Free to Choose Means Less Freedom: Obama on Birth Control

The Times The Freedom to Choose Birth Control convolutes common language and fails to comprehend fundamental economics. It says that “free access (to birth control for any woman), along with the ability to receive family planning and preventive health services, was at the foundation of health care reform.”  I did not know that. As I recall, Obama did his best to dodge that issue during the non-debate over his health care reform.

Most of us interpret “free to choose” in Milton Friedman’s sense. In a market economy, we are free to choose among alternatives. As long as we are prepared to pay the market price, we can buy whatever car, food, movie ticket, laptop, or anything else we want. No one can dictate to us how to choose among alternatives. That is our business, and Friedman considered this the cornerstone of economic freedom.

Obama, apparently, understands “free to choose” differently. In his version, free to choose means getting goods and services without paying. Even though birth control is a regular non-catastrophic expense, probably not higher than feeding a daily coffee habit, women are not free unless they have it free.

In Obama’s mind there are certain goods that must be supplied to us free of charge in order for us to be free. Insofar as no business can afford to part with its goods and services free, the state must dictate an arrangement that provides them to the customer at no out-of-pocket cost.  The state can only do this by mandates that force providers, insurance companies or anyone else involved to do something they would not do on their own.

The freedom to choose birth control (at a zero price) represents a loss of freedom.

Why stop at birth control? We should have the freedom to communicate. We should receive cell phones with unlimited minutes for free. Until we have Obama’s grand public transport system, we should have the freedom to move freely between point A and B. The state should dictate that every person get a free car, as long as it runs on electricity. The same applies to food, electricity, and gas. Why not? Why not admit those lacking in communications, gas and food “freedom” unlimited access to Wal-Mart. After all Wal-Mart exploits is employees and deserves it. Just throw open the doors and shut down the cash registers.

The freedom to have life’s essentials free of charge represents a loss of freedom. I assume Obama understands this and is doing it deliberately.

In my Essentials of Economics classes I used to ask students to consider what would happen if we gave things away free. The correct answer was chaos, followed by state rationing. I think the New York Times editorial board would flunk my exam.

Will the New York Times Publish These Results?

"NEW YORK -- The majority of economists surveyed by the National Association for Business Economics believe that the federal deficit should be reduced only or primarily through spending cuts.
The survey out Monday found that 56 percent of the NABE members surveyed felt that way, while 37 percent said they favor equal parts spending cuts and tax increases. The remaining 7 percent believe it should be done only or mostly through tax increases."

Where is the Keynesian consensus the mainstream press writes about?

On the day this survey was released, the New York Times  published two interviews with fund managers (I guess they represent everyone) saying we need to spend more now and save later.

Has the New York Times Aided and Abetted A Crime? Environmentalists, Goat Farmers, and Market Manipulators

When I posted my June 30 article: “Why the NYT-Liberal Assault on Shale Gas? How About the Volt?”, I interpreted the NYT’s attack on natural gas fracking as a political diversion. It was time to hit “Big energy” again, only this time, it was “Big Gas.” I wondered why the NYT was so worried about investors in oil shale projects, in low energy prices, and black churches that had been duped by promoters.

I took the series of NYT articles seriously, read the e-mails quoted,  and wrote about the natural uncertainty associated with new technologies. I was shocked, to say the least, to read Jon Entine’s article, “Natural Gas ‘Bubble’ Report: Market Tinkering or Shoddy Reporting?”

In a real example of investigative journalism, Entine discovered that, of the two “named” NYT sources, one is an investment advisor (and long-time critic of gas fracking), listed as a “geologist,” whose firm and clients possibly stood to gain from speculation against shale oil stocks.

The other quoted sources, who the NYT lists as  an “Advisor” to the Dallas Fed, is a goat dairy farmer (on some citizen advisory board of the Dallas Fed) who has tangled with a natural gas company, accusing it of causing environmental damage to her farm. The NYT failed to report this as well as her membership on the steering committee of the Oil and Gas Accountability Project at  Earthworks, an anti-shale-gas advocacy group. It appears she lectures against gas fracking around the country.

The NYT’s sources are unnamed, but judging from their excerpted e-mails, they are simply stating the obvious, that this is a new technology and we do not know what the future will bring. I address in my post the e-mails that speak to the difficulty of estimating reserves in the presence of a new technology. We cannot know economically-recoverable reserves without knowing future prices, which we do not.

Anti-gas fracking democrat members of Congress have called for hearings. With the disclosures in Entine’s article, it now appears that hearings are necessary. The New York Times should be one of the first witnesses to testify given the possibility of market manipulation.

 

For Entine’s article, see:

http://www.realclearpolitics.com/articles/2011/07/01/natural_gas_bubble_report_market_tinkering_or_shoddy_reporting.html

For my earlier post, see:

http://paulgregorysblog.blogspot.com/2011/06/why-nyt-liberal-assault-on-shale-gas.html

Why the NYT-Liberal Assault on Shale Gas? How About the Volt?

The New York Times has devoted more than four thousand words to the impending crisis of shale gas over the past four days. The attack began with a full-page investigative report in its Sunday edition. The barrage continued and Wednesday’s edition featured calls by Democrats for Congressional investigations.

