If you want to understand why our financial system collapsed, and why the fixes they have put in place are going to fail, you have to read the column pasted below, which ran in the WSJ Weekend Edition.
The Man Who Predicted the Depression
Ludwig von Mises explained how government-induced credit expansions led to imbalances in the economy.
By MARK SPITZNAGEL
Ludwig von Mises was snubbed by economists world-wide as he warned of a credit crisis in the 1920s. We ignore the great Austrian at our peril today.
Mises's ideas on business cycles were spelled out in his 1912 tome "Theorie des Geldes und der Umlaufsmittel" ("The Theory of Money and Credit"). Not surprisingly few people noticed, as it was published only in German and wasn't exactly a beach read at that.
Taking his cue from David Hume and David Ricardo, Mises explained how the banking system was endowed with the singular ability to expand credit and with it the money supply, and how this was magnified by government intervention. Left alone, interest rates would adjust such that only the amount of credit would be used as is voluntarily supplied and demanded. But when credit is force-fed beyond that (call it a credit gavage), grotesque things start to happen.
Government-imposed expansion of bank credit distorts our "time preferences," or our desire for saving versus consumption. Government-imposed interest rates artificially below rates demanded by savers leads to increased borrowing and capital investment beyond what savers will provide. This causes temporarily higher employment, wages and consumption.
Ordinarily, any random spikes in credit would be quickly absorbed by the system—the pricing errors corrected, the half-baked investments liquidated, like a supple tree yielding to the wind and then returning.
But when the government holds rates artificially low in order to feed ever higher capital investment in otherwise unsound, unsustainable businesses, it creates the conditions for a crash. Everyone looks smart for a while, but eventually the whole monstrosity collapses under its own weight through a credit contraction or, worse, a banking collapse.
The system is dramatically susceptible to errors, both on the policy side and on the entrepreneurial side. Government expansion of credit takes a system otherwise capable of adjustment and resilience and transforms it into one with tremendous cyclical volatility.
"Theorie des Geldes" did not become the playbook for policy makers.
The 1920s were marked by the brave new era of the Federal Reserve system promoting inflationary credit expansion and with it permanent prosperity. The nerve of this Doubting-Thomas, perma-bear, crazy Kraut! Sadly, poor Ludwig was very nearly alone in warning of the collapse to come from this credit expansion. In mid-1929, he stubbornly turned down a lucrative job offer from the Viennese bank Kreditanstalt, much to the annoyance of his fiancée, proclaiming "A great crash is coming, and I don't want my name in any way connected with it."
We all know what happened next. Pretty much right out of Mises's script, overleveraged banks (including Kreditanstalt) collapsed, businesses collapsed, employment collapsed. The brittle tree snapped. Following Mises's logic, was this a failure of capitalism, or a failure of hubris?
Mises's solution follows logically from his warnings. You can't fix what's broken by breaking it yet again. Stop the credit gavage. Stop inflating. Don't encourage consumption, but rather encourage saving and the repayment of debt. Let all the lame businesses fail—no bailouts. (You see where I'm going with this.) The distortions must be removed or else the precipice from which the system will inevitably fall will simply grow higher and higher.
Mises started getting some much-deserved respect once "Theorie des Geldes" was finally published in English in 1934. It is unfortunate that it required such a disaster for people to take heed of what was the one predictive, scholarly explanation of what was happening.
But then, just Mises's bad luck, along came John Maynard Keynes's tome "The General Theory of Employment, Interest and Money" in 1936. Keynes was dapper, fresh and sophisticated. He even wrote in English! And the guy had chutzpah, fearlessly fighting the battle against unemployment by running the currency printing press and draining the government's coffers.
He was the anti-Mises. So what if Keynes had lost his shirt in the stock-market crash. His book was peppered with fancy math (even Greek letters) and that meant rigor, modernity. To add insult to injury, Mises wasn't even refuted by Keynes and his ilk. He was ignored.
