Mitt Romney: No Apology: Book Analysis: Chapter Nine: Running Low. (The Case for Nuclear Energy. What About The Waste? )

December 15, 2010 by · 1 Comment
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Romney in this chapter addresses Global Warming and Energy in just 23 pages.


Global Warming

Romney recognizes there is a global warming trend, however he is not sure if it is a natural fluctuation in temperature, caused by man’s activities or by both. The current unanimity among scientists that it is caused by man’s activity on the planet is not an established fact. Scientists have been wrong before. Earthquakes were once thought not to be caused by the movement of tectonic plates. Now the reverse has been shown to be true. In the 20th Century some scientists believed that we were entering a new Ice Age.
Whatever the source or cause of Global Warming, Romney recognizes that it can have severe consequences to the planet in terms of climate change. The melting of the ice caps and the rise in sea levels will devastate low lying islands and coastal cities. Global Warming will affect agriculture and the availability of arable land among other things.
Tied in with Global Warming is our dependence on fossil fuels which are the biggest emitters of the greenhouse gases that are believed to cause Global Warming. Our dependence on oil is a major problem because imported oil adds about 300 billion dollars to our yearly current account deficit. Further our need to import oil enriches and empowers some of our worst enemies in hostile countries in the Middle East and South America.
The price of oil is also controlled by the oil cartel which constrains supply and makes it necessary to produce high cost oil first and then sells the cartels cheap oil at the higher price. Further, while the supply of high cost oil is running out the cartel reserves are greater. In the not too distant future, when non- OPEC nations no longer have domestic oil the cartel will have a complete monopoly on oil and the importers of oil will be at their mercy.
Peak Oil
Peak oil is that point where daily world production does not meet the daily demand for oil. When this will happen is not known with any accuracy but it is likely to happen sometime in the foreseeable future. When this occurs the price of oil will skyrocket and only the richest nations will be able to buy the oil necessary to maintain their standard of living. (This will also create political unrest and maybe even war to determine who gets the needed oil.)

Therefore we must find alternate sources of energy other than oil and that new source should be clean energy. The most feasible alternative to oil is nuclear power. The technology is present and has been greatly improved upon since the first generators were built. The cost to produce can be reasonable and can be made cheaper if governmental, red tape can be eliminated. Vermont now gets 73% of its power from nuclear. France gets 80% of its power from nuclear sources and has for many years. The United States has 104, essentially, trouble free reactors at 64 sites. In the short term (and maybe the long term) this appears to be the most practical alternative to imported oil and fossil fuels in general. Further the waste problem is not insurmountable. Eleven countries around the world are building 48 new reactors. Many of these countries have long experience with nuclear energy and one has to ask themselves, would they be building new reactors if they were unsafe environmentally or economically unfeasible? (This is the weak point in his argument in behalf of nuclear. He doesn’t address the waste problem in any depth.)
Other Alternatives.
Coal, gas, ethanol, hydrogen, wind and solar power are some of the alternatives advanced today and they all should be developed. Coal can be processed so it emits less greenhouse gases; gas production can be increased as well as oil production domestically but probably never in sufficient quantities to meet our energy needs. Wind and solar probably will never be able to meet internal energy demands alone or even to together. Hydrogen is still in the development stage and when it will become feasible is unknown. All these alternatives should be developed, but even taken together they are unlikely to meet our energy needs. The best source of energy right now is nuclear.
Romney believes that Cap and Trade is too difficult to enforce or obtain agreement on a world basis. Why should India and China, two of the largest emitters, who are striving to raise their standard of living, restrict themselves because of the Industrial Revolution practices by the Western Democracies that created the pollution problem in the first place? Also it is a disguised energy tax.


Conservation is also an alternative and many measures have been taken and will need to be taken to conserve energy from wherever the source, but it alone will not solve the problems of Global Warming or the need for ever increasing energy.
He points out that while oil appears to be the cheapest source of energy it actually has many subsidies and costs from climate change to favorable tax treatment to the maintenance of and Army and Navy on a Worldwide basis to secure its production and delivery to the United States. If these costs were added in at the pump then we would realize just how much we really pay for a barrel of oil and this would incentivized the U.S. to become energy independent.
Romney is optimistic the United States, which has solved complex problems in the past, will solve these problems in the future.


Mitt Romney: No Apology: Chapter Five: Part A: A Free And Productive Economy: Book Analysis. A Nelson Rockefeller Republican or Reagan Republican?

