Monday, March 19, 2012

from Mises org. : Hank Hill vs. the Bureaucrats

Hank Hill vs. the Bureaucrats

Mises Daily: Monday, March 19, 2012 by 

King of the Hill: Flush with Power

Thanks to Adult Swim re-airing King of the Hillfive nights a week I recently caught an old episode that has expanded my list of approved politicians to now feature two: Ron Paul and Hank Hill. The episode is "Flush with Power" from season four.

It makes sense that the only politician in American history whose integrity would rival Dr. Paul's is a fictional cartoon character.

In this episode, the Texas town of Arlen is experiencing a severe drought, and the local government has instituted water-rationing policies. Each household is permitted to use only a certain low amount of water each week until rain returns, and an army of bureaucrats has been unleashed to patrol the neighborhoods of Arlen, randomly checking meters and cracking down on those who defy the policy.

Rationing is a very typical measure imposed by central planners ignorant of economics. Much like the saying that a person who has a hammer sees everything as a nail, city managers see every societal problem as something that can only be solved by the exercise of their power. As if they are wizards holding magical wands, they believe each and every trouble in their jurisdiction can be fixed by regulations and policies.

This rationing policy is very bad news for Hank Hill. Hank has a lush lawn he proudly maintains, but this requires a lot of water. In order to stay within the restrictions of the rationing policy and still leave his family with enough water for their needs, Hank has to let his yard suffer.

If, instead of rationing, the Arlen city government allowed the price of water to freely fluctuate according to supply and demand, people like Hank would be much better off. The price of water would rise, which would result in people who don't value water as much reducing their consumption. This would leave more water left over for those who value the water more and are willing to pay the higher price. With rationing and price ceilings, yes, the price is lower, but the supply is extinguished much faster.

An even better solution would be for the city mangers of Arlen to completely demunicipalize water distribution and let the market handle it. Entrepreneurs would compete with each other over who can offer the highest-quality water services for the lowest price, and the victor would be awarded with the highest profits. This profit motive would make new innovations in water distribution much more likely. One entrepreneur might buy the rights to a water source in another well-hydrated territory and pipe it into Arlen. Another might invent a new, cheap way to desalinize the ocean water surrounding Texas.

Another, more pitiful solution the city managers of Arlen offer is the promotion of inefficient low-flow toilets being issued for "free" (at the expense of the taxpayers being forced to pay for them). This too is a typical response of the central planners: reduce your quality of life by using lower-quality products, citizens, and shut up. Rather than owning up to the problem being the result of foolish government management, the bureaucrats place the blame on the citizens for using the "wrong" toilets. We not only see this with the American government's present policy on toilets, but also with light bulbs and cars.

In the market you never hear entrepreneurs blaming their customers for problems. The customer isalways right, and entrepreneurs slavishly have to find ways to continue pleasing the customer. If an entrepreneur held a press conference and told his customers that they need to quit complaining and learn to accept lower-quality products, he would go bankrupt overnight; but with government it is always about making the tax-slave citizens sacrifice and suffer, and about using violent force against those who refuse.

Hank, desperate to have water for maintaining his lawn, breaks down and gets a low-flow toilet.

The toilets are immediately revealed to be inferior products — requiring many more flushes to dispose of waste than normal toilets. This is a typical result of the government's remedies: not only are they usually unsuccessful, but they also exacerbate the problems they were allegedly intended to solve.

All the extra flushing has resulted in the Hill family using much more water than they were using with the old "eco-unfriendly" toilet. By now a significant number of Arlen residents are using these low-flow toilets: the city has a genuine decivilization crisis developing. Their standard of living isdecreasing. They have less water and their waste is harder to dispose of.

Very quickly Hank expresses his desire to get his old high-flow toilet back, but he discovers the old high-flow toilets that are collected get smashed up and dumped into the ocean to aid in the development of coral reefs. When Hank stops by the hardware store to buy a new high-flow toilet he discovers that they have now been outlawed entirely in his county. This is similar to the quickly abandoned "cash-for-clunkers" program of the Obama regime that consisted of using tax dollars to buy perfectly functional but "eco-unfriendly" vehicles, destroy them beyond repair, and replace them with "eco-friendly" cars. The decivilizing effects were and remain many. There were fewer used cars available on the market, which raised the price of used vehicles and hurt the poorer people who depend on the used-car market to satisfy their transportation needs. Each and every tax dollar that was spent on this program is gone forever, leaving the economy as a whole poorer and our tax burden larger. And in the end, it turns out the "eco-friendly" cars aren't even any better for the environment.

