Free-Market Environmentalism: Rush Limbaugh Still Has Much to Learn

There is a common misconception that true adherents of the free market – libertarians – are “pro-big business” and do not care about the environment. This came up recently on the Rush Limbaugh show as he admonished libertarians to explain to Bob Barr, the Libertarian Party’s presidential hopeful, “what libertarianism is.”

Now Bob Barr has many embarrassing deviations from hardcore libertarianism, but what had enraged Limbaugh was Barr’s flip-flop on global warming. A month ago, on Glenn Beck, Barr said unequivocally that global warming was a “myth.” Now Barr is hanging out with Al Gore and saying global warming is a “reality.”

To Limbaugh, believing in global warming makes one a liberal and not a libertarian. The truth is that there are libertarians who believe in man-made global warming and there are skeptics — but true libertarians are unanimously opposed to pollution, which is seen as an act of aggression against the rights of property owners.

In fact, this makes free-market libertarianism the most hardcore environmentalist creed there is. Robert F. Kennedy Jr., a leftist-environmentalist and National Resource Defense Council (NRDC) leader, has pointed out that “regulations” – for which leftist-environmentalists lobby – are really just permissions to pollute, whereas free-market environmentalism would hold polluters accountable for the damage they caused in civil court. This is the true free-market approach, and trust me, Exxon Mobil wants no part of it!

This is not, necessarily, what Bob Barr is calling for, and thus, Limbaugh’s admonitions – though perhaps inappropriately inspired – may have been no less on-the-mark. But for advocates of the free market, whether global warming is a “myth” or a “reality” is unimportant: Property rights are absolute, and they should not be abrogated by the Left’s regulations or by the Right’s indemnity for aggressive polluters.

Finally, the issue of climate change should be put into perspective. Even if it is real, it is not the be-all, end-all issue. After all, we have plenty of more immediate concerns that are just as threatening as the apocalyptic vision offered up by Al Gore’s An Inconvenient Truth. Here’s what Ron Paul, a global-warming moderate, said when asked if he thought climate change was a “major threat to civilization.”

“No. [Laughs.] I think war and financial crises and big governments marching into our homes and elimination of habeas corpus — those are immediate threats. We’re about to lose our whole country and whole republic! If we can be declared an enemy combatant and put away without a trial, then that’s going to affect a lot of us a lot sooner than the temperature going up.”

Now that, Rush Limbaugh, is what libertarianism is!

The Scarcity of Time and the Quality of Decisions: Why You Shouldn’t Worry About the Price of Gas

As the price of fuel goes up, shiny new SUVs look shinier than ever; we’re not washing them more often, we’re just driving them less—especially in Alaska, where some drivers pay more than seven dollars a gallon for gasoline.

But this is not another anti-cartel, anti-big business, anti-government rant. If you’re looking for a reason to be miserable about the state of the economy, you won’t find it here. I was a university student living in Alexandria, Virginia, during the 1973 Arab Oil Embargo. High fuel prices were a frustrating fact of life then, as they are today, and the lines at the gas station were a lot longer.

Instead of complaining about the spike in fuel prices from Anchorage to Alexandria, we should be grateful.

Think about it. If the U.S. has made progress in energy and the environment over the past forty years, the 1973 OPEC Embargo was a major turning point. As someone who remembers asking his parents why Pittsburgh smelled so bad when we drove through it in the late 1950s, I can attest to the fact that real progress has been made.

Big problems create even bigger opportunities to find a better way to do things. Whether we face challenges as individuals or as a society, problems are a necessary goad. They’re painful, but they’re the only thing that gets us moving in the right direction.

In The Harried Leisure Class, Staffan Linder described a society that needed to be goaded into a change of direction. Forty years ago, Linder predicted that the tempo of life would become increasingly hectic. He showed why increases in productivity in rich countries would lead not to an increase in leisure but to less free time for average wage-earners.

Linder’s main point was that economic growth entails a general decline not only in the quantity but also in the quality of leisure. Linder realized that “consumption time” would replace “culture time” in prosperous economies. “Just as working time becomes more productive when combined with more capital, so consumption time can give a higher yield when combined with more consumer goods,” he explained.

When tourists film family members climbing a Mayan pyramid, the “goods” added to the leisure activity—a camera, in this case—actually reduce the pleasure derived. Instead of imagining what it might have been like to scale the pyramid 1,000 years ago, we worry about the quality of the images we’re capturing.

“If total consumption time is constant,” Linder theorized, “there will thus be a decline in absolute figures in the time devoted to activities that are not particularly dependent on goods.”

