Quotulatiousness

April 13, 2016

The bureaucracy will always be with us

Filed under: Bureaucracy, Europe, Military — Tags: , , , , , — Nicholas @ 02:00

Strategy Page recounts some of the recent the bureaucratic snags between NATO countries in eastern Europe when troops need to cross inter-alliance borders:

In early 2015 Operation Dragoon Ride rolled through Central Europe to send a message to Russians. From March 20th to April 1st, an US Army squadron returning from Atlantic Resolve NATO exercises took an unusual route back to its base in Germany, after spending three months in training facilities in Poland, Lithuania and Estonia. The unit involved was the 3rd Squadron (battalion) of the 2nd American Cavalry Regiment. This unit refers to itself as dragoons (an ancient term for horse mounted infantry) and the movement operation was called Dragoon Ride and the apparent reason for it was to demonstrate to the locals as well as the Russians that American armored units could reach the East European NATO nations by road, as well as by ship, aircraft or rail. Dragoon Ride purposely rode close to the Russian border, often in full view of Russians and Russian media. The American troops frequently stopped in towns and villages so the locals could meet their allies, take pictures and quietly enjoy the pain this demonstration was causing the increasingly aggressive Russians.

But what was not publicized, and what the Russian government knew full well, was that this road movement took the efforts of hundreds of unseen troops and bureaucrats to deal with the paperwork. For all of 2015 it required nearly 6,000 travel documents to be prepared, filed and approved to get foreign military vehicles across East European borders. Some of these documents take several weeks to get approved and operations like Dragoon Ride required hundreds of them and nearly as many NATO local government personnel were involved with this paperwork as were actually participating (500 troops) in the actual Dragoon Ride (of 120 vehicles). While all these rules and approvals would not stop invading Russians they would, in theory, slow down reinforces from the West.

The pile of paperwork and weeks required to handle it were used as very concrete evidence to persuade the East European nations to streamline the process, a lot, or have themselves to blame if reinforcements did not arrive in a timely fashion. As usual a compromise was worked out. Thus eight NFIUs (NATO Force Integration Units) were organized, each consisting of 40 troops trained and equipped to handle the paperwork and traffic control measures required to get military convoys across eastern borders as quickly as possible. The NFIU work out of embassies and stay in constant touch with the border control bureaucracies of the East European nations involved. NFIUs also arrange for rest areas and resupply for the convoys.

QotD: Why do gasoline prices rise at the moment crude oil prices rise?

Filed under: Business, Economics, Quotations — Tags: — Nicholas @ 01:00

One part of the explanation is that gasoline refiners are likely now switching to the production of summer-grade mixes, which are more costly to produce than are winter grades. But even if such switching is not taking place, we nevertheless expect prices at the pump to rise the moment crude-oil prices start to rise regardless of the prices that gasoline retailers paid for the fuels that they are currently selling. Furthermore, it’s good that prices at the pump rise as soon as crude-oil prices start to rise.

The reason […] is that markets are forward looking. If crude-oil prices start to rise today, this fact means that crude oil is today more scarce, relative to anticipated demand, than it was yesterday. Given this reality, we want consumers to start immediately to economize further on their use of gasoline, and we want refiners to have adequate incentives to refine enough gasoline to satisfy consumers’ anticipated future demands. Rising prices at the pump today promote both of these desirable responses.

But there’s an even deeper point: the value of something is not what the owner of that something paid for it or what it cost the producer of that something to produce it. Instead, the value of something is what people are willing to pay for it. And there’s nothing at all unfair or economically harmful about an owner of something selling that something for more than he or she paid for it. Suppose that today you buy 10 shares of Apple, Inc., at $100 per share. Further suppose that one year from today the price of Apple stock rises to $150 a share. Would you be wrong or unethical to sell your shares next year at $150 a share (or at any price higher than $100 a share)? After all, you paid only $100 a share to get them.

Of course you would not be wrong to sell your shares at a price higher than what you paid for them. What’s true for you and your Apple shares is true for all economic goods.

Donald J. Boudreaux, “Markets Are Forward Looking (And That’s Good)”, Cafe Hayek, 2016-03-18.

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