Discover more from This Week at The Pipeline
Boomer Bust; OMB's Green Discount; & Canada's Native Abuse
In his Editor’s Column this week, Michael Walsh meditated on the “cold civil war” which his own generational cohort helped get off the ground and have continued to wage for decades.
When the first wave of Baby Boomers reported for kindergarten duty in the early/mid 1950s, they got a shock that has lasted throughout their – our – lives. Waiting for them were tens, dozens, scores of other kids in their classrooms, each one ready to eat your lunch. Welcome to the politics of scarcity, kids.
American families tended to be large in those days (women had not yet fully entered the workforce, and so could attend to their primary duty of birthing and raising the next generation), but the sheer numbers of the cohort was still a shock. In the ensuing years, the Boomers gradually realized they would be competing against each other for the rest of their lives for advancement, prestige, power, sex, and money. If they had to claw their way to the top and fend off all who would try to take their throne as King of the Generations, so be it.
Then they came of age during the revolutionary Sixties. They chose up sides. Woodstock hippies vs. the Ohio National Guard at Kent State were the shots heard 'round the world. Mutual loathing burgeoned and increased. Politically, the nation split in half: Nixon over McGovern; Carter over Ford, Reagan/Bush over Carter and Mondale; Clinton over Bush and Dole; Bush Jr. over Gore and Kerry; Obama over McCain and Romney; Trump over Clinton; Biden (!) over Trump. The dreary litany of the Zeitgeist continues apace, and yet here we remain, in Zugswang forever.
Some years back, writing as my deracinated lefty character "David Kahane" in the pages of National Review Online, I coined the phrase "the Cold Civil War" (often incorrectly attributed to my friend, the late Angelo Codevilla, but he got it from me). My thesis:
Despite all the evidence of the past several decades, you still have not grasped one simple fact: that, just about a century after the last one ended, we engaged in a great civil war, one that will determine the kind of country we and our descendants shall henceforth live in for at least the next hundred years — and, one hopes, a thousand. Since there hasn’t been any shooting, so far, some call the struggle we are now involved in the “culture wars,” but I have another, better name for it: the Cold Civil War
Your side admired strength, resolve. and purposefulness; we were stuck with weakness and indecision. You saw the world as something to be conquered; we saw the world as a hostile force needing to be appeased. You dealt with life head-on, never complaining and never explaining; we ran home and told our mommies. Think of us as Cain to your Abel, hating you from practically the moment we were born, hating you for your excellence and your unabashed pursuit thereof while we were the ugly stepchildren. Well, Cinderfella — how do you like us now?
Today, we are cock of the walk, king of the world, all our vices are made virtues, and all us sinners, saints. While you were out trying to make your way in the world, earning a living, being responsible, raising a family, paying your taxes, we infiltrated your every institution: the schools, the law, Hollywood, the culture, the government. We learned to train your own weapons upon you and, while you weren’t looking, we shot you in the back with them.
That was an excerpt from my book, Rules for Radical Conservatives, published in 2010. How right was I? Don't bother answering, because the evidence is all around us. From the safe and secure world of the Boomers' childhoods (until the Cuban Missile Crisis of 1962, nobody ever really believed the Rooskies would drop the Bomb on us) to the present mishegoss of open borders, "identification," black urban lawlessness, violent white storm troopers calling themselves "Antifa," a weaponized FBI, IRS, and Justice Department all in service to the Democrat Party and its senile, resentful president, an intelligence community now openly boasting about they can affect domestic political politics by planting disinformation, men competing in drag in women's sports, and tranny chic, the norms of post-war America have been shattered beyond repair, and we have to live in the resultant mess.
Steven Hayward gave us a helpful lesson in environmentalist economics.
Biden’s Office of Management and Budget (OMB) has issued new guidance for performing cost-benefit analysis of regulations. The key change in the guidance is lowering the “discount rate” government agencies should use from 3 percent to 1.7 percent. I know—you’ll need to contain your outrage, and resist the urge to rush to the barricades.
