Carbon Tax vs Cap and Trade

A carbon tax results in a known cost to the economy, but an unknown reduction in pollution. By contrast, a cap and trade system results in a known reduction pollution, but an unknown cost to the economy.


When politicians are talking about the high cost of gas, I can't see further taxes on carbon being politically acceptable. I think a cap-and-trade sold to the public as being a tax on those evil businesses being more likely.

The problem is that a cap and trade system will result in faster and more severe changes. This will have higher social costs.

For the record, either can be preferable to the hodge-podge systems that have been considered. Congress can't efficiently regulate each industry to thus-and-such amount of this-and-that type of pollution. That way lies madness.

Health Insurance - info and hazard

As you get older, you get more medical problems. Taken in large groups, as a population gets older, a higher percentage of it's income must be used to cover medical expenses. But we don't make health decisions as a large group. We make them as a collection of individuals.

Why should a 25 year old pay the same risk premium for health insurance as someone who is 75? They would opt out, keep their money, and take their chances.

That leaves the older (or those who for whatever reason have higher health risks), with a higher risk premium, and more expensive insurance. This causes the next most healthy person to opt out, and starts a cycle.

The individual knows more about their health than the insurance companies, which just increases the pace.

As our boomers age, and I have to pay their friggin' medical bills... I want this considered when the health debate is going on.

One Overall Solution - a bad solution

I was watching mid-day TV news. It's full of stuff like a six-year old being arrested for sexual harassment due to a zero-tolerance policy.

It strikes me as a good example of why one solution does not fit all situations. What sounds good for a federal election and gets votes may not apply equally well in every location and circumstance.

I've read that Europe's political fragmentation helped it when compared to China. China's Imperial policies were mostly good, but when China screwed the pooch all of China screwed the pooch. There was no province that could show a better way.

I think there is a lesson for us in the USA. If a policy is politically closely fought - why not leave it to the states? I rather have mixture of 50 answers, some good and some bad than risk one really bad policy. Over time a state with a bad policy could emulate another state's good policy - adapted for it's own peculiar circumstances.

Take education. We all agree it is important. We disagree on how to fix it. Why not leave it to the states to improve?

Tech for liberty?

I saw Doomsday last night. The level of barbarism is impressive. Elizabeth is on the tube today. The level of barbarism in history is equally impressive. It got me thinking in several different directions.

It seems to me that a brutal autocratic state would be less likely to have revolts or other resistance to it's rule than an autocratic state that was less brutal. If there is a high cost for deviating from societal norms, and it is clearly communicated - say public burning - a subject is less likely to risk the behavior. This should result in less deviance from the mainstream.

A society can live on the edge of it's resources. I don't mean to imply wastefulness, or inefficiency. I am referring to the diminishing returns of both capital and labor. When every bit of arable land is under cultivation, adding another peasant with a hoe won't help enough to feed that peasant. If you hold tech and capital constant, each extra person added to a project returns less results than the person added before - this puts the average return in constant decline. If you keep adding people, you get a situation where the return for that extra person isn't worth the cost of supporting that person. Getting rid of that last person doesn't loose you much production, but everyone splits and extra bowl of gruel that night. Life gets very cheap.


If a society is at the edge of it's resources, a democratic society could collapse. The tyranny of the crowds could easily take over and all hell would break loose. By way of contrast, an autocratic society could kill or imprison those desperate enough to act out, and preserve itself in a technological and social stasis.

Tech and capital increases result in an increasing standard of living - which gives democracy a relative advantage over autocracies.

So... if you want liberty... invest in tech and capital (human capital as well as material capital).

It also occurs to me that an autocratic society would have a vested interest in staying that way - and might actively oppose innovation.

I think the classical view that liberalism begets economic progress is true - but I think it works both ways. Economic progress also begets liberalism.