Rightfully angry that bureaucrats have made it illegal, as Hank puts it, to "install a working toilet inyour own bathroom!" Hank decides to go to the next Board of Zoning and Resources meeting and lobby against their ban on high-flows.

As Hank begins making his case to the board, the head bureaucrat, Nate Hashaway, cuts him off and announces that in order to discuss an issue at the meeting it must be formerly added to the agenda, but only a board member may add subjects to the agenda. Hank is politely told to shut up and the gang of bureaucrats moves on to a more important matter — wishing one of their members a happy birthday.

Hank's powerlessness against his local government is quite reflective of American politics. Even the smallest, pettiest bureaucrats have no concern at all for the citizens they rule over. The political class doesn't listen to reason. We're simply expected to shut up and unconditionally obey their every foolish, illogical, or immoral command. If a local zoning board doesn't care what you think, do you really believe your congressman or senator does? For every one US representative there are over 700,000 Americans. Your congressman, contrary to what he says in his campaign ads, does not care what you think. For every US senator there are over 3 million American tax slaves. How can one person possibly represent the interests of 3 million individuals? Your senator simply doesn't worry about it, that's how.

As the condition of his lawn worsens, Hank decides to run for office on a platform that consists completely of repealing the high-flow toilet ban. It turns out that a seat on the Board of Zoning and Resources has been empty for four years and Hank automatically wins the election upon submitting the paperwork.

Hank introduces a motion to repeal the ban at his first meeting with the board. He's shot down again. Nate Hashaway is a bit more defensive this time.

After the meeting is adjourned and the members are leaving, Hashaway slyly asks to speak with Hank in private. Turns out Hashaway has a secret stash of high-flow toilets. He offers to give Hank one if he agrees to shut up about the toilet situation. Hank heroically turns the offer down due to the gross immorality of a lawmaker not following the laws he himself commands others to obey. Lawmakers seldom follow their own rules the way they say we must. One example is how elite congressmen and senators are often exempt from the humiliating TSA search procedures the rest of us endure. Antigun politicians often use tax dollars to pay for armed security for themselves. Elite environmentalists seek to force us to reduce our fossil-fuel consumption as they fly around on private jets that emit more carbon emissions in a single trip than most cars emit in a year.

By now Hank's lawn is nearly dead, and Hashaway has launched a surveillance-and-blackmail operation against Hank, but Hank's son, Bobby, discovers some dirt on Hashaway just in time: Hashaway is the exclusive seller of the low-flow toilets.

Corporatism, also known as fascism, is collusion between businesses and the state. Examples include businesses lobbying for tariffs to protect them from foreign competition (at the cost of domestic consumers having to pay more for goods), businesses lobbying for competitor's products to be banned entirely (as with hemp and marijuana), businesses lobbying for monopoly privileges where the government outlaws their competition by instituting barriers to entry in the market, or any other scenario where private interests use the government to gain advantages at the expense of consumers.

Corporations often fear a free market, because in this scenario there is no government there to protect them from new innovators and young entrepreneurs. In a free market, all businesses must be on their toes, constantly innovating and willing to evolve. Corporations instead frequently favor a vast regulatory state that they can use to beat up their smaller competitors. (For a good example of Walmart doing this with minimum-wage laws, see Lew Rockwell here.)

This political thug Hashaway is using his government power to make people pay for his inferior toilets, and then he bans the competing toilets. This is similar to the case of Michael "Skeletor" Chertoff promoting the installation of naked body scanners in airports during his time as the secretary of Homeland Security and then immediately going on to work as a well-paid consultant for the primary company that makes them.

Not backing down, Hank reveals Hashaway's conflict of interest at the second meeting with the board and again introduces a motion to repeal the high-flow ban, but this time he begins a filibuster before the voting finishes.

As Hank reads his wife's very boring columns from the local newspaper, the members of the board eventually start needing to use the restrooms. One by one they go and come back, obviously frustrated by the poor performance of Hashaway's low-flow toilets. All the other board members can clearly hear each restroom occupant having to flush multiple times. After several hours, both the men's and ladies' rooms are out of order with broken toilets.

All the board members, except Hashaway, vote for the repeal, and toilet freedom is restored in Arlen.

Hank immediately resigns from the board.

Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
 CEL: 93934521
Santiago- Chile
Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile

Obama: U.S. Energy Future Depends on Rare Earth Metals

Obama: U.S. Energy Future Depends on Rare Earth Metals

Will a near-monopoly in rare earth metals do for China what oil did for Saudi Arabia?

