"The American people are called upon to not sacrifice."

With ethanol, "we can break our addiction to fossil fuels without sacrificing our dependence on fossil fuels."

2 out of 3 presidential candidates endorse Jackass Egalitarianism

Two thirds of our presidential candidates are now pandering to the electorate with promises of a gas tax "holiday" - a temporary moritorium on federal fuel tax collection that "would shave 18.4 cents off the per-gallon price of gas and 24.4 cents off diesel," according to the Dallas Morning News. To put that savings in perspective, gas prices have risen 42 cents since January.

Of course, by artificially and temporarily subsidizing a lower price for gasoline, you'll be encouraging people to buy more of it, which increases demand, which will lead to even higher gas prices when the "holiday" ends. It's kind of like offering a junkie free crack on Mondays for a limited time only.

There's an approximately 67% chance that this douchebag will be your next Secretary of Energy.

In an economist's ideal world, gradually rising gas prices will gradually make people reduce their consumption until prices cease to rise anymore. Some commodities experts estimate that this may happen when the price of gas tops out at about $10 a gallon (see this New York Sun article).

But if the government meddles in the meantime, Americans won't be as inclined to conserve, which means that gas prices will continue to rise, and at a faster rate than they would without the tax "holiday." And when the "holiday" invariably ends, motorists will be whammied with a sudden 20 cent jump in prices. A summer-long gas tax holiday seems like a great way to guarantee $5 a gallon gasoline just in time for the fall hurricane season.

So gas tax holidays invariably lead to nasty gas price hangovers. Even I, who am no fan of happy motoring, find this policy a bit sadistic - especially since the prime beneficiaries of high prices and unrelenting oil consumption are companies like ExxonMobil, pulling in eleven-digit profits.

At the same time, the federal government's highway fund will lose billions of dollars for every month of gas tax vacationing - which also means that the federal capacity to fund new highway and road projects will wither away just as rapidly. The national highway trust fund is already running short of money to pay for big new freeway projects, so this could make it even more unlikely that the federal government will be able to afford to pay for new freeways and highways in the future. Fine by me!

Last night, a bunch of Maine truckers drove their rigs 800 miles to protest in D.C. At about 10 miles to the gallon, each truck spent over $300 for the one-way trip (not including engine wear and the opportunity costs of lost revenue). It probably wouldn't make them feel any better to point out that they could have spent less than half the money for a train or bus ride to Washington...

More grist for the ethanol/agflation brew

My buddy Andrew, a former hutsman and current geographer studying Texan ranches, weighs in on the biofuels brouhaha by pointing out that the America's current shortage of corn for food isn't that bad in the grand scheme of things, and could actually have a few beneficial side effects for the environment.

Andrew argues that the sudden dearth of cheap American grains could prompt developing nations to diversify and develop their own local agriculture (as long as they don't starve in the meantime). Also, rising feed prices might drive more people to eat less meat: since it takes roughly 16 pounds of feed to produce one pound of beef, the prices of farmed animal products are going to rise faster than the prices of vegetarian products.

Still, Andrew makes it clear that he's no fan of the biofuels mandate - but he points out that "changes in supply are a natural feature of our economy," and we've weathered crop shortages before without too much trouble.

International Herald Tribute columnist Roger Cohen is a whole lot more defensive of ethanol in his column published in today's New York Times. He writes that "most of this [criticism of biofuels], to borrow a farm image, is hogwash and bilge."

Cohen blames rising oil prices (since farmers burn lots of oil to produce crops), the weak dollar (which buys less imported food than it used to) and increasing foreign consumption as the real causes of rising food prices.

Unfortunately, some of Cohen's arguments are circular. Biofuel production leads to diminishing food exports, which is one reason our trade deficit is growing and the dollar is getting weaker. And if, as I've written previously, we're going to replace foreign oil with biofuels, then rising oil prices will be more closely tied to rising food prices, since crops are now more likely to be turned into fuel instead of food.

The factors behind the global food shortage are certainly complicated, but it can't be denied that the American ethanol mandate isn't helping matters. Given the state of the world, why the hell are we diverting so many millions of calories away from human bellies and into western gas tanks instead?

Longfellow's garbage

The corner of Fore and Hancock Streets in Portland. Birthplace of poet Henry Wadsworth Longfellow.

Portland's eastern waterfront area seems like a pretty unremarkable neighborhood: a lot of big parking lots, some nondescript industrial buildings from the mid-twentieth century, and one massive new parking garage under construction. Compared to the city's other neighborhoods, full of historic buildings and activity, this one is pretty easy to overlook.