Fast forward 70-some years, during which we saw Keynesianism's repeated disappointments, the end of the gold standard, persistent inflation with intermittent inflationary recessions and banking crises, culminating in Alan Greenspan's "Great Moderation" and a subsequent catastrophic collapse in housing and banking. Where do we find ourselves? At a point of profound insight gained through economic logic, trial and error, and objective empiricism? Or right back where we started?
With interest rates at zero, monetary engines humming as never before, and a self-proclaimed Keynesian government, we are back again embracing the brave new era of government-sponsored prosperity and debt. And, more than ever, the system is piling uncertainties on top of uncertainties, turning an otherwise resilient economy into a brittle one.
How curious it is that the guy who wrote the script depicting our never ending story of government-induced credit expansion, inflation and collapse has remained so persistently forgotten. Must we sit through yet another performance of this tragic tale?
Mr. Spitznagel is the founder and chief investment officer of the hedge fund Universa Investments LP, based in Santa Monica, Calif.
Tuesday, November 10, 2009
Political correctness can be deadly
The real story is taking shape now. I think it is clear enough to be stated:
The Army had a jihadist Muslim in its ranks. A traitor whose allegiance was to Islam first. Further, he let it be widely known, through his words and actions, that he thught the war on terror was a war on his religion, and that he thought infidels should be murdered.
But these in-plain-sight warning signs were ignored. His fellow students in his master's program didn't file complaints because they were afraid of appearing discriminatory. TWO investigations into his conduct and his correspondence were dropped.
He kills thirteen fellow soldiers and wounds 31.
Why is the mainstream media so reluctant to admit that this guy was a jihadist? As Rich Lowry chronicles in his column today, the New York Times, Time Magazine, and the Washington Post keep pushing the "when soldiers snap" narrative, with articles about "Post-Traumatic-Stress-Syndrome."
This is a tragic consequence of political correctness. We pretend in the airports that 85 year old white grandmothers pose the same risk to security as 25 year old middle-eastern males. The U.S. Army ignores obvious and well-reported signs that this madman was a traitor, and did nothing.
And the U.S mainstream media can't even admit that Hasan was motivated by Muslim extremism! For God's sake, he yelled Allah Akbar while killing 13 American soldiers!
Do you think the New York Times will print as many front page stories about this tragedy as they did about the Tailhook scandal? Or Abu-Graib?
I'll bet anybody any amount of money that it won't even be close.
The Army had a jihadist Muslim in its ranks. A traitor whose allegiance was to Islam first. Further, he let it be widely known, through his words and actions, that he thught the war on terror was a war on his religion, and that he thought infidels should be murdered.
But these in-plain-sight warning signs were ignored. His fellow students in his master's program didn't file complaints because they were afraid of appearing discriminatory. TWO investigations into his conduct and his correspondence were dropped.
He kills thirteen fellow soldiers and wounds 31.
Why is the mainstream media so reluctant to admit that this guy was a jihadist? As Rich Lowry chronicles in his column today, the New York Times, Time Magazine, and the Washington Post keep pushing the "when soldiers snap" narrative, with articles about "Post-Traumatic-Stress-Syndrome."
This is a tragic consequence of political correctness. We pretend in the airports that 85 year old white grandmothers pose the same risk to security as 25 year old middle-eastern males. The U.S. Army ignores obvious and well-reported signs that this madman was a traitor, and did nothing.
And the U.S mainstream media can't even admit that Hasan was motivated by Muslim extremism! For God's sake, he yelled Allah Akbar while killing 13 American soldiers!
Do you think the New York Times will print as many front page stories about this tragedy as they did about the Tailhook scandal? Or Abu-Graib?
I'll bet anybody any amount of money that it won't even be close.
Monday, November 09, 2009
What kind of America are we?
It has become more and more apparent to me lately that there are really two general world views that determine how a person views the kind of country America is and should be.
The two views are incompatible. There is no "compromise" between them that doesn't move the country toward one or another from where it currently is. The country isn't split right down the middle on these two views, but it is pretty close. Maybe 45%/55%, perhaps just a bit wider.
