Gas stations vs. department stores

I thought this chart here from the Illusion of Prosperity blog was pretty telling, and I think it says just about everything you need to know about what Fed policy has done for and to our economy over the last decade-plus (obviously the internet has a role to play here as well, but that dynamic alone cannot and does not account for a tripling of the ratio in a dozen years). Regardless of the reasons behind the spike in this chart, it's clear that inflationary monetary policy is powerless to restore lost retail jobs, but certainly ensures that we all spend more and more of our paychecks at the pump and the grocery store.

Pretty awesome, right? Hooray, Bernanke!

And hey, while we're at it, let's share another semi-terrifying chart from the same blogger.

Good times. Sooner or later, nobody will have any home equity at all, and then we'll all be living on Easy Street. Which will be good, because gas will be so expensive that we won't be able to afford to drive to any other streets. I can't wait.

Quote of the Week (I love Canada edition)

Couple of blog posts coming your way today, starting with your Quote of the Week, which will be a little lighter for a change. I gave some serious consideration to this eye-opening quote from Vladimir Putin, extolling the virtues of group sex (seriously, can you imagine Obama dropping a bomb like that on the campaign trail?), but nahhhh.

Instead, I'm going to keep things a little closer to home, heading up to America's hat. From Quebec...

This week's QUOTE OF THE WEEK

"Someone (possibly wearing super villain gear, although that’s pure speculation on my part until they’re apprehended) broke through security at the Global Strategic Maple Syrup Reserve in Quebec and made off with $30 million worth of Canada’s sweetest export."
                                         - Brad Moon, Wired
 
Whoa, whoa, whoa... Canada has a Strategic Maple Syrup Reserve? That... is... AWESOME.

Here in the good old U.S. of A., we maintain a Strategic Petroleum Reserve, to be tapped during times of supply disruptions or other emergencies (like, you know, a Presidential election... side note, amazing that the link there doesn't mention Fed policy at all when discussing the impacts on crude oil prices... savvy). At any rate, a petroleum reserve is one thing, given the outsized impact that fuel prices tend to have on our economy. But up in Canada, it's apparently maple syrup that's the prized commodity. Terrific.

This news item plays into all of the awesome stereotypes that I already want to have about Canada, so I'm not going to bother to do any further research into this matter. Canada is an awesome land of flapjacks and maple syrup and flannel shirts and lumberjacks and hockey and all of those things combined into something called "lumberjack hockey", and that's how I'm going to leave it. I love you, Canada.

[Wired]

The carbon footprint of flowers (WTF??)

I was listening to this Freakonomics podcast yesterday when I heard host Stephen Dubner offer up a factoid that absolutely shocked me.

With Mother’s Day coming up, we thought it’d be interesting to look at the cut-flower industry. Americans spend about $12 billion a year on them. Mario Valle, a wholesaler at the L.A. Flower District, tells us that Mother’s Day is easily his biggest day of the year: “It’s 30 percent of my year. Everyone has a mother!”  

So where do all those flowers come from? It turns out that about 80 percent of all cut flowers sold in the U.S. are imported. The leading producers are Colombia, Ecuador, and Costa Rica, places where the sun shines roughly 12 hours a day, year-round. The flowers must be refrigerated immediately after they’re cut; most are flown to the Miami International Airport, which handles about 187,000 tons of flowers a year, and then trucked to their destination. 

We live in a day and age where people are obsessed with “food miles” and the carbon footprint of everything they consume. So where is the outrage over these globe-trotting Mother’s Day flowers? 

You read that right... the flowers are flown to Miami, and then TRUCKED all the way across the country to Los Angeles, where Mario sells them to local florists and other mother-lovers. You can only imagine how much fuel is used in a year to bring these flowers from Costa Rica to our lovely mothers and wives for Valentine's Day, Mother's Day, anniversaries, etc.

It says a lot about our modern society that we actually have to think about the carbon footprint of flowers--somewhere along the line, I think we got some things backwards here.

