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Mean Greens

By Owen Paine on Thursday June 26, 2008 12:27 PM

Something there is in me that hates a windfall, that wants it downed. Its the damnable inefficiency of it all that galls my cold, three sizes too small heart, not the inequity of it; not the upward bound "wealth transfer" greedhead orgy of it.

Well, not really.

May I suggest this line of reasoning to you green goblins to munch along with the morning latte? You want reduced consumption of oil -- fair enough; but you're great believers in some variant of wealth as equal as possible too, aren't you?

Now you guilt-drenched strivers, then ask yourself this: Is there today a long run real price of crude that maximizes the rate of adjustment? And if there is -- if there's a price beyond which we're just shooting extra superfluous cash at the corporate swine -- then are we at it, above it, or below it?

I say we're above it, cellmate -- well above it. And I say remember the little folks. Don't we need to factor out any global economy-wide slowdown effects on total consumption these hypothetical uber-plus price hikes might lead to? Shouldn't starve-the-beast strategists avoid setting up a a regular-guy deparment? Even Malthus had his limits. In other words: the income effects on total household consumption of everything including oil need to be compensated, don't they?

As the late Sir Johnny Hicks might say: to substitute is divine but to consume is human.

Here's a brief overview of Johnny's nice distinction.

To cut to the chase: just what might the crude price be that would maximize the adjustment rate? My guess: 60 to 80 dollars oughta be more than enough to sustain the development and production of alternative sources of energy. Anything higher is pure windfall -- a serious production of pleb-prole misery gone to waste.

Comments (14)


Owen, it's not clear to me why there needs to be an optimum figure that maximizes the "adjustment rate" (if I understand what you mean by that term). What if the adjustment will happen faster the greater the pain? I suppose the curve will tend to flatten as it rises -- but where's the case that it's not monotonic?

The still-greater green sin is the continued phantasma-Gore-ian belief in "better cars" and "alternative fuels."

As alt-car pimp Amory Lovins says, to car to work or the mall is to cut butter with a chainsaw. But what McLovins fails to add is that drop the auto from 2 tons to 1 merely shrinks the chainsaw.

And alt-fuels ain't coming. We might -- might -- be able to sustain an electric grid on wind, water, and sun, but biodiesel and ethanol have negative EROEIs. They are the ultimate pranks on "green" shoppers.

"El socialismo puede llegar sólo en bicicleta."



the link is to my latest crush
he has some answers folks

plato's cave:

Jonathan Nitzan and Shimson Bichler have explanation of periodic oil price rises. Their stuff is at york.edu.

Not being an economist, or academic of any kind, I can always reason by analogy: this all happened once before, in the 70's. What was the effect of all that inflation, and that decade of high interest rates to quell it? Someone made out like bandits, and they're probably going to again. I believe it's called creative destruction!


mjs in reality you're quite right
there is no maximum finite rate of adjustment

but let us say the curve looks
like a sharp as hell log function
the gain in adjustment speed slows hugely above some price

but lets claim not only montonia
but a fairly gradual slow down
so what makes the calc on of
adjustment optimality not maximality

other considerations of a social welfare nature

trade offs
as lord robbins was wont the chime
always trade offs
enter control theory and some optimal path that saddle points us along
---absent high probablity of planet death if
adjustment not at rate x ...-----

but that's thru the lokin glass stuff...

institutional arrangements matter

as in
for profit energy firms
up to the neck in oil extraction investments

our future green soviets' gosplan

here i'm assuming the oiler/coaler trans nats exist and if not obeyed at least
must be utilized or neutralized or neuered or ...
by our hero
uncle sam green thumb
a tax per carbon unit sounds great
one that slides up and down with crude market price to keep final user price optimal adjustment rate wise ...
so long as its combined with a wind fall profit tax

recall we needn't rejoice
that pumping oil makes so much long run profit
the cheney chimp type
bastards will drill for more and more and more


i guess i need only say
never willing let the devil do your dirty work

he'll invariably do it his way
and despite the task getting completed
and u less one aweful monster
he'll dobtless put you
in a brand new hell hole by doing it

But what McLovins fails to add is that drop the auto from 2 tons to 1 merely shrinks the chainsaw.

Look, this is really pedestrian, but aren't we needlessly adding cars (particularly in the last 20 years) like crazy.

In my neighborhood, every freaking teenager above the age of 16 has a car. Every one. The HS parking lot is full to overflow. And this is repeated across America (us that famously consume more than our share of the global energy pie, than rant about the Chinese and Indians).

Now, I understand that cars aren't the largest consumers, but when it comes to the significance of $4 gas, it is germane because those teenagers add to the needless consumption, add to insurance costs, add to infrastructure.

Oh, to pine for the one car household that's supplemented by a robust public transportation system...


What price of crude do I want? As high as the market can bear. And then triple that.


What price of crude do I want? As high as the market can bear. And then triple that.


ts.. you want to punish homer and chester bubba and vinny ????

trigger a global depression

i'll show you how


we ought to have in place a plan here folks
if we want to fast track the carbon nix

the oil folks gauging us is not a plan

we need mechanism
that allows prices to go heaven ward
while uncle captures the proceeds and recycles em to the hoi polloi as checks

we need a ration system too to deal with infra marginal purchases
keeping the marginal market price for the cut back edge

we'll need taxes for this and a suppliers fair pricing board
and and
a set of performance regs on new product

and a rush to alternatives

job one

squeeze out all the wind fall rent in these
trans nat inc administered prices
and dividend it back to households
and distribute ration stamps for winter heating


such a first 100 hundred days next winter
could be fun

this shit we got now
just bashing the bobos
to fill crporate pockets
will lead to ....drilling
more longer sturdier ...
corporate wind fall "incentives"

plato's cave:

Well said, OP!

However, it looks like we're in the clutches of a bi-partisan, neo-liberal strategy which says grab all the oil everywhere at any cost so that no one can challenge the Atlantic hegemon, and we'll clean up the mess later.

I dont really get it, but the logic seems to be, destroy a large chunk of the current accumulated capital of the world, and end up with a bigger percentage of what's left.

Son of Uncle Sam:

Really it's quite simple. The average american lives in the catacombs of poppa's plastic pockets. Only after some level of destruction does one find sound resolution.
It only makes good common sense to enter ANWR area 1002, destroy everything, and get some temporary relief. If I were up to my ears in credit card debt, why not hit the old retirement account? A few successful spins of the roulette wheel can off set that potential loss.
Forget all this going green hype. It's has anti-american as a vegan.
If you people want to do something for your country instead, buy american. Don't tell me mommy can't have a Denali because of fuel prices.
And as for the earth, nature will fix it self, always will always has. Some thing has to take one for the team!


son of u sam

"Some thing has to take one for the team! "

couldn't have said it better

even after a scotch and soda

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