Because there isn't any compromise possible between these two camps (and what I mean here is that any compromise necessarily moves in one direction or the other, so one side advances, the other loses) the two sides can't even really talk with each other. They have fundamentally different assumptions about the very meaning of America.
One side honestly wants to move America into the European welfare state model: high taxes, with some necessities provided by government for everyone and all necessities provided by government for some people. The private sector and voluntary arrangements between people are restricted in order to forward the social policies that the government has decided are important (workweek, vacation time, hours, working conditions, benefits, etc.)
This view believes the individual is subordinate to the group, and therefore the government's rightful role is often to limit and direct individual behavior in order to create a fairer, more just society.
Let's call this view the "collectivist" vision.
The other side believes the European welfare state model is not what America is and should be about. They believe that government should generally stay out of voluntary arrangements between individuals, and that is should definitely not have the power to attempt to create some vision of social justice through abrogation of these individual rights. At core, they belive that the individual is not subordinate to the group, that limits and directives on individuals is warranted only to prevent one individual from harming others.
Let's call this view the "individualist" vision.
What we see going on now is that President Obama is attempting to move this country rapidly in the direction of the collectivists. He wants government to take over automobile companies and banks and take a proscriptive role in health care and energy use.
So the question for this time is: Is America a collectivist country? Will the people support a President who wants to move us there?
I don't think so. I think the collectivist view is indeed shared a large minority of Americans, but it isn't the majority. And further - America is fundamentally NOT a collectivist society. It is not what our founding fathers created. Quite the opposite!
So a President can't just change the fundamental principles of our country through a legislative agenda.
People have said to me lately: "So what is so bad about the European model?"
Leaving aside the arguments about the structural unemployment rate it creates, and the lower standard of living, the problem with the European model is that it is inherently un-American in that it restricts the freedoms upon which our nation was founded.
Hey, if Europe wants it, have at it. I would argue that Europe accepts the welfare state model because its culture came of age in a fuedal system, where there was no middle class and where the people were literally in serfdom. They got whatever the Lord allowed.
The European welfare state is just the new Lord, and the European people have in their cultural core an acceptance of the notion that they are subservient to the Lord.
That is not how our country came of age. Our forefathers rejected this model. They fled the feudalism that limited their freedom, and at great personal risk forged a new nation here. They even fought a war to sever the ties to the fuedal government of Europe.
They founded a new country based on the primacy of the individual. A radical notion that rights are vested in the individual, and that it is the government's role to secure these rights. No nation on Earth had ever been founded on such a notion.
And look what happened! It unleashed the creative powers of the human spirit in a way that literally changed the world. For the next two hundred plus years, America was the engine that brought unimaginable prosperity to any and every corner of the world that wanted to follow its lead.
So why is it that we have some large minority of the people in America now who want to copy the European collectivist "serfdom" model?
I don't understand it. It is as if, 230+ years after our nation's founding, that many people now literally do not accept the fundamental premise of our nation's founding.
And one of them is in the White House.
I started this post by saying there are two visions for America - which I identified as the "collectivist" vision and the "individualist" vision. I acknowledge that many people are in the collectivist camp, and are trying like hell to move our country into this model.
I know this would anger folks who are of this view, but what they are doing is fundamentally un-American. The society they are trying to create is not what our country was created to be. If they want to change the founding principles of America in order to establish a European model, then they should have to acknowledge that they don't share the basic American founding principles and try to convince us that these principles are wrong and should be changed.
Make no mistake: the path Obama wants us on leads to serfdom. I predict the nation will reject it, because the enough American people have not forgotten - much less rejected - the core principles that made America the greatest nation ever to grace the planet Earth.
The two views are incompatible. There is no "compromise" between them that doesn't move the country toward one or another from where it currently is. The country isn't split right down the middle on these two views, but it is pretty close. Maybe 45%/55%, perhaps just a bit wider.
Because there isn't any compromise possible between these two camps (and what I mean here is that any compromise necessarily moves in one direction or the other, so one side advances, the other loses) the two sides can't even really talk with each other. They have fundamentally different assumptions about the very meaning of America.