Buying the most expensive digital camera on the market will hardly increase the pleasure derived from a candlelight dinner with your spouse. But a bigger and more expensive flat-panel television set will certainly heighten your enjoyment of the Super Bowl.

As productivity increases and goods become cheaper, people spend more time watching the Discovery Channel and less time trying to discover a vision for their lives. The bottom line: as the economy grows, we will have bigger and better Super Bowls and fewer candlelight dinners.

Chilling Questions

Social media websites attempt to increase the yield on consumption time by adding consumer goods to activities that aren’t dependent on them. Simulated experiences like Second Life, the online world where residents use real money to buy and sell virtual real estate, reveal deep confusion about wants and how to satisfy them.

The explosion of social media websites is a result of two things: our growing technological capability and our increasing scarcity of time. The Web, of course, is the perfect platform for speeding everything up; social media sites accelerate the process of meeting people and developing new relationships—and, presumably, of ending relationships when they go bad.

But are travelers on the Information Highway driving in the dark about the things that matter most? Does the Internet lead to decisions based more on impulse than on analysis? Does the accelerated pace at which all kinds of transactions take place on the Internet lead us to expect faster results in all areas of our lives?

Few economists today take the time to ponder the chilling questions that Linder asked 40 years ago:

“The requirement that the yield on time must increase as the level of income rises is a general one; it relates to time spent on all different purposes, including, as we have seen, in making decisions. And it must apply to the time spent in making all sorts of decisions, not just economic ones. Only half in jest, one can perhaps claim to find examples of a declining quality of decision-making in all possible fields. Is it possible that we devote less and less time to forming our opinions on a life after death? Is it that we spend less and less time thinking of the ultimate purpose of our economic growth?”

Economics is all about choices. In Linder’s view, a solution “presupposes that people desire to spend their time in a way that does not involve consumption centered on goods.”

Every time we hear someone complain about the high price of gasoline, we have a choice: we can go on worrying and complaining about it, or we can exchange a trip to Starbucks for quiet time at home. We can use the time to write a personal mission statement or to discover how to help a hungry child.

If you live in Alaska, you might even find a reason to be grateful for $7-a-gallon gasoline.

Loan Modifications: Adding Salt to the Wound

Record numbers of homeowners are trying to avoid foreclosure. One of the options available to such homeowners is loan modification. A loan modification is a permanent change in one or more of the terms of the loan allowing the loan to be reinstated and resulting in a payment the homeowner can afford.

For a loan modification to be effective, it must reduce a loan’s interest rate or balance or extend its term. Common loan modifications include:

1. Adding missed payments to the existing loan balance
2. Making an adjustable-rate mortgage into a fixed-rate mortgage
3. Extending the number of years you have to repay

The nation’s 27 biggest lenders have formed an alliance called Hope Now to help homeowners facing foreclosure. The biggest mistake here is that society is relying on the lenders to fix the problem – the very problem created by their reckless lending. Very little is known about the success rate of such loan modifications. Very little data is available about its effectiveness.

The loan modification process is simple, fast, and easy and saves the homeowner a significant amount of money compared to the time and costs involved with a traditional mortgage refinancing. At least that is what it is supposed to be. The reality is very different. Many homeowners have found that the modifications they received are unaffordable. The new monthly payments end up only slightly lower than the original monthly payments. According to a report by the State Foreclosure Prevention Working Group, about 32,000 loans which were recently modified are delinquent again.

Majority of the loan modification programs offer temporary and modest reduction in the interest rate accompanied by an increase in the overall principal. The increase is due to fees larded onto the loan. The homeowner has no option but to agree to these fees or risk losing his home. According to the California Department of Corporations, of the total 21,359 loan modifications between January and May this year, only 356 – a mere 1.3% – involved a reduction in the principle balance. The lucky few who did get a loan modification may be imperiled by the new terms. The homeowner desperate to keep his home cannot question the terms of the loan modification.

With foreclosures on the rise, the lenders are now inundated with calls from homeowners who cannot afford the monthly payments. The fact remains that the lenders are not geared to provide this service. Their service staffs were trained only to collect the checks at the end of every month. Most homeowners get no help in renegotiating their mortgages. The Working Group’s report reveals that about 70% of delinquent homeowners did not receive any help in renegotiating their mortgage.

There are no regulations governing loan modification process, nor is it supervised by the courts. The process varies from lender to lender. There is no standard process. It is high time that the government wake up and pass some laws to regulate loan modifications.