November 1, 2010 by · 3 Comments
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 The first part of this chapter concerns itself with the fact our Gross Domestic Product is the foundation for our standard of living, ability to defend ourselves and the basis of our being the preeminent power in the world. He deals with Social Security and entitlements in a later chapter.

Romney in writing this book says he consulted with experts and friends on the various chapters. So the beginning of this chapter is a text book explanation of capitalism and how it works through, innovation, investment, creative destruction and the statement that capitalism requires a free society. Romney adds some anecdotes of his experience as a venture capitalist as a partner at Bain and Company.  However the people who contributed to this book may be candidates  for his administration if he is ever elected.

 Capital formation, innovation and education create the matrix that drives the creativity and technology that makes  our society dominant in the world.

In our society there has to be pools of  capital or methods of raising capital with educated risk takers to find and support the creators of new inventions and technology. Over regulation, unnecessary taxation and deficit spending  are the enemies capitalism  

In Romney’s view government will never succeed in the venture capital business however once a new invention or  technology has been identified and recognized for its potential but requires massive capital investment then the government may become involved.

The Post Office is a necessary service in this country. In the beginning it was organized and promoted by the government. However it has never been profitable and remains so today even though it has been privatized. (The USPS remains unprofitable because by law it must carry and deliver certain types of mail at reduced rates). Fed Ex and UPS are innovative and profitable private companies allegedly because they are private and would go out of business if not profitable. (True, but they have taken the most profitable part of the postal business and don’t have to charge reduced rates to support communication in the public interest. The reason the government created the postal service in the first place was not for profit but to foster the exchange of ideas.)

IBM on the other hand could never master the desk top computer business and lost control of its own creation to more innovative companies. (This may have been a conscious decision on the part of IBM because it had survived a long and bitter antitrust law suit brought by the government. So it probably did not want monopoly status in the computer business.) Romney’s point is well taken that a free and productive society creates pools of capital, the universities, individuals and institutions that create new inventions and technologies. (True up to a point: The Tennessee Valley Authority, rural electrification and the benefits they have created are but one example that required government intervention because the electric companies although wealthy and in possession of the necessary expertise would not do it.)

Romney believes some regulation by government is necessary but over regulation tends to stifle productivity, creativity and creative destruction by maintaining certain inefficiencies for political reasons. Unions are also necessary to give voice to the needs of the workers but they also can stifle productivity and necessary changes through work rules, strikes and unsustainable benefit programs; witness the automotive industry (and also the steel industry.) Therefore a balance between these forces must be struck to keep  GDP, creativity and innovation high.

In writing this chapter Romney appears to be  more of a Nelson Rockefeller Republican rather than a follower of Ronald Reagan or even the Bush II wing of the Republican  Party in the case of domestic policy. Maybe because he actually got through Harvard Business School on his own rather than  on his father’s clout.

However he is for lower taxes and elimination of the deficit. Apparently he believes that lowering  taxes gives rise to greater investment which will expand the economy and government revenues needed to reduce the deficit will increase. (This sounds like a good idea but the fact is that  the majority of economists agree American companies are holding billions if not trillions of dollars in their treasuries and are not investing in the American economy. Probably because globalization is draining the manufacturing jobs from this country so there is no need to invest in new factories or equipment here. Green technology is still in the venture capital stage but it could be a venue for investment by the corporations with swollen treasuries. Major infrastructure investment like rebuilding highways and bridges have usually been a government responsibility.)  So far Romney tells us what worked in the past but does not give concrete ideas what will work in the future. Also he fails to point out that as a percentage of GDP debt service is now less than in the 1980’sand 90’s (3% : because interest rates are lower.) His idea of reducing taxes and the deficet, which is  at a higher percentage of GDP than in the 80’s and 90’s and government spending to bring us out of the recession are not valid criticisms of the present administration. Government spending should be higher during a recession to stimulate the economy but taxation should be lower, which Obama proposes for the middle class but not the top 2% of tax payers. (the 2% would have a diminimus effect on the economy anyway.) So technically  but not sustantively, he is half right.

His problem is in order to win the Republican nomination for president he must secure the support of the conservative wing of the Party who, for the most part, have an unreasonable view of fiscal and monetary policies.

These are the people who are always looking to the past for the solution to problems like energy, globalization, stimulus packages and tax policy not to the present and future for creative ideas and policies.