It's amazing how infrequently things like this are mentioned when we discuss our nation's energy policy and what we can do to become more energy-independent. Ultimately, very few of us spend any time at all thinking about how the things we buy end up in the stores we buy them from (not to mention thinking about energy hogs in our own homes). If we did, we might make different decisions.

Sure, we might intellectually know that our toys are "Made in China" or that the shrimp we're buying is from somewhere in Vietnam (or, if they have no eyes, Louisiana).  But do we actually think about who exactly is farming those shrimp, or how they're managing to get them all the way to us in the middle of the United States (or how long it takes, or how much fuel it requires, or how many people touch those shrimp along the way)? Usually, the answer is no. So how can we be expected to change our behaviors if we simply don't know what exactly is going on (and might have trouble finding out even if we wanted to)?

For my part, the Freakonomics podcast certainly made me think twice about buying flowers for my mother this year. Yes, I probably still will, because I'm in Virginia and she's in Massachusetts and what the hell else am I going to do, but there has to be a better way... right?

[Freakonomics]

Quote of the Week

For this week's Quote of the Week, I was tempted to pull something from a terrific guest post on Barry Ritholtz's Big Picture blog on the myth of "liquidity" in capital markets, especially as it pertains to high-frequency trading. It's a must-read if you have any interest in financial markets (these days, it's frankly irresponsible not to), and I suggest you take a minute to peruse it--it's short.

But I'm going to turn my attention elsewhere, namely Washington, where the drumbeat of election season is getting louder by the day (which generally means truth is in short supply). You may have noticed that oil and gas prices are on the rise lately (I wonder why?), which of course is threatening to become a pretty big campaign issue. Enter Nancy Pelosi, that brilliant financial mind, with your Quote of the Week.

This week's QUOTE OF THE WEEK

"Wall Street profiteering, not oil shortages, is the cause of the price spike... Unfortunately, Republicans have chosen to protect the interests of Wall Street speculators and oil companies instead of the interests of working Americans by obstructing the agencies with the responsibility of enforcing consumer protection laws."
                          - House Minority Leader Nancy Pelosi

Sigh... here we are again, blaming those faceless "speculators" for ruining the economy. You see, the problem with this whole line of reasoning is that we only vilify so-called "speculators" (they're usually hedge funds, but since the biggest funds are trading with primarily pension fund money, it's really your pension fund doing the speculating... but that's a discussion for another day) when they cause markets to move in ways that we find inconvenient.

Nobody's blaming "speculators" for doubling the price of the S&P 500 in two years, because we generally like that outcome. But when those same investors (I refuse to actually call them "speculators", because it's just so intellectually dishonest) put their money into commodities like oil, corn, sugar, and wheat, it's suddenly a huge economic problem that requires swift action.

The problem is, it's Fed policies that caused all of this--pension funds need to consistently meet overly rosy annual return assumptions in order to remain solvent, and when you drive interest rates low enough, they therefore need to pile into any and every other asset class in order to attempt to meet those assumptions. Sometimes they pile into equities, which our economic central planners love. Other times, they pile into commodities, which those same planners vilify. BUT THEY'RE THE SAME PEOPLE.

When you choose to inflate the money supply as a way to "stimulate the economy" (read: bail out reckless fiscal policy), you will inflate all asset prices. Ultimately, you can't pick and choose which assets appreciate and which don't, and it becomes a bit of a zero-sum game economically speaking. This is why I've spent so many words here railing against Fed policy, but government hacks like Pelosi still don't get it and choose instead to fall back on stale campaign rhetoric. This is gonna be a long and frustrating year for me, isn't it?

[The Hill]

Communism has been proposed

Sigh... alright, I gave a teaser this morning about a potential rant, and I don't want to disappoint. I won't go on for too long about this, in part because I really hope some of my rant is self-explanatory (and redundant with previous rants on other topics), and also because the bill in question doesn't have a prayer of actually passing. But here goes:

Six House Democrats, led by Rep. Dennis Kucinich (D-Ohio), want to set up a “Reasonable Profits Board” to control gas profits. 

