Wednesday, September 24, 2014

Why I Worry About The Future - Three Examples

What follows are examples of three things that make me pessimistic about our future. There is no common thread linking these three things, other than an incompetent government run by people that have no clue about how the real world works.

Example 1:

I'm old enough to remember all the gloom-and-doom that was forecast to occur if the Alaska Pipeline was built back in the 1970s. Now, with the Keystone Pipeline, it's déjà vu all over again.
Earlier this year the Obama administration again delayed a decision about the Keystone XL pipeline. The 1,200 mile, $5.2 billion pipeline could increase North American energy security and create more than 15,000 jobs. But behind the White House's unwillingness to move forward are environmental groups that vehemently oppose the project. Groups like the Sierra Club warn that Keystone "poses a health risk to our communities" and is a "climate disaster in the making."

We've lived through these scare tactics before. Exhibit A is the 800-mile Trans-Alaska Pipeline. Since its completion in 1977, this technological marvel has conveyed more than 17 billion barrels of oil, worth more than $1.5 trillion in today's dollars, from Alaska's North Slope to the Port of Valdez for shipment to the lower 48 states. Yet the pipeline was almost not built, thanks to a propaganda campaign by environmental groups beginning in 1969. Most of their dire warnings have proved inaccurate.

... aside from the 1989 Exxon Valdez oil spill—which was a tanker accident, not a pipeline leak—the Trans-Alaska Pipeline System, or TAPS, has had an exemplary environmental record.
Example 2:

Speaking of déjà vu, how many cycles of 'cut-the-military-budget-oops-we-need-the-military-increase-the-military-budget' have we been through since WWII. It looks like we may be entering another one.

Navy used 47 Tomahawks last night, 47% of planned 2015 purchases
Last night’s air strikes against ISIS in Syria used up 47 Tomahawk missiles.  The Tomahawk is an extremely effective weapon, capable of delivering its ordnance precisely, without risking a pilot’s life.  But the defense cuts of the Obama administration call for procuring only one hundred Tomahawks next year.

...The US has roughly 4000 Tomahawks in inventory right now, enough for roughly 85 days of a campaign, at the current rate of use.

“Smart diplomacy” was supposed to permit a reduction in the military budget of the United States in order to fund social spending.  The smart thing now would be to recognize that those pretentions are null and void. We may need more than 3 months’ supply of Tomahawks.
In fairness, one reason for the limited number of Tomahawks scheduled to be purchased next year is the planned shift to a new-generation land attack weapon system. But per usual in government procurement, actual development and purchase of the new weapon system is running behind schedule. In the meantime, we face the risk of a shortage in what we need today.

Example 3:

Local boy Julian Castro, the new head of HUD, made a major policy speech last week in which he outlined his top priorities for the department. Be afraid - be very, very afraid.
Castro named increasing access to mortgages for borrowers with low credit scores a top priority at HUD.
Hmmm ... isn't there a name for increasing access to mortgage loans for people with bad credit? Oh yeah - it's called subprime lending. That's what got us into the 2007/2008 financial crisis and recession.
Keeping people with bad credit scores from taking out mortgage loans is not housing discrimination or lending discrimination. It's prudent practice for both borrowers and lenders.

People with low credit scores are people who have not previously paid their bills on time. That's just the definition of bad credit.

Encouraging more people with low credit scores to take out mortgages is a bit like breaking out the Champagne at the AA meeting to celebrate a month of sobriety. Bad things can and will follow.

We don't need more subprime lending, and we don't need government agencies encouraging more subprime lending.
What is it with people in D.C.? Can't they remember what happened in the past? Don't they understand economic realities? Don't they have any common sense?

And why am I asking questions to which I already know the answers...?


Old NFO said...

Why does "those who do not read history are doomed to repeat it" keep running through my head???

Well Seasoned Fool said...

Linked this post to my blog.

CenTexTim said...

NFO - Ain't it the truth?

WSF - No problem. Thanks for the link.