Life is good & getting better all the time! #3 - Julian Simon would have won his bet with Paul Ehrlich again, of course!

Last Friday, February 8, marked ten year anniversary of the death of natural resources economist, Julian Lincoln Simon. Simon is the author of The Ultimate Resource and The Ultimate Resource II (the most important book you've never read - unless you actually have read it, of course).

George Mason University economist, Don Boudreaux, marks the anniversary of his death with his column titled, Ultimate Scholar.

Broudreaux:

"Simon's most important contribution was to crystallize and explain an insight that even the best economists before him only glimpsed -- namely, that human beings in free societies are "the ultimate resource." Nothing -- not oil, not land, not gold, not microchips, nothing -- is as valuable to the material well-being of people as is human creativity and effort."

Here is Simon's grand idea:

"More people, and increased income, cause resources to become more scarce in the short run. Heightened scarcity causes prices to rise. The higher prices present opportunity, and prompt inventors and entrepreneurs to search for solutions. Many fail in the search, at cost to themselves. But in a free society, solutions are eventually found. And in the long run the new developments leave us better off than if the problems had not arisen. That is, prices eventually become lower than before the increased scarcity occurred."

The above is repeated in virtually every chapter of the book, and Simon also points out that this idea should not be an excuse to create our own problems. Alas, government does that anyway.

Again, Broudreaux:

This conclusion is so at odds with conventional wisdom that it is difficult for many people to see its validity. Stanford University's Paul Ehrlich -- author of "The Population Bomb," foretelling disaster from population growth -- found Simon's optimism about population growth to be so absurd that he famously accepted a bet offered by Simon in 1980.
The essence of Simon's position in the bet was that, despite the population growth that was sure to occur during the 1980s, the effective supply of natural resources would increase during this decade because human beings would figure out how to find, extract and use such resources more efficiently.
And the surest measure of this increased supply would be lower inflation-adjusted prices of resources.
Convinced that higher population is a curse, Ehrlich accepted the $1,000 bet. He chose (for Simon gave Ehrlich the choice of which resources to bet on) a bundle of copper, chromium, nickel, tin and tungsten and bet Simon that the real price of this bundle of resources would be higher in 1990 than in 1980.
In 1990 the prices in September of that year were compared to the prices of these resources in September 1980. Simon won convincingly. The real price of each of these five resources had fallen over the course of that decade, indicating that their supplies had grown even though human population had also grown by more than 800 million during that same time.
Julian Simon's legacy is profound. Free people are net producers. No economist has had a greater impact upon my own way of looking at the world than has Julian Simon. After 10 years, I still miss the wisdom and genuine kindness that flowed regularly from this remarkable man.

Economist Mark Perry, writes at the Carpe Diem blog:

"Julian Simon wanted to enter into a second wager, based on either the same commodities, or a different group of commodities, but the terms of a proposed second wager were never agreed upon. Simon died in February 1998. What if the original bet had been extended for another ten-year period, from 1990-2000? Simon would have won again (see chart above), since all of the metals declined in real price except for tungsten, and the average price decline of the 5-commodity group was -19%."

It would have made a great third book...The Ultimate Resource III.

Putting Exxon Mobil's Profits & Tax Bill In Perspective

The other day Sen. Barack Obama gave a speech where he railed against tax "loopholes that let corporations avoid paying their taxes while you're paying more."

Let's take a closer look at that accusation. Economist Mark Perry posts at his Carpe Diem blog about Exxon Mobil's astronomical corporate tax bill.


Perry concludes:


"Just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers paid in 2004 (most recent year available), which is 65,000,000 people! Further, the tax rate for the bottom 50% was only 3% of adjusted gross income ($27.4 billion / $922 billion) in 2004, and the tax rate for Exxon was 41% in 2006 ($67.4 billion in taxable income, $27.9 billion in taxes)."


On top of all of these federal taxes paid by Exxon Mobil, The FDC recently congratulated the Big Oil company's record profits in 2007. As noted in that post, in 2007 Exxon Mobil paid $35.6 billion in dividends to their shareholders.


If you add the $35.6 billion paid in dividends to shareholders, and add in the $27 billion Exxon Mobil paid in corporate taxes in 2004 (the latest year available), you get a boggling $62.6 billion in gross profits that did not end up in the corporate cash register.

The CW says that Big Oil takes all of these profits away from hard working Americans, and The Man keeps all the money. Obviously, that is not the case.

h/t: Larry Kudlow at The Corner.

"Man of the Year" vs. Mrs. Clinton

There's an interesting conversation going on today over at Ben Smith's Blog at The Politico. 944 comments and counting as of The FDC post time.

The gist of it is that back in New Hampshire Mrs. Clinton made a remark about Russian President (and soon to be dictator) Vladimir Putin not having a soul. A Russian reporter asked Putin about that comment and according to Ben Smith:

"The former KGB lieutenant colonel appeared to lash out at U.S. Sen. Hillary Clinton — a leading Democratic candidate for president — when one reporter quoted her as saying that former KGB officers have no soul:"At a minimum, a head of state should have a head," Putin said."

With 934 comments on Smith's blog, obviously this has struck a nerve with many people. It doesn't hurt that this blog got "Drudged" either. Putin won that exchange, no question about it. He made Mrs. Clinton look foolish.

The FDC agrees with Mrs. Clintons opinion, but just the fact that she let this remark slip out of her mouth shows that she is a dipomatic/foreign policy newbie. No matter your personal feelings (or more accurately for Mrs. Clinton, her political feelings she projects to the public) you have to use tact with what comes out of your mouth.

The left and the MSM are always portraying the Republicans as having a ham-handed screw-you type diplomacy/foreign policy. But, George W. Bush met with Putin and said that he saw Putin's "heart". Who's got the ham-handed screw-you foreign policy now? Mrs. Clinton is always touting her so-called foreign policy experience she gained as the wife of the President. If that were true, Mrs. FDC would make a great real estate broker (since she's married to one). This just goes to show that if one of the Democratic candidates becomes President they are going to have to operate in the real world. In other words, they'd have to make tough decisions, then act, speak as a leader, and live with the consequences of those decisions, actions, and words.

As much as Mrs. Clinton showed poor judgment, I fear Sen. Obama would fare even worse against the likes of Putin and Ahmadinejad. They must be licking their chops at their prospects of toying with and manipulating either Mrs. Clinton or Sen. Obama.

Who Killed Imad Mughniyah?

It doesn't really matter. What does matter is that it got done.

Mughniyah was the worst terrorist that most of us had never heard of by name, but you'd have to be hiding in a cave for the past 25 or so years to not be familar with his resume. To wit:

- The 241 U.S. Marines and 58 French soldiers who died in the 1983 truck bombings in Beirut along with 63 civilians, including 17 Americans, who died in the simultaneous bombing of the U.S. embassy there.
- Robert Stethem, the Navy diver whose beaten body was left on the tarmac during the 1985 hijacking of TWA Flight 847.
- William Buckley, the CIA station chief in Beirut who was kidnapped, tortured and killed in the mid-1980s.
- Twenty-nine people who died in the 1992 bombing of Israel's embassy in Buenos Aires and 85 more killed in the 1994 bombing of a Jewish Center in BA.

According to the American Thinker's Brett McCrea:

"This is equivalent to killing Bin Laden....If Mughniyah is indeed dead and Israel is held responsible, the clock is ticking. Hezb'allah will retaliate for this. Bank on it. If history provides any benchmark, look for a spectacular event in the very near future. As stated in my previous pieces, Hezb'allah has extensive contingency plans for this sort of occurrence and can put "steel on target" in short order."

Kudos to whoever did it.