The Democrats, worried about higher gas prices, want to set up a board that would apply a “windfall profit tax” as high as 100 percent on the sale of oil and gas, according to their legislation. 

…The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and gas that ranges from 50 percent to 100 percent on all surplus earnings exceeding “a reasonable profit.” It would set up a Reasonable Profits Board made up of three presidential nominees that will serve three-year terms.

Reasonable profits? Excessive compensation? Mandatory free bag checking? What the hell is going on? When did our federal government, the most fiscally irresponsible group of politicians ever to have graced this fine nation, suddenly become the arbiters of all that is right and proper in the world of business?

There is nothing more ridiculous or counter-productive than these pseudo-communist government policies whose sole purpose seems to be to mitigate the negative impact of other government policies (believe me, oil and gas companies wouldn't have these kinds of profits--nor would banks and health care companies, for that matter--if it wasn't for persistently inflationary Fed policy that drives up the prices of the things we use the most).

But what bothers me the most is that these policies wouldn't even be effective in the first place. American companies and their executives are incredibly creative and resourceful (normally, this is considered to be a good thing), and it's not exactly difficult for them to show a nominal profit of zero in order to avoid paying a usurious tax. As a matter of fact, they're already doing it in large numbers, and it's costing our government a boatload of money.

Pretending that our gas companies couldn't find a way to avoid paying this tax (say, by paying their top executives ridiculously high salaries) is just indicative of how little our politicians actually understand about business and incentives. Sigh. Whatever. Good work, Rep. Kucinich. You're a true American hero.

[Marginal Revolution]

When innovation doesn't lead to progress

MIT News has a pretty fascinating article up this week that gives a slightly surprising answer to the question of why average automobile fuel efficiency has not improved in recent decades, despite near-constant efforts to solve the fuel efficiency puzzle. Let's let them tell the story (emphasis mine).

Contrary to common perception, the major automakers have produced large increases in fuel efficiency through better technology in recent decades. There’s just one catch: All those advances have barely increased the mileage per gallon that autos actually achieve on the road. 

Sound perplexing? This situation is the result of a trend newly quantified by MIT economist Christopher Knittel: Because automobiles are bigger and more powerful than they were three decades ago, major innovations in fuel efficiency have only produced minor gains in gas mileage. 

Specifically, between 1980 and 2006, the average gas mileage of vehicles sold in the United States increased by slightly more than 15 percent — a relatively modest improvement. But during that time, Knittel has found, the average curb weight of those vehicles increased 26 percent, while their horsepower rose 107 percent. All factors being equal, fuel economy actually increased by 60 percent between 1980 and 2006, as Knittel shows in a new research paper, “Automobiles on Steroids,” just published in the American Economic Review.

The puzzle basically boils down to an earn-more, spend-more cycle, where we continually fritter away the gains that technology has given us. Simply put, the technology of 20 years ago simply could not have produced a heavy, powerful SUV with any sort of fuel efficiency whatsoever. Now that it's feasible, we want it, and consumers want the power and size more than we care about the added fuel economy. As a result, overall fuel economy stays pretty much constant, while the cars we drive change drastically.

This is a pretty difficult problem to solve, and not just in the arena of automobile manufacturing. When we as a nation earn more money or become generally more productive, we rarely redirect our newfound earnings (or time) into productive avenues--instead, we fritter it away on conspicuous consumption or myriad time-wasting activities. If we ask ourselves why, the answer is invariably hidden among many layers of complex and bizarre human psychology, often augmented or reinforced by a herd mentality. Yes, I'm rambling.

Ultimately, though, this is just another obstacle to technological progress, the first of which--our societal aversion to change--I mentioned in this post several months ago. Having good ideas available is a necessary condition, but not sufficient. To move forward as a society, we must be willing and able to truly embrace the new possibilities that have been opened up for us--and not to fritter those possibilities away mindlessly. In the case of fuel efficiency, it seems, we've been our own worst enemy. That's too bad.