One side honestly wants to move America into the European welfare state model: high taxes, with some necessities provided by government for everyone and all necessities provided by government for some people. The private sector and voluntary arrangements between people are restricted in order to forward the social policies that the government has decided are important (workweek, vacation time, hours, working conditions, benefits, etc.)
This view believes the individual is subordinate to the group, and therefore the government's rightful role is often to limit and direct individual behavior in order to create a fairer, more just society.
Let's call this view the "collectivist" vision.
The other side believes the European welfare state model is not what America is and should be about. They believe that government should generally stay out of voluntary arrangements between individuals, and that is should definitely not have the power to attempt to create some vision of social justice through abrogation of these individual rights. At core, they belive that the individual is not subordinate to the group, that limits and directives on individuals is warranted only to prevent one individual from harming others.
Let's call this view the "individualist" vision.
What we see going on now is that President Obama is attempting to move this country rapidly in the direction of the collectivists. He wants government to take over automobile companies and banks and take a proscriptive role in health care and energy use.
So the question for this time is: Is America a collectivist country? Will the people support a President who wants to move us there?
I don't think so. I think the collectivist view is indeed shared a large minority of Americans, but it isn't the majority. And further - America is fundamentally NOT a collectivist society. It is not what our founding fathers created. Quite the opposite!
So a President can't just change the fundamental principles of our country through a legislative agenda.
People have said to me lately: "So what is so bad about the European model?"
Leaving aside the arguments about the structural unemployment rate it creates, and the lower standard of living, the problem with the European model is that it is inherently un-American in that it restricts the freedoms upon which our nation was founded.
Hey, if Europe wants it, have at it. I would argue that Europe accepts the welfare state model because its culture came of age in a fuedal system, where there was no middle class and where the people were literally in serfdom. They got whatever the Lord allowed.
The European welfare state is just the new Lord, and the European people have in their cultural core an acceptance of the notion that they are subservient to the Lord.
That is not how our country came of age. Our forefathers rejected this model. They fled the feudalism that limited their freedom, and at great personal risk forged a new nation here. They even fought a war to sever the ties to the fuedal government of Europe.
They founded a new country based on the primacy of the individual. A radical notion that rights are vested in the individual, and that it is the government's role to secure these rights. No nation on Earth had ever been founded on such a notion.
And look what happened! It unleashed the creative powers of the human spirit in a way that literally changed the world. For the next two hundred plus years, America was the engine that brought unimaginable prosperity to any and every corner of the world that wanted to follow its lead.
So why is it that we have some large minority of the people in America now who want to copy the European collectivist "serfdom" model?
I don't understand it. It is as if, 230+ years after our nation's founding, that many people now literally do not accept the fundamental premise of our nation's founding.
And one of them is in the White House.
I started this post by saying there are two visions for America - which I identified as the "collectivist" vision and the "individualist" vision. I acknowledge that many people are in the collectivist camp, and are trying like hell to move our country into this model.
I know this would anger folks who are of this view, but what they are doing is fundamentally un-American. The society they are trying to create is not what our country was created to be. If they want to change the founding principles of America in order to establish a European model, then they should have to acknowledge that they don't share the basic American founding principles and try to convince us that these principles are wrong and should be changed.
Make no mistake: the path Obama wants us on leads to serfdom. I predict the nation will reject it, because the enough American people have not forgotten - much less rejected - the core principles that made America the greatest nation ever to grace the planet Earth.
Friday, November 06, 2009
Fort Hood shooting reaction
As the details start to roll in about the Fort Hood shooting, it seems more and more obvious that the shooter was indeed motivated by Muslim extremism. Reports of him yelling "Allah Akbar" as he fired the shots should be a pretty good hint as to his motive.
Which makes even more ridiculous the reaction from Congressman Jim McDermott I just heard on the radio. He said the shooting was a "symptom of a stressed military," and showed the need for "mental health counseling." He was quoted as saying we need to end the "stigma" associated with seeking mental health services.
