Count the externalities

...associated with cars in this article. I counted 5 but there may be more.

Good news on my job, bad news on gas

College graduates make 83% more than those who don't attend college, and the bonus applies across industries. Working in a business school where the question, "How is this going to help me on the job?" is constantly asked, I have occasionally wondered about the usefulness to some of going through college. (Of course I've always believed that my own classes are both interesting and useful, but some of the others I've been less than sure about.) Good to see an article that takes on this topic and concludes that college is a solid investment. I'm making a difference after all!

A vicious article in the same newspaper attacks natural gas companies, arguing that their hype is far oversold. It claims that the costs of procuring gas and the likelihood of continuing to extract gas from the same wells over time are worse than the companies have been letting on. Clearly this topic deserves further investigation, but at the same time I think that rising gas prices would solve a lot of these problems. If and when the economy gets moving again and energy prices rise to match that vigor, a lot more plays will become economic. I'm not letting go of my stock just yet, though I am definitely interested to hear more.

Not as good news on subsidies

This article from the Washington Post is the talk of the economic blogosphere today, with MR's Alex Tabarrok and Mark Thoma also commenting.

In other news, the Senate approved a partial dismantling of the massive government support of ethanol.

Also an interesting piece on water in California.

Good news on food prices & subsidies

Story in the Washington Post today about how a midwestern Congressional representative is breaking the news to farmers that subsidies are likely to end, though apparently ethanol subsidies will continue. Perhaps surprisingly, generally the farmers are not putting up a fight, perhaps acknowledging their contribution to the deficits their local Tea Party affiliate is so worried about. Whatever the reason, this is the best development associated with the Tea Party that I've heard of yet. It also seems an opportune time to get rid of price supports, though with rising food prices, some supports are likely to become irrelevant soon anyway.

In other news, a record wheat crop in India should alleviate some of the pressure on food prices.

Cheap solar

Ft.com has an article about the price of solar in the US. Obviously the process is facilitated by rising prices of other sorts of energy, particularly petroleum, but these folks contend that solar will compete on price within three years regardless. The comparison assumes comparison not with baseline costs of energy via natural gas, but with peak energy figures. Also, they assume that technology improvements over the next few years will let them cut costs by 20%, which may or may not be possible. Nonetheless, such an achievement would be impressive. h/t to Marginal Revolution

Right level of government

I'm curious to talk to some of my libertarian friends about the recent NYT argicle on the development of Gurgaon, India. Oppressive conditions related to corrupt central and local governments led to private development of the city, so they should be shouting that from the rooftops. On the other hand, private industry and society are struggling with the failure of government to create and support infrastructure such as transportation, water, sewage, and security. IMHO, the optimal size for government is significantly greater than zero, though like all organizations government is open to corruption.

Speaking of finding the right size of government, clean energy advocates continue to press the Feds to adopt standards for energy conservation and clean energy development. US standards lag far behind those in England, for example, and as a result we waste a lot of energy but save ourselves those pesky loss prevention costs.

And speaking of costs, a nice little op-ed piece reflects on how land intensive solar and wind farms can be. The discussion of wind seems to overlook the fact that other simultaneous uses of land with windmills are hardly precluded (though of course some uses are) but the point is a good one. Now if only more attention were paid to the land use externalities associated with corn & ethanol subsidies, the local food movement, etc.

Update: Alex Tabarrok of Marginal Revolution responds (probably independent of my post) touting the points I made above and adding that the only problem was insufficient libertarianism, as a state agency was tasked with providing some of the infrastructure but failed. That doesn't really get at the basic problems, it seems to me, such as the complete lack of water or sanitation. Commenters on Tabarrok's post include people who have spent time in the area and find little to tout as well as libertarians who contend that whatever the shortcomings, the city is still preferable to the rest of the country. Still seems to me that the best answer is good government- if the best you can say about libertarianism is that it's just as good as kleptocratic cronyism, that's hardly a sturdy support beam in its defense.

Taking a step back, I suppose this could be just confirmation bias: I see what I want to see and so does Alex. Is that really all we can get out of this?

NYT on ag

Quick note on agricultural yields article in the NYT....