[MIT News]

Geography and the economy

It's probably not exactly Earth-shattering to suggest that geography goes a long way toward determining economic prosperity--in fact, the "geography is destiny" theory is a leading candidate to explain why the United States enjoyed such an extended era of economic growth in the 19th and 20th centuries (well, there's also those who point to the contributions of slave labor, but that's a conversation for a different day).

Nevertheless, it's interesting to see the concept displayed so clearly on a map, as was done by a trio of economists who pioneered the concept of "GDP Density"--simply put, a measure of the intensity of economic activity in a given spot (h/t Econbrowser).

Landlocked and tropical nations seem to be at a very clear disadvantage as far as economic production is concerned (the same also goes for particularly cold regions--sorry Canada), with any number of suggested explanations (ease of transportation and prevalence of disease are the leading candidates). As is pointed out over at Econbrowser, this map bears striking similarities to satellite pictures of the Earth at night (clearly, there's some correlation between lights and economic activity--I know, it's shocking).

I think these sorts of maps are interesting, and that they cast doubt on the importance that we all like to place on systems and institutions. Is America great because of its democracy, its capitalism, its banking infrastructure (ha!), its education systems, or its innate work ethic? Or was America just lucky, its success due to a fluky accident of geographic history?

It's certainly a question worth wondering when you consider just how much of our economic prosperity (and, of course, or foreign policy) today is determined by the one product that we just don't have enough of here at home--oil. Geography may not completely determine our destiny, but it certainly plays a starring role.

[Econbrowser]

Michele Bachmann is an idiot

To some of you, the headline of this post is obvious; to others, it's probably inflammatory. But it's not a statement of political ideology, it's a statement of fact. Because Michele Bachmann's latest political stunt is at best indicative of a poor understanding of global markets, at worst flagrantly and disarmingly misleading (which, incidentally, would probably make her a perfect President based on recent standards, but I digress). Either way, it's idiotic.

President Michele Bachmann has a promise: $2 gas.

"Under President Bachmann you will see gasoline come down below $2 a gallon again," Bachmann told a crowd Tuesday in South Carolina. "That will happen."...

It's certainly true that prices -- now about $3.50 a gallon on average -- have risen since President Obama took office.

"The day that the president became president gasoline was $1.79 a gallon," Bachmann said.

"Look what it is today."

Oh, for crying out loud...

The CNN article does go on to provide a counter-point to Bachmann, and it's a good thing--for those of you who have read me for a while, you'll know that this is ground that I've already covered once before. Have gas prices soared since President Obama took office in January 2009? Yes, they certainly have. But so too have stock prices, bond prices, corn prices, gold prices, and frankly prices of just about anything that happens to be denominated in dollars. But Bachmann doesn't want to tell you all of that--it would lessen the value of her sound bite.

The rising prices everywhere are indicative of loose monetary policy--something that the President has almost no control over--and an economic recovery (albeit a very weak one) that has brought prices of all goods back up from recessionary lows. You can't blame Obama for high gas prices unless you also credit him for rising stock prices (okay, not lately, but I digress), and I don't see folks lining up on the campaign trail to do that.

The fact is, Bachmann should be careful what she wishes for. Barring a sudden unforeseen shift in dollar policy, OPEC behavior, or consumer preferences for energy-efficient vehicles (all of which would be out of any President's direct control), the only thing that could bring us back to $2 gas is a dramatic collapse in global demand, say due to a(nother) economic recession. If gas gets back down to 2 bucks, it likely means that nobody can afford to buy gas any more at any price, and that they're selling their cars for scrap metal at the junkyard because they don't have jobs or money.

Michele Bachmann, you are a bold-faced liar. I'll never vote for you in a million years, and that's only in part because I think you're batshit nuts and that you probably hoard cats in your basement. I hope Ron Paul (more on him later) tears you a new one during campaign season--it shouldn't be hard.