Although the use of discount rates has been essential to mainstream financial and economic analysis for more than a century, it is arcane to the general public. Discussion of the issue puts people to sleep, and thus only takes place among economists, who, the old joke goes, are people who lack the personality to be accountants. But this is a hugely important technical question, in this instance being driven by politics rather than sound economic analysis.
The significance of the Biden proposal for a 1.7 percent discount rate is simple: the Left wants to be able to claim huge economic benefits from costly and onerous regulations including requiring expensive electric cars, replacing natural gas stoves and furnaces, putting solar panels and windmills from sea to shining sea, not to mention lots of other regulations from other government fiefdoms. But it requires understanding why fixing the discount rate—already unrealistically low at the presently-used 3 percent—is necessary for this shell game to work.
One simple way to understand how a discount rate works is to ask yourself if you’d prefer to have $1 today, or $1.10 a decade from now. The answer depends on your discount rate. At the Federal Reserve’s 2 percent target rate of inflation (inflation is a good baseline for settling on a discount rate), to have the same purchasing power ten years from now you’d need to have $1.22 to stay even. Thus having $1 today is better than $1.10 a decade from now. Today of course inflation is running much higher than 2 percent. If we averaged only 5 percent inflation for the next decade, you’d need $1.63 to have the same purchasing power as $1 does today.
The analysis is reversed somewhat when analyzing present costs against future returns, whether for capital investment or determining whether government regulations will provide net economic benefits. The question of what discount rate the government uses has been central to climate policy for two decades now.
When it comes to "climate change," conventional economics has been an obstacle to the world-changing dreams of the activists. All of the “consensus” climate forecasts claim that unchecked global warming will impose large economic costs, but not for more than 50 years from now or longer. So how much should we spend today to prevent the high future costs? Using any realistic discount rate, the answer comes back: very little, because a dollar today is worth a lot more than a dollar 50 years from now.
Here's a simple example: if you assume $1 billion in climate costs 50 years from now, how much should you spend today to avoid that cost at the present 3 percent discount rate? The answer is $228 million. But at a 1.7 percent discount rate, the answer is much larger: $430 million.
You can see where this game is going: with a realistic discount rate, most of the billions and billions we are spending for green energy and other climate-driven causes will badly fail a cost-benefit test. Only by using an absurdly low discount rate will the huge costs of the climate crusade seem economical. The talking point goes something like this: “Yes, this project will cost $1 billion, but it will avoid $2 billion in costs down the road [50 years from now],” relying on the innumeracy of the public not to see through the flim-flam. (This assumes, of course, that projected costs of future global warming are reasonable in the first place, but that dubious contention is a subject for another time.)
Peter Smith gave us some advice about how to best engage in climate debates.
Talking to a conservative friend the other day. OK, I admit it. Outside of church, I only have conservative friends. I’ve ditched any others or they’ve ditched me. Can’t do too much about wet Anglican churchgoers, they come with the territory. Anyway, he said, what’s wrong with a bit of warming. Surely that’s a good thing? It is indeed. For a start, many more people die of cold than of heat. But I noted that my friend talked about warming without at all identifying the source of this warming. It could be inferred, and reasonably in context of the current hype, that he was talking about warming generated by man-made CO2. Implicitly ceding part of the premise of climate hysterics.
Another friend ups the ante in ceding the premise. He has disengaged from debating the science and solely focuses on the ineffective and ruinous things being done to combat "climate change." Perforce, this takes the debate to the fashionable idea of using small-scale nuclear power plants, aka small modular reactors (SMRs).
SMRs provide reliable power. As required, they can be linked up. And they can be located close to where power is needed. Marvelous, to be sure; as are motorized wheelchairs for elderly people who have difficulty walking. But such chairs are redundantly expensive if you can, in fact, walk without difficulty. Equally, SMRs are redundantly expensive if coal, oil or natural gas is readily, conveniently, and cheaply available. That’s certainly the case in Australia, as it is the United States and Canada.
