This technology can produce virtually unlimited quantities of fossil fuels with zero dependence on raw materials, agricultural land, crops or fresh water. It ends the hazards of oil exploration and oil production. It takes us to the unthinkable: liquid hydrocarbons on demand.

Joule, on using bacteria to convert sunlight and CO2 into fossil fuels, effectively making foreign oil, alternative fuel initiatives, and carbon emissions reduction (read every contemporary issue) immaterial.

The Mortgage Mess

(Originally posted on the Young Americans for Liberty blog)

Here’s a story that’s not receiving a lot of coverage thus far, but really brings home what a mess the housing crisis really is.

Supposedly, when you buy a home the bank lends you money up front and agrees to be paid back gradually, with interest.  A simple, straightforward relationship. But as we all now know, lenders in the past decade or so have been securitizing their mortgages.  This means that the bank doesn’t really own your mortgage.  Instead, mortgages are tossed into a pool and then sold to many different buyers.  So a piece of your mortgage is owned by a businessman in Taiwan, another by a retiree in Kansas, and so on. As the New York Times reports:

During the mortgage lending spree … home loans changed hands constantly. Those that ended up packaged inside of mortgage pools, for instance, were often involved in a dizzying series of transactions.

To avoid the costs and complexity of tracking all these exchanges, Fannie Mae, Freddie Mac and the mortgage industry set up MERS to record loan assignments electronically.

MERS (the Mortgage Electronic Registration System) was then listed as the owner of the mortgage, for legal purposes.  As long as housing prices continued to inflate, this worked out just fine.  But now that foreclosures rates are spiking, this jury-rigged system is receiving a trial by fire.

Efforts by MERS to foreclose have met with increasing legal opposition from many homeowners, and the courts have begun siding with them.  They’ve declared that MERS doesn’t have legal standing to foreclose on homeowners in default.  And this means that no one does.  Ownership of these mortgages is spread so far and wide that there is no single entity with the legal right to foreclose on homeowners.

When they call it the “mortgage mess,” they’re not kidding around.

The Long Run

(Originally posted on the Young Americans for Liberty blog)

Our government is coming to resemble the mob rule of true democracy more and more every day, and one unfortunate feature of democracy is that democratic governments tend to focus only on short-term problems.  Our legislators and our president are focused only on the next few years running up to their re-election campaigns.  The perverted filter which democracy imposes on reality explains the government’s long-running love affair with the inflationary economics of John Maynard Keynes, who is famous for his philosophy that “in the long run, we are all dead.”

As rational human beings who deal with the real-world results of government monetary policy, it is useful for us to look at the implications of these policies in the long run.  The effects of inflationary monetary policy are observable throughout history, from the fall of Rome to the current situation in Zimbabwe.  The pattern goes something like this:

1. Government seizes control of the monetary supply.
2. Currency debasement due to increased supply of money.
3. Hyperinflation of prices begins to manifest.
4. People begin to severely discount government money, or refuse to accept it altogether.
5. Legal tender laws are put into effect, backed (as with all government regulations) by the threat of violent death.
6. Price controls are enforced to combat inflation.
7. Shortages and chaos arise, due to repressed inflation.
8. People dump money entirely and invest only in real goods.

The government has long controlled the monetary supply, and the currency has been severely debased due to the inflationary policies of the Federal Reserve.  We already have legal tender laws in effect that prohibit us from refusing government paper, however useless we might think it is.  The specter of hyperinflation has haunted our country ever since it’s founding, when over-issuance of colonial paper by the Continental Congress nearly starved George Washington’s army at Valley Forge out of existence.

Government officials may choose to ignore long-run problems, preferring to buy their next term in office by offering “free” healthcare, or cash for your clunker.  But we have to live with the results of their foolishness.  We cannot afford to let them ignore reality.