Not if the U.S. government has anything to say about it.

President Barack Obama made that clear last week when he joined the European Union and the Japanese government in filing a complaint with the World Trade Organization (WTO) about China's manipulation of the global market in rare earth metals.

"We've got to take control of our energy future and we cannot let that energy industry take root in some other country because they were allowed to break the rules," Obama said in a press conference.

It's a clear signal that Obama will do anything to keep China from maintaining a stranglehold on rare earth metals-a set of 17 minerals that are responsible for powering everything from hybrid cars to self-cleaning ovens.

More importantly, the filing is an acknowledgement that the minerals represent a crucial source of renewable energy that are now essential to the way we live.

Rare Earth Metals: Easy to Find, Hard to Mine

Rare earths have been in the headlines a lot recently.

That's because demand for rare earth metals has skyrocketed in the past few years and is likely to grow exponentially in the years ahead.
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The pace of technological innovation is accelerating and the world is producing and consuming more high-tech devices than ever before.

After the rare metal Europium was introduced as a source of the color red in TV sets in 1967, their use has expanded to MRI and x-ray machines, DVDs, mobile phones, lasers and many other devices that we use daily.

More recently lanthanum has become a key component of hybrid car batteries, making it critical to Obama's campaign to double the fuel efficiency of the American automobile by 2025.

Crucial as they are, the elements are hardly rare. They are found scattered around the globe in the earth's crust and are as commonplace as copper and lead.

The problem is, they are usually found in small quantities, making them difficult to cost-effectively mine. They also come with severe environmental hazards because they are often found along with radioactive materials or other harmful substances.

China's Near- Monopoly on Rare Earth Metals

As it turns out, China has vast rare-earth deposits, mostly in Inner Mongolia. The government has also heavily subsidized state-owned mining companies and allowed them to operate without strict environmental oversight.

That's made China the biggest producer of rare earths, with a more than 95% share of the global market.

Over the past decade, demand has tripled to 125,000 metric tons a year and could exceed 200,000 tons by 2014, the BBC reported.

Prices for rare earth metals soared in 2010 after China slapped a temporary ban on exports in the middle of a trade dispute with the U.S. and Japan. China later dropped the ban in favor of cutting exports to 93,800 tons per year.

But China isn't just choking off supplies. It's also stoking its domestic mining industry with favorable pricing as a ploy to get Western manufacturers to move factories inside China, according to a study by Bloomberg Government.

The average Chinese export price of neodymium oxide - a key component in computers - was $321 per kilogram in the summer of 2011, 66% higher than the domestic price and a 563% increase compared with the same period in 2010, the study said.

The inflated prices have put Western manufacturers on the hunt for alternatives.

"You are seeing a lot of investment by high-tech firms on research to become less reliant on these materials," Matt Robinson of Moody's Analytics told the BBC.

Miners Expand

Beijing has denied the allegations in the WTO case, saying that it enforces quotas to ensure there's no environmental damage from excessive mining.

The WTO's rules require China to hold talks with the U.S., the EU and Japan within two months. But the WTO cannot impose a solution, setting the stage for a protracted negotiation and perhaps even a trade war.

Meanwhile, mining companies have been watching the developments with an eye towards cashing in.

Australia's Arafura Resources Ltd. (ASX: ARU) is raising $1.05 billion for a rare earth project.

And Colorado-based Molycorp Inc. (NYSE: MCP) has restarted the largest U.S. rare earth mine in California, after it was shuttered in 2002 due to environmental issues.

Commodities expert Peter Krauth says the rare metals dispute is just another example of what's been going on for decades.

"Over the last 160 years, humanity has dug up, refined, processed, and consumed all the easy-to-get minerals. Economically viable supplies of much of the "stuff' we take for granted are being depleted at an exponential rate."

Krauth feels a succession of historic profit opportunities await those who know how to leverage this predicament.

In fact, soon virtually every substance vital to modern life will become enormously expensive and profitable for investors who know how to play it.

As commodities and mining expert Peter Krauth explains in his latest report, "today's scarcity and soaring costs could spur the biggest investment gains in history."

To read Peter's latest free report click here.


Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
 CEL: 93934521
Santiago- Chile
Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile

iRobot's (Nasdaq: IRBT) Timing Couldn't Be Better For Investors

iRobot's (Nasdaq: IRBT) Timing Couldn't Be Better For Investors

iRobot Corp. (Nasdaq: IRBT) made the right decision.