So McDermott thinks that Hasan, who was a mental health medical professional, might not have passed out new bellybuttons to his military colleagues if a sense of shame had not kept him from seeking out mental health counseling?
This guy is such a dope.
Which makes even more ridiculous the reaction from Congressman Jim McDermott I just heard on the radio. He said the shooting was a "symptom of a stressed military," and showed the need for "mental health counseling." He was quoted as saying we need to end the "stigma" associated with seeking mental health services.
So McDermott thinks that Hasan, who was a mental health medical professional, might not have passed out new bellybuttons to his military colleagues if a sense of shame had not kept him from seeking out mental health counseling?
This guy is such a dope.
Wednesday, November 04, 2009
Interpreting NY-23
Here come the post-mortems on the results of NY-23 last night.
Democrats will say it shows the dysfunction of the Republican party, because they ate their own and delivered a victory to the Democrat. They will say it lays bare the rift in the Republican party between the Tea Party element and the party establishment, and ensures that there will be contested primaries all over the country that will further damage the party and weaken it for 2010.
I don't see it that way. I think this has a few relevant facets.
The party screwed up big time by putting Scozzafava up as the candidate. There was no nominating election - it was done by a handful of party establishment types. From the start it was clear that she was a horrible fit for the district. Had they simply put up even a minimally acceptable candidate, they would have rolled to victory and avoided this whole mess.
Hoffman wasn't really an ideal candidate himself. He was pretty much a stiff. Zero charisma. Kind of the fringe type of guy who would step into this kind of a breach - a situation that isn't usually going to attract the most polished and mainstream person, and he wasn't.
So the fact that he lost isn't all that surprising.
Scozzafava proved herself, in the end, to be everything her opponents said she was when she gracelessly endorsed the Democrat. In her heart, she was a Democrat. Why the party ran her is mysterious.
But this loss isn't altogether a bad thing. First, Owens is almost certainly a one termer. This is a Republican district.
So on the negative side of the ledger, we have a one term Democrat in a Republican district. On the positive side, we have a very strong message sent to the establishment Republicans: NO MORE RINOS IN DISTRICTS WHERE A CONSERVATIVE CAN WIN!
And guess what? President Obama is doing a very good job at bringing Conservatism back into vogue again, which means that there will be LOTS of districts where a real conservative can win.
NY-23 was indeed a family fight, and there was some collateral damage. But the result will be a party that fields candidates who are far more in step with the reality of the political facts on the ground.
It was a wake up call to an out-of-step Republican party establishment, and it is a good thing it happened.
Democrats will say it shows the dysfunction of the Republican party, because they ate their own and delivered a victory to the Democrat. They will say it lays bare the rift in the Republican party between the Tea Party element and the party establishment, and ensures that there will be contested primaries all over the country that will further damage the party and weaken it for 2010.
I don't see it that way. I think this has a few relevant facets.
The party screwed up big time by putting Scozzafava up as the candidate. There was no nominating election - it was done by a handful of party establishment types. From the start it was clear that she was a horrible fit for the district. Had they simply put up even a minimally acceptable candidate, they would have rolled to victory and avoided this whole mess.
Hoffman wasn't really an ideal candidate himself. He was pretty much a stiff. Zero charisma. Kind of the fringe type of guy who would step into this kind of a breach - a situation that isn't usually going to attract the most polished and mainstream person, and he wasn't.
So the fact that he lost isn't all that surprising.
Scozzafava proved herself, in the end, to be everything her opponents said she was when she gracelessly endorsed the Democrat. In her heart, she was a Democrat. Why the party ran her is mysterious.
But this loss isn't altogether a bad thing. First, Owens is almost certainly a one termer. This is a Republican district.
So on the negative side of the ledger, we have a one term Democrat in a Republican district. On the positive side, we have a very strong message sent to the establishment Republicans: NO MORE RINOS IN DISTRICTS WHERE A CONSERVATIVE CAN WIN!
And guess what? President Obama is doing a very good job at bringing Conservatism back into vogue again, which means that there will be LOTS of districts where a real conservative can win.
