Sunday, February 19, 2012

Politicians don't make sense to me

Rick Santorum seems to think that energy consumption is a good per se. That is simply not true. It is better to have an energy efficient house than to pay more for heat and air conditioning to have the same comfort level in a house with poor energy efficiency. It is better to travel in a well tuned car getting good gas mileage than to travel in a gas guzzler with no advantage in safety or comfort. Energy is something that you pay for and use in order to achieve some end. If you can achieve the same end using less energy, that is all to the good. Moreover, there are external costs to using energy. Greenhouse gas emissions contribute to global warming which it a grave problem for future generations. Consumption of oil and oil products makes our balance of payments problem worse while increasing our dependence of foreign governments that control oil exporting countries.

A unnamed  White House official apparently thinks that the Congress has already passed the only important legislation for 2012. How about the federal budget for the fiscal year that starts in September 2012? That budget debate will define the way the government operates for a year. It is especially important because that budget debate will be the opening shot in determining the capabilities of the military after the ends of the wars in Iraq and Afghanistan and in view of Arab Spring. It will also be significant in terms of the federal deficit, and thus the rate of growth of the economy, the rate of growth of the federal debt, and such things as the balance of payments deficit.

An unnamed Republican spokesman seems to think that small businesses generate employment. They also destroy jobs. The concern is the net employment growth rate.
For the U.S. private sector, the BDS show that the average annual gross job creation rate over the 2000-2005 period is 16.4 percent of employment and that the average annual gross job destruction rate over the same period is 15.1 percent. Hence, the net employment growth rate for the U.S. private sector in any given year is accounted for by some establishments growing at a high rate while another group of establishments are contracting at a high rate.  [CES pdf]
If you look at the local strip mall, whenever you see a new business occupying one of the buildings, it is because a business that once occupied that space is now gone. 

No comments: