Oil Woes for the DOE

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So, US crude oil production increased 182,000 barrels (or .01 percent) in 2007 compared to 2006. Good news, right? It would be, if that were not the first time production has increased since 1991, and only the tenth time that annual oil production has grown since it peaked in 1970. In fact, production has never reached the 1970 number of 3.52 billion barrels, and has lost an average of 1.8 percent per year in production since 1985. So why are we allotting a $24 billion budget to the US Department of Energy – which was set up specifically to reduce dependence on foreign oil – when, clearly, no progress is being made? Great question.

The statistics on oil imports are equally discouraging. Crude oil imports reached an all-time high in 2005 at 3.696 billion barrels. Except for a sharp decline in the 1980s, petroleum imports to the US have been on the rise, from around 1 billion barrels in 1970 to 4.4 billion in 2007. Last year, there was a 75 percent deficit gap of 5.7 billion barrels of petroleum between production and consumption, which was attributed to the rising number of imports and record lows in crude oil inventory.

Such a bleak picture of the oil industry should raise scepticism about the effectiveness of the Department of Energy in carrying out its objectives. The US has become significantly more dependent on foreign oil instead of less. The oil production numbers have dramatically decreased since the founding of DOE. It is almost comical that the goals its sets are reliable, affordable energy and US economic competitiveness in the oil industry. Since its beginning in 1977, the Department of Energy has only negatively impacted the United States' ability to compete worldwide. And with no change in sight, it will continue to waste billions of government funds a year  - sounds like a familiar tale indeed.

Blog Review 785

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It's very difficult to work out whether this Guide to Guardianistas on how to write about Africa is simply a satire or the actual operating manual that they work from.

Why didn't anyone notice the housing bubble? Well, actually, thousands of people did. And wrote about it.

All this talk of bailing out the "American" car industry? But just what is an American car?

More people piling in and buying banks. Does this mean that the market is at the bottom? No, sadly, people are buying banks to get access to the bailout.

Just who goes on these foreign Ministerial trips and what they talk about while there.

Apropos nothing very much, some wildlife photos.

And finally, one of the Great Newspaper Headlines of Our Time.

Clear and present

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As I wrote yesterday, there is a clear choice now for the electorate between the spend now and tax later policy of the Labour Party and the more fiscally sane Conservative approach of allying any tax cuts to a reduction in government spending. The Times agrees; although in the leader they fail to acknowledge the true extent of government waste and in so doing over-exaggerate the delicacy with which Cameron needs to tread.

In setting out the argument for the likely promise from the Conservatives of a reduction in spending compared to Labour, The Times states the following:

There are very few claims on public resources for which there is no case at all. This newspaper has long been an advocate of a more extensive reform of public services. But reform almost always loads the cost up front. To close down one system and replace it with another pays off in Year 4 but depletes the balance sheet in Year 1.

This really misses the point. We do of course need reform in what are considered key government services, and this could cost money in the short term, but what is needed now are promises of a slash and burn approach to wasteful spending outside of ‘key services’.

The Finklestein fear – that voters are afraid that the Conservatives will not properly fund public services – can easily be allayed through clarity of argument. Because the public have an irrational fondness for the NHS, it makes political sense to hold off any plans for the reform of this behemoth until the public comes to its senses (despite the human tragedy this entails). However, outside of this ideological sanctuary there is much that can be done.

The plethora of quangos and consultants should have their execution date set for soon after the next election. We have given a guide to sensible Privatizations and none of them will cause the electorate to lose an iota of sleep. Added to this there is much waste to be cut from all departments of government. It is thus good to read that the Conservative shadow Cabinet will spend the next few months carefully studying Whitehall budgets to identify where savings can be made. There are in fact many claims on public resourses that have no case at all.

Now all we need from Cameron is a commitment to some nice clean tax cuts.

Negligent Health Service

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The NHS strikes again. It has been reported that since 1995, £2.1 billion has been given to mothers and babies as compensation for medical negligence during childbirth. Costs include lifelong treatment for children who have experienced brain damage, cerebral palsy and developmental delay. This news comes as the maternity services are suffering from cuts in spending, short-staffed hospitals and rising birthrates. In England, the NHS reduced spending on maternity by £55 million in 2006-07, while the birthrate has risen 16 percent since 2001.

NHS shortcomings have caused an increasing number of litigations from the victims of insufficient care. The cost of maternity-related claims has risen from £163 million in 2003-04 to £288 million in 2007-08. One in every six thousand births in the UK has resulted in legal action against the health service. For example, Tristian Blomfield was awarded just over £8.26 million after suffering permanent brain damage at birth. At eight years old, he has cerebral palsy in all four limbs and needs constant care.

So what needs to be done? Well, in the short run, money should be spent on improving care to decrease the ridiculously high compensation costs the NHS has had to pay. Yet the current health care structure just won’t cut it. For example, despite the fact that Labour has increased spending on the NHS by £57 billion since 1997, the productivity of consultants has fallen over 20 percent during the same period.

In terms of health care reform, privatization is holds the key. Only an increase in the role of the private sector would introduce the necessary competition and efficiency savings. These changes need to start soon – just ask Tristian and his family.

Book of the week

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This week Booksmith recommends an excellent book by Wolfgang Sofsky entitled Privacy: A Manifesto. Translated from the German, it is at once rhetorically sparse and alarming. The argument is polemical, assuming a priori empathy with his position; as such much needless cant is dispensed with, allowing space for a rather idiosyncratic approach to the subject matter.