But in fact, this neighborhood contains one of the most historic sites in Portland - the birthplace of poet Henry Wadsworth Longfellow, for whom Portland has named a square (with a statue of the poet) and whose adult residence on Congress Street now houses the Maine Historical Society. Longfellow was born in this Federal-style house on the corner of Hancock and Fore Streets:



You won't recognize this building in the neighborhood today, though, because it's not there. For all of the reverence this city bestows on the famous poet, Portland allowed the demolition of this home sometime in the early twentieth century to make way for an adjacent industrial business expansion. That industrial building, in turn, was demolished in 2006 (photos of the warehouse demolition are at Margery Niblock's blog) to make way for a new hotel.

Right now, the Longfellow birthplace site is an empty, dirt lot (the one pictured at the top of this post) with a few holes and steel pilings dug into it. The holes that construction workers have dug reveal, in places, old fieldstone foundations from previous buildings on the site:





And so, this construction project has unearthed, temporarily, a Portland archaeological site. Among the fieldstone foundations are remnants of ancient garbage: an old chicken bone, shards of broken china, hand-smithed nails encrusted in rust. Even a few wooden remnants of the old house itself.



Did any of this ancient garbage belong to the young Henry Wadsworth Longfellow? Did a harsh scolding over this particular broken teacup lead the poet, years later, to brood about "the moldering Past" and pen "The Rainy Day"? Did the poet's failure to mention a shoe in his reminisces of "My Lost Youth" indicate that he had actually forgotten about this shoe, which was in fact lost in the cellar, only to be found decades later?

Unfortunately I am only an amateur archaeologist, and so I can only speculate. More authoritative answers to these questions will have to wait another half century or so until this yet-to-be-built hotel, too, comes down. Any day now, workers will encase all of this evidence under a layer of new concrete. History buffs should get their move on down to the construction site before they miss their last chance to see Longfellow's basement.

Note: these photos were sent in by an anonymous tipster. I would never ever trespass on a construction site.

Energy crisis? Let them burn cake.

Another day, another food riot. Today, the Economist is reporting on food riots in Haiti, which could lead to the collapse of government in the western hemisphere's poorest nation. The Guardian has plotted a map of recent global food riots, from last fall's "pasta riots" in Milan to the cluster of recent violence over food prices in western Africa.

The Wall Street Journal reports that global food prices have increased 83% in the past three years. Until recently, worldwide economic growth kept incomes rising fast enough to keep pace with rising food prices. But that's not the case anymore, as even first-world residents are discovering.

I've written before about agflation and its relationship to Congress's decision to use a fifth of the country's corn for biofuels instead of for food. Global food prices were already on the rise before the Energy Bill passed in Washington, but new subsidies for ethanol caused farmers to convert more land to biofuels production and constrain the supply of other food crops further, just as an economic downturn, a weak dollar, and rising energy prices conspired to increase demand for food relative to other goods.

To add insult to injury, since the energy bill passed, several new studies on the topic have shown that biofuels production could actually be worse for the climate than simply using fossil fuels. Corn production and distribution consumes a tremendous amount of transportation fuels, typically oil. If we're going to swear off foreign oil by embracing biofuels, we'd need to refine and burn a whole lot of our national corn production just to continue producing corn, to say nothing of feeding or fueling the rest of the nation. It's as though our lawmakers are trying to repeal the laws of thermodynamics.

Biofuels were innocent enough when it was just hippies raiding fryolators to power their VW buses. But telling a nation that we can keep on truckin' by burning our next meal is a particularly harrowing example of jackass environmentalism. People in the global south are starving, and entire governments are tottering, just so we can keep on joyriding our pickups down the steepening back slope of Hubbert's Peak.

All this bears an uncomfortable similarity to old frontier stories of desperate subsistence farmers eating their seed crops to survive for the winter. Except this time, we're not even feeding ourselves - we're feeding our motor vehicles.

More than you ever wanted to know about the Bayside Glacier

I've had a feature article about Portland's glaciers published in today's Portland Phoenix. By utilizing the ancient art of journalistic research (though my technique had gone flaccid from years of blogging), I learned that Portland actually has a second, even larger glacier located in the woods off outer Congress Street. Ten times larger, in fact, than the enormous-in-its-own-right Bayside glacier, which I've written about previously here and here and here.