And the Pentagon just proved it.

iRobot Corp
(Nasdaq: IRBT)

iRobot Corp.   27.32  -0.42
The small-cap robotics leader knows only too well it needs to increase its private sector sales as America works to cut defense spending.

That's why iRobot Corp. has reorganized to target the health care, retail and security industries.

For investors, the timing couldn't be better.

After all, the Defense Department has announced several new robotics breakthroughs in recent days.

This shows the U.S. military is still completely committed to using robots to win the War of the Future.

But now that American troops have left Iraq, the Pentagon's top brass is pinching pennies like never before.

And yet...it has new robots to brag about.

In a moment, I'll tell you all about them. But first...

Breaking Down iRobot's (IRBT)
Change of Course

You may recall that iRobot's stock recently sold off when the company said it expected slow sales of "warbots" till the end of the year.

Just a week later the company also revealed it will reorganize in an effort to expand into new target markets to boost sales.

iRobot will keep its current two main divisions in place. One centers on home robots, and to date has moved some 7.5 million units.

I'm talking about robots like the Roomba that vacuums your floor and the Verro that cleans your pool.

Military sales will also have its own division. So far, iRobot has sold 4,500 warbots.

Today, iRobot plans to pursue different markets as it shifts its focus to a third unit − emerging technologies.

You see, iRobot has always been something of a bipolar firm. Its machines can clean the floor or dispose of bombs − but do little in between.

Now, the company wants to find more uses for Ava, its mobile robotics platform. CEO Colin Angle told the media he wants to use Ava to beef up healthcare sales.

With that in mind, iRobot invested $6 million last year in InTouch Health. That firm provides "distance medicine" so doctors can consult with patients in a wide range of venues.

But Angle believes Ava can do much more than that. He told the Boston Globe he wants to pursue "mobile, connected robots for security and retail."

All three sectors are "multi-billion-dollar markets ripe for disruption with our technology," Angle told the paper.

Look at it this way: a version of Ava could sell goods at the mall by day then guard the stores at night.

Clearly, it's too soon to predict if Angle will execute against his new strategy.

But if he does, iRobot could add strong new revenue streams to a company stuck between military and home sales.

This is the kind of move iRobot shareholders need to see.

It means the company understands the broad challenges it faces and has a plan to deal with them.

Robots are Better than the Real Thing

Ironically, despite tight budgets, the Pentagon seems increasingly committed to using even more advanced robots.

Take the case of the Cheetah. It's a cat-like bot that can gallop at 18 mph on a treadmill.

That gives it the land speed record for robots with legs. In fact, that's 50% faster than the previous record set by the Massachusetts Institute of Technology back in 1989.

Privately held Boston Dynamics is developing a prototype with funding by a research arm of the Pentagon known as DARPA.

It's no wonder the company named the bot after the world's fastest animal.

The mechanical cheetah may eventually reach speeds of 40 mph, just over half the highest speed of the biological cat.

But the real cheetah gets tired. Not so with a bot − it keeps working till it runs out of juice. You can watch a YouTube video of it in action here.

More breakthroughs are in the works. Boston Dynamics is pursuing a prototype human-like robot.

Called the Atlas, the bot can walk upright. It also can use its hands for balance while squeezing through narrow passages on surveillance or emergency rescue missions.

Meanwhile, the Navy also is developing a different humanoid bot for key rescue missions. These entail fighting fires on board ships.

Scientists at the Naval Research Laboratory have high standards for the firefighting bot. They want it to move on its own through narrow passages and to use the ladders unique to ships.

They're designing the bot with lots of advanced sensors − navigation, gas detection and infrared vision that sees through dense smoke.

The bot's arms should allow it to throw chemical grenades that suppress fire.

Naval researchers foresee a day when the bot can understand and speak natural human language.

At a minimum they want it to respond to hand gestures so it can accurately interact with humans in a crisis.

Now you know why I keep saying we are in the very early stages of the robotics revolution.

Then again, this is the Era of Radical Change.

Robots are riding an unprecedented wave of high-tech innovation. In the near future, they will fly planes, drive cars, and help colonize planets.

Along the way, they will make savvy investors lots of money. In the meantime, key an eye on iRobot.

It's one of the few robotics "pure plays" out there.


Rodrigo González Fernández
Diplomado en “Responsabilidad Social Empresarial” de la ONU
Diplomado en “Gestión del Conocimiento” de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
 CEL: 93934521
Santiago- Chile
Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile