On the Blog

Jimmy Kimmel Ridicules Obamacare

Somewhat Reasonable - January 17, 2014, 10:01 PM

ABC’s Jimmy Kimmel slammed Obamacare on Tuesday night, ridiculing the Obama administrations expectation that young people would buy health insurance.

The whole segment, including Kimmel’s commentary, is worth watching in the player above. I particularly liked the Obamacare “commercials” which start at the 1:12 mark.

Categories: On the Blog

Bean Bag Justice?

Somewhat Reasonable - January 17, 2014, 2:10 AM

Like the Chicago Tribune, we too were surprised to see Ty “Beanie Baby” Warner, who pleaded guilty last fall to evading taxes on part of his income, receive from U. S. District Court Judge Charles Kocoras a sentence of only two years probation and 500 hours of community service. Unlike the Tribune, we are merely surprised, but not outraged.

In brief, the facts are that Warner, who created the phenomenally successful “Beanie Baby” collectible toy craze in the 1990s, sought to avoid sharing with the federal government some of his resulting phenomenal income by stashing some of his money in overseas accounts with UBS, which once stood for “Union Bank of Switzerland.” (Today the company’s successor is a Swiss global financial services company that provides investment banking, asset management, and wealth management services and has a large U.S. presence, including its own modern office tower on Chicago’s Wacker Drive, across the street from The Heartland Institute’s office building.) In this, he was like most income-earning Americans, who would prefer to keep as much as possible of their hard-earned income for themselves and their families.

Tax evasion is of course illegal, but tax avoidance is not. Indeed, the Internal Revenue Code encourages many Americans to reduce the share of income they fork over to the feds by allowing deductions for mortgage interest and charitable contributions, credits for raising and adopting children, and — under Obamacare — even avoiding a tax penalty by buying health insurance if they don’t already have it.

After striking it rich with “Beanie Babies,” Ty Warner, unmarried and childless, did many of these things of his own accord, giving millions to charity and even paying medical expenses for other people as part of his contribution to the community, all in addition to paying over one billion dollars in personal income taxes over the past twenty years.

Never mind that at its current rate of speed, the federal government would blow through a billion dollars in four to six hours. That’s still a helluva contribution to the general welfare, not to mention all the joy that Warner’s “Beanie Babies” — despite their sometimes fawning simplicity and overbearing cuteness (they were not my cup of tea) — brought to millions of children and grandmothers worldwide during Warner’s twenty-year reign as the undisputed king of kitsch.

In contrast, the huge financial tax avoidance industry that the Internal Revenue Code’s length, breadth, and complexity have spawned imposes a huge deadweight loss on the economy. (Former Chairman of Council of Economic Advisers Martin Feldstein, for example, calculated in 1995 that eliminating just the 1993 rate increase for high income earners would have reduced this deadweight loss by $24 billion while actually increasing tax revenue.)

Unfortunately, the government, like the Tribune, doesn’t see things this way. So Warner, a 69-year old bachelor with a troubled childhood and apparent emotional issues, found himself on the wrong end of a criminal prosecution for tax evasion. After unsuccessfully trying to join a tax amnesty program in 2009, Warner entered a guilty plea in September 2013 and sought to give his mea culpas at that time. Judge Charles Kocoras told an obviously remorseful Warner to save it for the sentencing hearing, and Warner did so with spectacular success: instead of a possible five-year prison term, he was sentenced to two years’ probation plus 500 hours of community service. (In the meantime, Warner had agreed to pay a $53.6 million civil penalty and $16 million in back taxes.)

Among President Obama’s more revealing off-the-cuff comments of the past few years is his expressed view that “I do think, at a certain point, you’ve made enough money.” Agree or disagree with the sentence that Judge Charles Kocoras handed down to Ty Warner, it is perhaps one small sign that sooner or later, you may also have paid enough in taxes.

Just don’t forget to file and pay yours come April 15!

Categories: On the Blog

LBJ’s ‘Great Society’ Programs Are at the Core of America’s Poverty Crisis

Somewhat Reasonable - January 17, 2014, 12:13 AM

January 8, 1964 marked a half century since President Lyndon B. Johnson presented his State of the Union Annual Message to Congress in which he outlined his “Great Society” program (a $20 trillion taxpayer-funded war on poverty) with its astounding number of proposals to enrich the life of man for the purpose of creating a world that is meant for all men to ultimately have.

Listed under “Opportunity for All” in Johnson’s annual message to Congress was the following statement:

… we must open opportunity to all our people. Most Americans enjoy a good life. But far too many are still trapped in poverty and idleness and fear. Let a just nation throw open to them the city of promise:

… to the poor and the unfortunate, through doubling the war against poverty this year.

A year later Daniel Patrick Moynihan, as Assistant Secretary of Labor during the first part of the Johnson administration, devoted all his time trying to formulate national policy for what would become the “War on Poverty” —  the unofficial name for Johnson’s Great Society program.

During Moynihan’s  address at the Urban Institute in 1966 — in his report titled, “The Negro Family:  The Case for National Action” — Moynihan reeled off the dire statistics about the plight of the African American families. Among the concerns Moynihan touted in 1966:

About a quarter of Negro families are headed by women. The divorce rate is about two-and-a-half times what it is [compared with whites], the number of fatherless children keeps growing. And all these things keep getting worse, not better, over recent years. 