[CNNMoney]
(h/t The Red Cowboy)

Gas taxes and you

I'm always drawn to infographics like these, so I couldn't help but share this one with you. It shows how much residents of each U.S. state pay, in average, in gasoline taxes (this is of course different, though closely related, to how much they actually pay at the pump).

As usual, I'm fairly pleased with my home state's performance, with Virginia checking in with the 13th-lowest average gas tax in the country (no, it's not quite as good as nearby South Carolina, but let's not talk about that state right now, okay?).

Of course, any time I see a map like this, especially when it's concerning taxes and tax policy, I can't help but take a look at the political angle. So, let's do that. It would stand to reason that the states that tend to vote Republican would also tend to push their state governments for lower taxes, and therefore pay lower taxes. Is it the case?

The evidence isn't necessarily overwhelming, but it's pretty irrefutable. The 14 states with the highest tax rates (and 17 of the top 19) voted Democrat in the most recent (2008) Presidential election. On average, the 28 states that voted Democrat pay 50.8 cents per gallon in tax, as compared to an even 40 cents in Republican-voting states--a 27% premium in the Democratic states.

Fun times. I like it when the intuition is borne out by the statistics.

[The Big Picture]

More bad journalism (and bad science)

Earlier this week, I wrote (okay, ranted) about how brutally skewed and factually inaccurate much of the media rhetoric surrounding the Wisconsin teachers' union situation has been and continues to be (side note: yesterday's Republican maneuver was definitely a somewhat dirty manipulation of the political process, but so too was the Democrats' decision to flee the state--this is what happens when politicians negotiate in bad faith and try to exploit legal technicalities...it's bad news for all concerned).

In that post, I took a few shots at my old favorite punching bag on the left, Paul Krugman. Now, if I spent all of my time on this blog talking about bad journalism from politically-skewed publications and writers, I'd never write about anything else. But when bad journalism and bad science come together, I can't help myself. So, in the name of promoting good science (and also political neutrality), I'm going to balance out my Krugman rant with a similar diatribe against the "Bible of the right", the Weekly Standard. In a blog post that was teased on the Drudge Report, Mark Hemingway wrote:

Ah, January of 2009. Hope was in the air, but more importantly, gas was under two dollars a gallon. Since then gas prices, have gone up 67 percent and it's an ominously upward trend. Interestingly enough, the Heritage Foundation also took a look at the first 26 months of Bush's presidency -- gas only rose 7 percent during that time frame.

Okay, that's true--technically speaking. But it's also horribly misleading. I certainly don't think that President Obama's energy policy is particularly sustainable or comprehensive, but to pillory him for rising gas prices without providing a lick of context is--you guessed it--bad science.

Setting aside the vague "Figures are adjusted for inflation" note that makes the chart difficult to adequately decipher, the movements of gas prices are, in and of themselves, not particularly useful information. The fact that gas prices rose "only 7 percent" during the first two years of the Bush presidency is reflective of the fact that he took over a booming economy, only to see it crater over the next two years in the wake of 9/11.

When the economy is in the doldrums, the gas price tends to be low...like it was in January of 2009, when Obama took office. Whether or not you believe in the sustainability of the economic recovery that has taken place over the last two years (oh yeah, Happy Anniversary, market bottom), the fact is that prices in nearly all markets have skyrocketed--in large part resulting from Fed policy, over which Obama has no direct control.

If you add another piece of information to this puzzle--namely, the price of the S&P 500 index over the same two time frames--a decidedly different picture emerges. To wit:

As you can see, Bush's 7% rise in gas prices was accompanied by a dramatic 37% drop in the stock market, whereas Obama's 67% rise in gas prices was matched by a 55% stock rally. Sure, gas prices were under two dollars a gallon in January 2009, but so was Ford's stock price ($1.80 then, over $14 now).

