners – our walking, our travel, our space allotment, our usage of resources – would all be strictly monitored and micro-managed to minimize consumption. Hence we would live behind “urban service boundaries” and we would occupy “cluster homes” and we would aspire to “pedestrian friendly” lifestyles. If we wanted to have more than a few potted plants, we would have to join a government or nonprofit “community garden.” Private gardens and play yards are unsustainable. Cars are unsustainable. Roads are unsustainable. Energy and water use is toxic to our planet. Hence to consume is to commit a crime, but this ignores human aspirations and inventiveness and is tragically short-sighted.

The problem with decoupling profits from productivity and criminalizing consumption is that it necessarily increases government control, in collusion with powerful special interests in business, labor and finance, over private property ownership and entrepreneurial license. In its extreme iteration this leads to tyranny, and in all its forms, mild or severe, it is regressive and hurts the emerging, the upwardly mobile; it denies the inevitable and freedom-loving, evolutionary forward progress of civilization.

Mid-Grid Water Systems

It is common to think of the “grid” as pertaining to energy, electricity in particular. But just as oils and gasses flow through pipelines, and those pipelines are also parts of the energy grid, so water infrastructure can be considered a grid. Water is as fungible as energy.

And just as centralized energy and water infrastructure are known as the grid, then independent energy and water systems are described as “off-grid.” But the engineering and political economy of the “mid-grid” ecosystem for energy and water production and management is where the market is heading. The primary reason for this is the inability of grid operators – the public sector and their powerful corporate partners – to remain competitive, and deliver energy and water to humanity at a price-point that reflects today’s advanced capabilities. Technology is a river, creating options against all obstacles.

A good example of a mid-grid system is an aircraft carrier. Energy and water are produced in very high quantities, but the carrier has no permanent utility interties. Another example would be a huge resort on a remote and isolated shore of the ocean. By these criteria, one definition of a mid-grid system is an energy and water infrastructure that can fulfill these resource needs for 1,000+ people indefinitely, with only limited access to the global energy and water grid.

Another way to think of mid-grid systems is to define them as intermediaries between individual property owners and their government regulated public utilities. The mid-grid infrastructure would buy and sell energy and water to the public utility, while producing and storing large quantities of energy and water on their own, and while distributing this energy and water to their clients.

Not only can a mid-grid entity provide a physical infrastructure, but also part of the mid-grid ecosystem are virtual service providers, who, for example, buy, hold, and sell energy and water for select clients. Typically, to be known as a “mid-grid” virtual services company, these financial entities would specialize in packaging the innovations and investments of actual mid-grid scale energy and water producers. In this manner mid-grid financial entities could provide property owners a hedge against punitive government schemes to artificially increase the prices for energy and water.

It isn’t hard to imagine what these mid-grid companies would look like, because there are too many vivid examples. A company that trucks water from a farmer’s irrigation canal – with the enthusiastic consent of the farmer, who sells this water – to water-starved homeowners in heavily regulated cities. A privately-owned water runoff cistern utilized by several neighbors, or, similarly, a thermal energy hot point or cool point.

A mid-grid company could be an unleveraged solar power producer who sells their surplus power to their neighbors, pocketing the profits as a real return on investment in these uncertain times. For that matter, a mid-grid company could simply be a propane delivery truck operating in areas previously uncompetitive. It is not possible to create artificial scarcity in a world of adaptable humans. The river of technology carves its way, naturally and inevitably, into the future.

The mid-grid can span the gargantuan gulf between big-grid tap water and off-grid bottled water, and in the process deliver options that avoid weaknesses of either standard. A product accomplishing this goal can be as simple as a tap water filtration system – a pitcher or a faucet attachment – or a more comprehensive system. Such a system, for example, would harvest all rainwater runoff, grey water and sewage output on the property, treat and store this water, then consume it or sell it to neighbors.

The mid grid can also span the chasm between atomized units of alternative energy – photovoltaic collectors, solar water heaters, wind generators, geothermal convection systems, thermal management systems, etc., etc., etc. – and integrate them into a total energy storage and management system that can, again, harvest all energy present on the property, treat and store this energy, then consume it or sell it to neighbors.

It isn’t fair, of course, to point fingers at the government or corporations, or even their collusion. Because not only is technology an unstoppable river, but also freedom. The fortuitous fate of humanity is that we evolve, in all ways, and there are best and worst in every time. And it is the turbulent market that brokers our ideas, bestows our individual freedom, bequeaths upon us better lives through better technology, and flows like the river.