You would think the NYT and its Congressional supporters would welcome a new technology that increases domestic energy, lowers the price of a clean fuel, turns us from an importer to an exporter, and creates new jobs.

Why this all-out assault? They need to rub “Big Energy’s” face in the mud in the mainstream press and the halls of Congress to divert attention from real problems.

What is the beef?  According to the NYT and Congressional Democrats, the evil energy giants have hatched another nefarious plot to dupe the gullible Federal Energy Information Agency, uninformed investors, and the general public into accepting an “irrationally exuberant” picture of the industry.  

E-mails obtained through open-records worry that gas “may not be as easy and cheap to extract from shale formations, and that  companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves.” The NYT praises skeptics “who question endorsing shale gas without understanding its economics.” They even complain “that dozens of black churches in Fort Worth signed leases on the promise of big money,” risking their tax exempt status.

This frontal assault on shale gas shows a profound lack of understanding of technology, economics, business, and energy.

Extracting gas from shale is a new technology that combines two established technologies – horizontal drilling and water flooding (which has been used at least since the 1950s and has not polluted our drinking water yet). As a new technology, we have no history to predict the future. Even with the best and most honest of efforts, we do not know how to extrapolate reserves from existing wells, and what the eventual extraction costs will be.

With such uncertainty, there will be a wide variety of estimates of reserves, some optimistic, some pessimistic. No one knows the truth at this point. There is nothing sinister on the part of those who choose to be optimists. All major innovations are made by optimists, not pessimists.

The reserves of any underground resources that can be economically extracted depend on prices now and in the future. If gold rises to $5,000 per ounce, there will be a new gold rush in the United States. The problem is that we do not know the future prices of natural gas. All we know is that it has fallen dramatically since shale oil extraction began. As long as we do not know the future price, there is no way to know the amount of reserves that can be extracted at a profit.

Presumably investors worth their salt know these two facts. They also know enough not to rely on a federal bureaucracy to make their investment decisions. After all, shale gas companies are not selling shares at Wal-Mart. Investors who are optimists will invest. Pessimists will not. Technology and market forces will decide who is right, not the NYT or Congress.

The NYT attack ends with a truism: “If natural gas ultimately proves more expensive to extract from the ground than has been predicted, landowners, investors and lenders could see their investments falter, while consumers will pay a price in higher electricity and home heating bills.”  Yes, if shale gas is a bust, investors will lose and prices will be higher, but what’s new? Why all the fuss? Why should this be Congress’s business?

My two pieces of advice:

First, to the natural gas industry: Avoid at all costs federal subsidies of cars powered by natural gas. This will give the federal government the right to stick its nose into your business.

Second, to the NYT and democratic members of Congress: Obtain e mails of internal discussions of the Volt or of lithium battery manufacturers to see whether  investors, taxpayers, and consumers are being sold an “irrationally exuberant” picture. I may have to wait a long time before the NYT takes me up.  

David Brooks’ Country-Club Valedictory: It Is About You

“Conservative” David Brooks’ column “It’s Not About You” (NYT May 30) is incomprehensible fluff until you realize its audience.

Let me quote some key passages to illustrate:

“This year’s graduates are members of the most supervised generation in American history… they have been monitored, tutored, coached and honed to an unprecedented degree. Most will spend a decade wandering from job to job and clique to clique, searching for a role. No one would design a system of extreme supervision to prepare people for a decade of extreme openness.”

So we learn from Brooks that today’s graduates, the “most supervised in American history,” are being thrust into a “decade of extreme openness.” My own impression is that today’s latch-key, single parent, web-surfing, text-messaging graduates are among the least supervised in history. I must admit I do not understand Brooks’ “decade of extreme openness.” Graduates, it appears to me, are just entering the uncertain job market characteristic of a weak economy.

After some serious thought about who might read this column, it began to make more sense. By “graduates,” Brooks has in mind graduates of elite institutions, not college graduates in general. It is they who have been “monitored, tutored, coached and honed to an unprecedented degree.” Their mothers competed for slots in elite toddler academies in Manhattan or Cambridge. It is they who have been coached and tutored in preparatory academies and by SAT coaches. They have been “honed” for admission to Stanford or Harvard.

Graduates of state schools and, even worse, junior colleges do not fit into Brooks’ picture of the country-club elite. I guess they are not the ones who count.

Now these “supervised” graduates are being thrown into a cruel world of job insecurity and, gasp, “team work.” No longer does a secure spot in Daddy’s Lehman Brothers await them.

Brooks’ advice: Instead of focusing on “finding yourself,” find a cause – a problem to solve. “It’s the things they did to court unhappiness — the things they did that were arduous and miserable, which sometimes cost them friends and aroused hatred. It’s excellence, not happiness, that we admire most.” So the greats of the past succeeded because they were willing to be miserable and friendless. They did not become great through the joy of discovery, invention or entrepreneurship.

If I had taken out student loans to graduate from a good university with a meaningful degree and David Brooks delivered this as the commencement address, I would have asked for my money back.