With that added piece of information, you could in fact even make the argument that Bush's rising gas price despite a falling market was reflective of WORSE energy policy than Obama's "rising prices everywhere" phenomenon--the relative outperformance of gas prices versus stock prices was much more dramatic under Bush. But by omitting this crucially important piece of information, Mr. Hemingway has made the same "mistake" that Paul Krugman made in his Texas-Wisconsin education comparison, thereby making any fair analysis impossible (unless you've got a fact-checker at the ready).

I often hear people parrot Mark Twain's old line that there are three types of lies: lies, damned lies, and statistics. I disagree. Statistics don't lie--only terribly biased journalists who improperly use them to prove a point do. Krugman and Hemingway, you're both damned liars, and you know it. Stop trying to mislead the public.

[Weekly Standard]
[Google Finance]

The fuel economy puzzle

After yesterday's post about incentivizing gym-goers, a friend and reader tipped me off to this TED video (you know how much I love those) featuring Harvard professor Sendhil Mullainathan, the behavioral economist whose teachings were the inspiration for the gym incentive program. In the video (which is worth watching if you've got time), the professor raised an interesting paradox that had me scratching my head all night because it just seemed so wrong.

The puzzle involves fuel efficiency, and it's particularly pertinent to me at the moment since my wife and I are currently in the market for a new car. To paraphrase the professor...

Consider two car-buying customers. Customer A, a conscientious environmentalist, walks into a Toyota dealership prepared to buy a Toyota Yaris, with a fuel economy estimated at 35 miles per gallon. At the last minute, Customer A changes his mind and decides to go with the more fuel-efficient choice, the Prius, improving his fuel economy to a fantastic 50 miles per gallon.

Customer B, on the other hand, walks into a Hummer dealership (yeah, I know, Hummer's been discontinued, but stay with me here), prepared to buy himself a brand new fully-loaded Hummer with its gas-guzzling 9 miles per gallon fuel "efficiency". Like Customer A, he makes a last-second switch, passing up the Hummer's turbo engine for its more fuel-efficient cousin, thereby improving his Hummer's fuel economy to 11 miles per gallon.

So, with their respective last-minute decisions, which customer has done more to save fuel and end our nation's dependence on foreign oil? Our hippie friend, with his increase from 35 to 50 MPG, or our lead-footed Hummer-driving clod, with his measly increase from 9 to 11 MPG?

The counter-intuitive answer (which you probably already know, otherwise I wouldn't have brought it up), is our gas-guzzling, booze-swilling, chest-thumping friend, Customer B.

Don't believe me? I initially didn't believe it myself, either--after all, even in percent terms, Customer A has clearly made a bigger improvement, increasing his fuel economy by 43% as opposed to Customer B's 22%. But let's walk through this.

Assume both customers exhibit average driving tendencies, and drive 12,000 miles in a year. For Customer A, the Yaris would require about 343 gallons of gas over the course of the year. With the Prius, that number decreases to 240 gallons, a savings of 103 gallons. Customer B, on the other hand, with his 9 MPG Hummer, would require a staggering 1,333 gallons of gas in a year. His switch to the 11 MPG option reduces that number to 1,091 gallons, a savings of 242 gallons (enough to fuel Customer A's new Prius for the whole year).

Clearly we'd like everyone to be like Customer A and buy a fuel-efficient car, but in isolation, Customer B has done more in a split second to reduce our nation's fuel requirements than Customer A ever could. The problem, ultimately, is one of metrics--that is to say, we're looking at the wrong metric to make our decision. More specifically, we're looking at the reciprocal of the right metric.

To gauge true fuel efficiency, the more important metric is not the generally accepted miles per gallon (MPG), but actually gallons per mile (GPM), which measures how much fuel we'll actually require to drive our necessary mileage. When we consider that metric, we see that Customer A has improved his GPM from .029 to .02 (a decrease of .009), while Customer B has improved his GPM from .111 to .091 (a decrease of .02, more than double Customer A's improvement). Looking at the right metric enables us to view the problem correctly, whereas the answer to the puzzle was counter-intuitive using our usual measures--our metrics misled us.

