The Old Energy Problem

Do Investors actually spot a contribution they can make, or do they really only mean to avoid Speculation limitations in what they consider as a sound Speculative market? Agriculture has repetitively endured Raids of Speculation, rarely attaining the huge Profits desired by the Raiders, or proving of Investment value to Agriculture. I already estimate that there is an actual overabundance of ethanol Plant capacity, unless and until an alternate high-yield vegetation is found which can be grown on scrub land unsuitable for Food Crops. Monsanto pledges to increase Crop yields by 50% by 2050, but such Thinking is at best Wishful. The Dept. of Agriculture should have already issued a Warning of Crop tonnage shortfall, considering the necessary Human and Animal Feed requirement, if current ethanol Plant capacity runs at over what I estimate as 60%. This is a Problem which Economists must announce or contend.

This Post has nothing much to do with the preceding paragraph, except that when Arnold Kling speaks with his own voice, he should always be read. He outlines the differences between Billers and Players, insinuating that the best combination to become a Player lay in a marriage of well-paid Professionals where one is a Biller, and one is the new Player. The building of affluence stands as a real incentive to become a Player, but the fall-back positions are also vital. This can be extended to the greater Economy in a way, and also tie into the previous element, by stating that Speculation in Agriculture almost never succeeds, unless there is a heavy Profit, fall-back position for the Speculator within or without Agriculture.

Brad DeLong makes a good contribution on my previous discussion of Carbon Tax v. Cap-n-Trade. He states that he really does not have a preference between the Two, as pluses and minuses basically cancel each other out. I believe this is wrong! I also believe that a Carbon Tax would be easier to initial than Cap-n-Trade, simply because Gas is at $4/gallon. It only would take a Economics PR campaign. I believe whole-heartedly that a $1/gallon of Gas Carbon Tax would lower the current price of Gas by approximately $.80, so that the Tax would cost the Gas purchaser only as $.20/gallon. There is the additional impetus that the Carbon Tax would suppress total Gas price throughout the range of Prices for Gas, actually increasing over $.80/gallon if Gas Price dropped below $2/gallon, where there would be actual gain from the Tax–say about $1.40/gallon of Price decline We as Environmentalists do not really desire a serious decline in the Price of Gas, but as Economists We can prove a majority of the Carbon Tax would shift upon the Producers rather than Consumers. It finally has the value of lowering the potential of Speculation in Energy Commodities, as the elasticity of Consumption is stretched, and the initial Down payment of investiture becomes higher in actual amounts. lgl