Here's a link to the article's online version:
"A Stormwater Popsicle: What the Bayside Glacier can teach us about Portland’s sewage problem"

Protesting oil is worse than Cobra and Barbie's credit limit COMBINED.

I've already written a little bit about the oil rig museum in Galveston, Texas. Here's a photo of one of their sillier exhibits:


Click the image to read the sign if it's not legible in the thumbnail above.

Now, I can appreciate their efforts to inform people that plastic stuff is made from oil. But telling kids that their dolls and stuffed animals rely on oil companies for their very survival seems a bit much. When I re-read this sign, I envision G.I. Joe, Barbie, and the Care Bears joining forces to fight the Sierra Club over the Arctic National Wildlife Refuge, a wondrous Cabbage Patch where millions of new toys are just aching to be born.

Of course, this exhibit sign takes on another layer of irony with all the recent brouhaha over toxic toys: Barbie's polyvinyl chloride skin (made from oil, of course) has come under particularly heavy fire from regulators and concerned parents. Maybe G.I. Joe should wage war against the precautionary principle.

In the museum gift shop there was a whole corner given over to a bunch of toys that had no apparent connection to the oil industry or Texas or anything else in the museum. But a sign explained: "Products of petrochemicals!" Just don't put them in your mouth.

WhoFooMa: "It's Vegas with organic, gluten-free scones."

Christopher Hawthorne, architecture critic for the LA Times, has written a great critique of WhoFooMa as "the grocery store version of a hybrid SUV made by Lexus or a 12,000-square-foot 'green' house with a swimming pool and six-car garage accompanying its solar panels and sustainably harvested decking."

WhoFooMa shoppers and employees enjoying the atmosphere of self-righteousness and organic nitrous oxide. Image courtesy of Trusted Places blog.

Hawthorne notes the parallels between green architecture and organic foods as movements that have been co-opted by jackass environmentalist impulses:

"Somewhere along the way, for both organic grocers and the corporate patrons of green architecture, the line between planet-saving and aggressive marketing became blurred. Companies realized that promoting themselves as eco-friendly could be a powerful sales tool...

The genius of the Whole Foods approach, under hard-driving Chief Executive John Mackey, has been to realize that many American consumers have a vague desire to buy organic and live healthier but have no interest in dispensing with selection or comfort.

Read Hawthorne's full column here.

Peak Oil Hits the Road

According to NPR's All Things Considered (hat tip to the lovely girlfriend who told me to listen), truckers all over the nation parked their rigs yesterday to protest high diesel prices, which have already risen well above $4 a gallon.

Independent truckers are being particularly vocal, since they lack the bargaining power of larger firms to negotiate for lower diesel fuel contracts, and also seem reluctant to raise their rates. NPR quoted independent trucker John Paul Trainor as he sat on the beach in San Diego on Tuesday instead of delivering cargo in his rig. "It's like everybody wants something for nothing," Trainor said. "And they finally pushed us past the nothing point."

But it's not as though the bigger trucking companies aren't getting squeezed: some are taking the drastic measure of asking their drivers to obey speed limits, according to Treehugger. This quote is from an AP report of the phenomenon: "Truckers and industry officials say slowing a tractor-trailer rig from 75 mph to 65 mph increases fuel mileage by more than a mile a gallon, a significant bump for machines that get less than 10 miles per gallon hauling thousands of pounds of freight."

OK, so I harbor no deep regret that trucks are driving more slowly and that some truckers will sell their rigs and find something more productive to do than warehousing goods on our freeways. In fact, this is great news for air quality and highway safety.

However, after decades of Detroit's influence over transportation policies, the American economy is dangerously reliant on its trucks. Big rigs carry roughly 3/4 of America's goods (by weight) around the country (source). If truckers go out of business and constrain the supply of available shippers, or, if trucks driving at more reasonable speeds force retailers and manufacturers to invest more in their inventories, then the companies that hire the trucks will have to pay more to stay in business, and in turn, the prices we all pay for just about everything will rise.

Expect inflation, in other words. And since it's coming right in time for a recession as well, with the Federal Reserve Bank handing out bailouts and cheap loans like they were candy, it's beginning to look a lot like a shit storm of stagflation might be coming down, and it's highly unlikely that a $600 tax rebate is going to save us.

This is generally unfortunate news for everyone, not just truckers. But at least it's interesting for macroeconomists. More on stagflation, monetary policy, and the wage-price death spiral in a future post.