NY-23 was indeed a family fight, and there was some collateral damage. But the result will be a party that fields candidates who are far more in step with the reality of the political facts on the ground.
It was a wake up call to an out-of-step Republican party establishment, and it is a good thing it happened.
Tuesday, November 03, 2009
2009 election night
As I write this, it is so far a Republican sweep in the races that have been called so far. The one race not yet determined is the famed NY-23rd district, where the Conservative party candidate is behind by about 4,000 votes with 65% of the count done.
So what does it mean?
I don't know how this can be spun any other way than to say that independent and swing voters moved hard away from the Democrats, and that it means trouble for the Obama agenda and Democrat candidates in 2010.
Over at BlueOregon tonight, there isn't so much as a whisper about the election results. After crowing for a year about the demise of the Republican party, there doesn't seem to be much self-reflection when the first post-Obama election provides them with a small but stern rebuke.
I guess this shouldn't be a surprise. There was nothing on BlueOregon about the apalling "green-gate" scandal in which Kulongoski basically lied about the cost of his tax credit scheme. Kari Chisolm wrote a post today called "Quick Hits: catching up on the weekend," in which he gave a rundown of the major political news stories of the weekend.
The green-gate story wasn't even mentioned!
That is how one-party states become two party states.
Will the 2009 election be a harbringer for 2010 in Oregon and nationally? I think that is a distinct possibility. Obama ran as a moderate, and has governed as a radical. That is not where the people of this country reside.
So what does it mean?
I don't know how this can be spun any other way than to say that independent and swing voters moved hard away from the Democrats, and that it means trouble for the Obama agenda and Democrat candidates in 2010.
Over at BlueOregon tonight, there isn't so much as a whisper about the election results. After crowing for a year about the demise of the Republican party, there doesn't seem to be much self-reflection when the first post-Obama election provides them with a small but stern rebuke.
I guess this shouldn't be a surprise. There was nothing on BlueOregon about the apalling "green-gate" scandal in which Kulongoski basically lied about the cost of his tax credit scheme. Kari Chisolm wrote a post today called "Quick Hits: catching up on the weekend," in which he gave a rundown of the major political news stories of the weekend.
The green-gate story wasn't even mentioned!
That is how one-party states become two party states.
Will the 2009 election be a harbringer for 2010 in Oregon and nationally? I think that is a distinct possibility. Obama ran as a moderate, and has governed as a radical. That is not where the people of this country reside.
Monday, November 02, 2009
Governor: "I am NOT corrupt. Just incompetent"
I am insulted, and you should be too.
I mean, you would think they would respect us enough to try to come up with some excuse that at least sounds marginally plausible. But they don't. They know that any old excuse will do, because in our one party state nobody will hold them accountable for wasting hundreds of millions of taxpayer dollars.
I am talking about the Business Energy Tax Credit, and the revelation in yesterday's Oregonian that the Governor's office pressured the Department of Energy to lowball the estimates on how much the tax credit would be used. They were only off by a factor of 40 or so.
When two Department of Energy staffers (one former, one current) say that they were instructed to put down as low an estimate as possible, what is the Governor's response? From the Oregonian:
"Kulongoski staff members deny that the governor or anyone on his staff directed the Energy Department to lowball the costs and said the huge disparity between early cost projections and actual expenses was simply a bad guess. They say no one understood how popular the tax credit would become."
This is just laugh out loud funny. Mind you, they were estimating the impact of raising the tax credit to $20 million per project. And their estimate: $1.2 million in '07-'09 and $4.1 million for '09-'11.
Someone will have to explain that to me. Bad guess indeed.
So they would have us believe that they are really stupid enough to make an estimate like this, and not see how ridiculous it is on its face. As if they asked themselves: "Gee, if we raise the tax credit from $3.5 million to $20 million, how much will get used? Probably about $1.2 million. Yeah, let's go with that."
And when they are caught red-handed, with two different inside sources who say the Governor's office pressured them to minimize the number, they just claim incompetence!
Question: Will Oregonians continue to put up with this BS?