Flitting between history and novel, the work appeals as much to the emotions as to rationality. Capturing the zeitgeist of modernity with the echoes of fascism and socialism still ringing in our ears, Sofsky gives a stark picture of the world we live in and threats we face.

Avoiding well-trodden ground, Sofsky is original in suffusing the physical abuses that the state perpetrates against the privacy of the individual. This he does by assaulting the senses with descriptions reminiscent of Patrick Süskind’s Das Parfum.

It got Booksmith thinking. A moot point perhaps - given the horrendous abuses that those with the legitimate use of force commit against individuals in the name of security - but catching the state-run transport underground system certainly undermines Booksmith’s privacy, pushed beyond sanity by the inadequacies of the system. Cows travel for free in more comfort, and at least have the relief of slaughter at the end of it.

It would be a cliché to say this is a timely book, but it is. It also timeless: the battle for freedom is ongoing. Reading this, it is clear we need to reclaim privacy. It can be purchased here

Blog Review 784

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Yes, we do indeed have an opportunity to point to our politicians and laugh once again. As will be the ghost of Bastiat.

Ol' Adam gets a mention over here. Slightly odd choice of quote though, what happened to the "propensity to truck and barter"?

It's always immensely satisfying to read a bit of Polly bashing.

An interesting point perhaps showing that Ricardian Equivalence doesn't in fact equate.

Will wonders never cease? A churchman who grasps economic points?

Well, why didn't economists spot what was happening?

And finally, arrogant, abstruse, over-technical, long, unsnappy, demanding, confusing, complicated, excessively lengthy, long-winded, but don't worry, that's Just Willem.

Cutting the fat

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David Cameron has decided to drop his pledge to match the government's spending plans for 2010/11. Good call. By committing the Party to Labour’s big spending approach to government, Cameron’s policy looked almost as ridiculous as that of Gordon Brown. In following the Liberal Democrats, the Conservatives now have a cohesive and sensible intellectual position with which to attack the UK's failing government.

Cameron rightly demands public spending to be cut to tie in with tax cuts. He stated: "Gordon Brown is talking about borrowing an extra £30 billion. That’s a £30 billion Borrowing Bombshell – and let me tell you what it would mean. An eight per cent rise in income tax. Or a six per cent rise in VAT. Spending priorities shifting from new schools to educate our children and more police officers to keep our streets safe to servicing the growing interest on our debt. Gordon Brown knows that borrowing today means higher taxes tomorrow. If he doesn’t tell you that, he is deliberately misleading you."

Mr Cameron is quite right that “Labour's economic mismanagement makes it vital for the long-term health of our economy that we set a new path for restraining the growth of spending". Restraining the growth of government spending is surely a euphemism for cutting government waste. The Conservative Party should call for a national debate on the waste and role of government. They do not even need to argue for anything too extreme. For example, I would be very surprised if the vast majority of this country failed to agree with the £101 billion pounds of government waste identified by Matthew Elliott and Lee Rotherham in The Bumper Book of Government Waste.

To any right thinking person, Gordon Brown’s economic policies must surely look ridiculous against those of the Liberal Democrats and the Conservatives (it's not that either of their plans are perfect, mind you, just that the government's are fast becoming other-worldly). By the 2010 election, parliament, the media and the public at large should be discussing the need to expunge the scourge of government waste. For this to happen it is essential that Conservative Party does not shy away from confrontation, but goes on the attack. We will see.

Marriage - a match made in the Commons

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The recent interim study announcements by The Centre of Social Justice regarding marriage and how it could be further ‘strengthened’ are, I'm afraid, a little naive. Eliminating the tax and benefits systems' bias against committed relationships is one thing, but actively using state power to promote them is quite another.

Ever since marriage was institutionalized, it has been a menage a trois: the couple and the government. The government, whichever party happens to be in power, lures the couple into a painful triangular relationship with the come-to-bed-eyes of tax breaks, credits, allowances or benefits as the lubricant. It's time for this hideous, political lover to be kicked from the matrimonial bed.

First of all, the state offers little in the way of incentives that the perfect partner offers. Giving such primacy to policy is unrealistic. At the same time, we need to realize that marriage cannot solve all of society's ills. The desperately sorry cases of Baby P (at the hands of a psychotic/powerful individual) or Shannon Matthews (within a disparate ‘family’ directed by greed) do not show that but for a lack of marriage then it wouldn’t happen. These cases merely offer a commentary on the moral and intellectual shortcomings of a minority of individuals – a group which, sadly, exists in every society. When people are that far from being able to function rationally and sympathetically towards others it matters not one iota what the politicians do with legislation that surrounds marriage. Political force is exists to step in and protect when all else fails, to combat and rectify the actions of this minority – but it can't achieve everything.

One positive intention of the CSJ's report, however, is to promote the case for pre-nuptial agreements to be made legally binding. Quite right – this is the basis of what marriage primarily is: a partnership contract between two individuals, acting rationally in their own interests. It is not for the politician to influence that decision through benefits, assistance or forcing couples to remain together. This action retards us all a little more and undermines relationships to the detriment society.

Blog Review 783

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A shocking new discovery in the field of health care. Really, why didn't anyone think of this before?

A revealing case of do as I say rather than do as I do.

Not everything is looking rosy over in the Obama camp. Too many lawyers for a start, always a bad sign.

Netsmith has some experience of Russia and this explanation of the situation seems spot on.

More on the perils of bailouts.

And why we shouldn't be bailing out the auto companies.

And finally, Brown explains the economy.