Ergo, SMRS are better than sliced bread if you are in short supply of accessible and affordable hydrocarbons. Otherwise, if the market were to let rip, you’d probably find investors in SMRs going to pastures unendowed with close-by coal, oil, or gas. Unless, that is, man-made CO2 emissions are actually, after all, a serious problem. Then, of course, SMRs come into their own.
At this point, implicitly ceded is not only that a "climate-change" emergency is underway, but that man-made CO2 is the primary cause. Best not to go there. Best not to provide a scintilla of support for a highly tenuous scientific hypothesis primarily promoted on the public stage by assorted oddballs and know-nothings. By honorary doctor of theology Greta Thunberg, by Prince (now King) Charles, by Al Gore, John Kerry, Tim Flannery (worth a mention for predicting in 2007 that Australia's since overflowing dams would never fill again), by the U.N.'s António Guterres, by Leonardo DiCaprio and the Hollywood set, and by public broadcasters and TV weathermen, etc.
To that end, Tom Finnerty blogged about an important — if fairly technical — new study which flies in the face of the prevailing climate change narrative.
Finnerty also blogged about a report comparing conflicting Biden Administration projections and mandates related to electric vehicles.
Elizabeth Nickson contributed a very personal piece about how Canada’s socialist policies keep it’s native population in squalor.
Today, if you protest the current catastrophic regime and have anything that can be taken away, it is taken away, and your family are labelled racists. Tenured professors who raise any objection are disgraced. Any journalist who asserts inconvenient facts is slimed. Any public intellectual who attempts to turn the tide is sent to the margins and silenced.
Many of the current activists for native rights are relatively new to the country, and have little grasp of history other than the straight-up Marxism taught in schools. Because Canada is so thoroughly anti-business, agitating for government money is pretty much the only growth industry, and Canada’s natives are a rich fat pie that seems unending in its ability to feed the bureaucracy and the advocacy outfits – there are hundreds - that seek more and more and more guilt money from the Canadian people.
Not one of them seemingly ventures into a native reserve to experience the results of fifty years of Trudeau Sr’s native policy and talks to the people there. Of the 700 or so Indian “nations" -- this moniker a laughably Marxist ploy in itself -- few of them even have vegetables. I have spent nights on a reserve up in the north where stodge is the only food. Potatoes fired in oil that has been in use for weeks. Gristly meat. Stale Wonderbread. Recently $8 billion was given to natives because despite the budgeted $200 Billion over five years given to Indian Affairs, in a country with more water than any other country on earth times ten, Indian reserves have no clean water.
Stories are told in my family, of Mohawk camping on the kitchen floor, leaving in full dress and full war cry in order to thrill the children. We have lost this connection to a great and fascinating people, marooned on rotting reserves, a crime caused by a vicious socialist government using vulnerable people to steal the nation's wealth.
I have been on a reserve where the houses are rotting from the inside. Everyone is sick with mold illnesses. Because Canada’s socialists have deemed that natives have no property rights and are therefore not, in fact, fully people, they can’t even legally fix their own houses, not that they have any money but from whoring and working as check-out clerks. You cannot start a business. You have no equity to borrow even $1,000 to start a business. Canada’s socialists have decided that Canada’s natives are the ideal citizenry, passive, dependent, degraded.
Other reserves I’ve visited abut enormous wealth, from which Indians are constrained. Every activity they undertake requires a permission slip and money from whatever sleazy bureaucrat supervises them, owns them, farms them. Their reserves run to brush and fire fodder, while across the road, fields and forests produce incredible riches.
Thanks for reading, and keep a look out for upcoming pieces by Joan Sammon, Clarice Feldman, and Peter Smith. All this and more this week at The Pipeline!