I mean, you would think they would respect us enough to try to come up with some excuse that at least sounds marginally plausible. But they don't. They know that any old excuse will do, because in our one party state nobody will hold them accountable for wasting hundreds of millions of taxpayer dollars.
I am talking about the Business Energy Tax Credit, and the revelation in yesterday's Oregonian that the Governor's office pressured the Department of Energy to lowball the estimates on how much the tax credit would be used. They were only off by a factor of 40 or so.
When two Department of Energy staffers (one former, one current) say that they were instructed to put down as low an estimate as possible, what is the Governor's response? From the Oregonian:
"Kulongoski staff members deny that the governor or anyone on his staff directed the Energy Department to lowball the costs and said the huge disparity between early cost projections and actual expenses was simply a bad guess. They say no one understood how popular the tax credit would become."
This is just laugh out loud funny. Mind you, they were estimating the impact of raising the tax credit to $20 million per project. And their estimate: $1.2 million in '07-'09 and $4.1 million for '09-'11.
Someone will have to explain that to me. Bad guess indeed.
So they would have us believe that they are really stupid enough to make an estimate like this, and not see how ridiculous it is on its face. As if they asked themselves: "Gee, if we raise the tax credit from $3.5 million to $20 million, how much will get used? Probably about $1.2 million. Yeah, let's go with that."
And when they are caught red-handed, with two different inside sources who say the Governor's office pressured them to minimize the number, they just claim incompetence!
Question: Will Oregonians continue to put up with this BS?
Wednesday, October 21, 2009
Here they go again
Sam Adams is just back from DC where he was trying to get $20 million out of the feds to help pay for the latest "linchpin" project that they are just CERTAIN will pay for itself many times over by attracting untold levels of economic activity.
Untold, of course, because nobody can actually explain in concrete terms exactly how the thing will create any jobs or value.
The story is in Willamette Week. The want to build a monument to "sustainability" - an office building that produces all its own electricity. Of course that requires the thing to be hotter in summer and cooler in winter than most of us would want in a building for $31 per square foot. (Which puts it a level above class A office space.)
Heck all sorts of people will line up to have their office in a place where they sweat all summer and freeze all winter, especially if it costs more. Guess who will occupy the space? Sustainability-trough-feeding non-profits and government agencies.
But I mostly LOVE the serious economic analysis they did to show how if we build this outrageously expensive building with taxpayer funds, that it will spur all sorts of economic benefits. Here is what the Chancellor of the Oregon University System, a financial partner in the deal to the tune of $80 million in bonds, says:
"This is going to brand Oregon as a leader in the sustainability movement,” Kenton says. “We think of this building as a portal. People are going to want to come here and connect with it, and it will drive a whole bunch of economic value to the state.”
So there we have it. A "portal" that will "drive a whole bunch of economic value" to Oregon.
And on the strength of that extensive econometric analysis, we commit tens of millions of taxpayer funds.
OK then.
Untold, of course, because nobody can actually explain in concrete terms exactly how the thing will create any jobs or value.
The story is in Willamette Week. The want to build a monument to "sustainability" - an office building that produces all its own electricity. Of course that requires the thing to be hotter in summer and cooler in winter than most of us would want in a building for $31 per square foot. (Which puts it a level above class A office space.)
Heck all sorts of people will line up to have their office in a place where they sweat all summer and freeze all winter, especially if it costs more. Guess who will occupy the space? Sustainability-trough-feeding non-profits and government agencies.
But I mostly LOVE the serious economic analysis they did to show how if we build this outrageously expensive building with taxpayer funds, that it will spur all sorts of economic benefits. Here is what the Chancellor of the Oregon University System, a financial partner in the deal to the tune of $80 million in bonds, says:
"This is going to brand Oregon as a leader in the sustainability movement,” Kenton says. “We think of this building as a portal. People are going to want to come here and connect with it, and it will drive a whole bunch of economic value to the state.”
So there we have it. A "portal" that will "drive a whole bunch of economic value" to Oregon.
And on the strength of that extensive econometric analysis, we commit tens of millions of taxpayer funds.
OK then.
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