I threw together the chart above to show the problem visually. From that graph, you can see clearly that improving fuel efficiency exhibits diminishing returns--that is to say, the improvement from 9 to 11 MPG counts more than the improvement from 11 to 13 MPG, and so forth. By the time we've gotten down to the tail end of the curve where our friend Customer A lives, there's really not much he can do to improve his impact--he's already gotten the easy gains.

This kind of a problem can have significant implications for public policy (and for our personal decisions). Those who already agonize over fuel economy aren't the problem--assuming they are driving cars above 20-25 MPG already, there's little they can do to help. Even a doubling of their MPG would only save a tiny bit.

What we need to do is get the people who aren't currently worried about fuel efficiency to recognize that small changes by them can indeed make a big difference. Nobody else is capable of doing the heavy lifting that they are, as the chart shows. Therefore, if we were to introduce a minimum allowable MPG of 11 or 12 for all vehicles (which should be a reasonable goal), we could do much more good from a fuel efficiency standpoint than introducing a Chevy Volt or a Nissan Leaf or a 100 MPG super-Prius could ever do. It's a vexing problem, but an interesting one to chew on.

[TED]
(h/t reader Emily)

FIFA says "f*** you" to the world

In the annals of terrible (and terribly selfish) decisions, the ever-corrupt FIFA delegation created a new category for itself today by awarding the 2022 World Cup to Qatar, a country with little soccer history, limited existing infrastructure, oppressive weather conditions, an incredibly small population, but very deep pockets. The United States, which welcomed record crowds when it hosted the 1994 World Cup, was the initial favorite but lost in the final round of voting.

Qatar, the smallest nation to host the World Cup, used its 30-minute presentation to underline how the tournament could unify a region ravaged by conflict. Presenters also promised to overcome summer heat of up to 130 degrees by air conditioning outdoor stadiums it will build, then dismantle and give to needy nations.

Really? That's your closing argument? Yikes. With so little going for it except money, there's simply no other conclusion to draw than that FIFA (like the voters in the delegation) was overwhelmed by Qatar's oil-lined bank accounts.

Former French star Zinedine Zidane (he of the infamous head-butt) will reportedly pocket $15 million for himself as a result of the Qatar win, after having appeared in a series of advertisements promoting the nation's bid. Given that, it's definitely not much of a reach to wonder if (or assume that) other pockets were lined during the bidding and voting process.

Qatar's soccer team itself has never qualified for the World Cup, and the nation has zero stadiums that are currently World Cup-ready (in contrast to the United States, which has dozens). Qatar has plans to build between 7 and 9 stadiums (reports vary) specifically for the Cup, many of which will be dismantled immediately afterward.

The nation made its innovative plans to air-condition the stadiums with solar technology a centerpiece of its bid, but its history must cast some doubt on its ability or willingness to actually see that plan through. Qatar is first in the world by a long shot in CO-2 emissions per capita--blowing away every other nation--at a rate nearly triple that of the United States.

By rewarding a nation with such an abysmally dubious distinction as that--and one which profits handsomely from the rest of the world's oil addiction--FIFA has sent a troubling message to the world. At a time when the whole world should be asking itself tough questions about its energy usage and what it means for our future (and I'm not just talking global warming, I'm talking about the question of what types of rogue governments we support with our inability to kick the oil habit), FIFA is instead cheerleading for one of the greatest benificiaries of our gluttonous oil consumption.

Is FIFA alone responsible for setting the precedent that the rest of the world should follow? Certainly not. But as the guardian of the world's most popular sport, it has political reach and clout that few organizations can claim, and today it showed that it has no interest in using that bully pulpit to bring social good. Today's vote isn't about promoting the global growth of soccer or of giving poor Middle Eastern kids a chance to enjoy the world's greatest game (to paraphrase Zidane). Those arguments are smokescreens, and weak ones at that. Today's decision was about money, pure and simple, and about utter indifference with regard to that money's source. Score one for big oil. Thanks, FIFA.


[ESPN]