By the 1990′s much reflection was being done over Johnson’s Great Society programs of the 1960s. What had happened? It is not surprising that different conclusions were reached at the time about how effective Johnson’s War on Poverty had been.

Michael Fumento expressed this concern in his June 19, 1992 article in Investor’s Business Daily titled “Is the Great Society to Blame? If Not, Why Have Problems Worsened Since the ’60s.” Fumento expressed then a concern that has become even more troubling in today’s atmosphere in the Obama administration.

Some may say, ‘Who cares?’ Let’s stop laying blame and start implementing solutions.” Yet, if government is to be part of the solution, some wonder if it isn’t necessary to first ask if it hasn’t been part of the problem.

On the blame side, George H. W. Bush administration spokesman Marlin Fitzwater blamed the Great Society programs for ignoring “the relationship between people’s pride in their community and having a job.”

President George H. W. Bush noted how what was intended to be a “compassionate safety net” not only consumed $3 trillion in 25 years, but also trapped many in an endless cycle of poverty that didn’t reward individual initiative. The other side predictably argued that the programs were never given a chance to work — though, in fact, they never worked in the first place.

Fumento’s 1992 article has statistics that are in keeping with Moynihan’s expressed reason for the poverty he observed in 1966 in relation to the single-parent family:

In 1980, there were 6.2 million families headed by single women, making up 19.4% of all families with children. By 1990, that number had risen to 84 million families, or 24.2% of the total. Blacks were hit especially hard. . . .

At the beginning of World War II, the illegitimate birth rate among black Americans was slightly less than 19%. Beginning in the late 1960s the trend rapidly accelerated, reaching 49% in 1975 and 65% in 1989.

Empirical studies back in the ’90s, as they do today, have borne out the theory that welfare checks are behind much of the disintegration of the family. Statistics from the ’90s:

  • The University of Washington showed that an increase of roughly $200 a month in welfare benefits per family correlated with a 150% increase in the illegitimate birth rate among teens.
  • David Elwood of Harvard University found that of the 3.8 million families currently on AFDC (Aid to Families with Dependent Children), well over half will remain dependent or more than 10 years, many others for 15 years or longer.

Now it is 2014, fifty years after President Johnson’s 1964, State of the Union address at which he announced an ambitious government undertaking to eradicate poverty, and is this nation any closer to winning the War on Poverty?

This concern remained important enough for President Obama to highlight it in his February 19, 2013, State of the Union Address.

We got single moms out here. They’re heroic what they’re doing. We’re so proud of them. But at the same time, I wish I’d had a father who was around and involved.

According to Robert Rector, a specialist on welfare and poverty at The Heritage Foundation, the war on poverty has been a failure when measured by the overall amount of money spent ($20.7 trillion) and how poverty rates haven’t changed significantly since Johnson gave his address back in 1964. Not withstanding, during the Obama administration the poverty level has reached a 50-year high. Rector went on the say that President Obama’s anti-poverty effort “are basically to give more people more free stuff.” That’s exactly the opposite of Johnson’s goal which was “to make people prosperous and self-sufficient.”

According to Rector, too many government anti-poverty programs still discourage marriage. Statistics show how more than four in 10 children are born to unmarried parents. When the war on poverty started, about 6 percent of children were born outside of marriage.

As benefits swelled, welfare came to serve as a substitute for a breadwinner husband at home through the marginalization of the men who had heretofore headed those families. It is inconceivable today that a record 47 million Americans receive food stamps. That is about 13 million more than when Obama took office.

In commemoration of the 50 years and the $20 trillion spent since President Johnson used his State of the Union address in 1964, to declare his unconditional War on Poverty in America, the Wall Street Journal on January 7 published an opinion piece by Robert Rector: “How the War on Poverty Was Lost.”

What an unmitigated disaster. We never learn, no matter how bad the outcome. What do we do?  We double down and believe more welfare will be better.

About all we have accomplished in the last 50 years of this lost cause is to spend $20 trillion (that is with a t, and a very large sum of money); destroy the nuclear family idea (most tragically, blacks suffered most); moved out-of-wedlock birth from around 6% to over 41% (again mostly imposed on the African American community); destroyed any semblance of work ethic among those in poverty; and created a welfare society no economy can afford or sustain.

Imagine if just half of the $20 trillion was devoted to investment in infrastructure, or left in the hands of the private sector. How robust our economy would be? Imagine how strong this country would be if we had a public education system that functioned as it should — to actually educate our children — how strong this country and economy would be.

Based on the weight of many Americans — and in particular, those classified at the poverty levels — we have at least ended hunger.

Categories: On the Blog

Why Economic Growth Is Exponentially More Important Than Income Inequality

Somewhat Reasonable - January 16, 2014, 6:36 AM

In 1900, we had no airplanes, no computers, no cellphones, no internet. We had only rudimentary versions of cars, trucks, telephones, even cameras.

But in the last century, 1900 to 2000, as Stephen Moore and Julian L. Simon report in their underappreciated work, It’s Getting Better All the Time: 100 Greatest Trends of the Last 100 Years, real per capita GDP in the U.S. grew by nearly 7 times, meaning the American standard of living grew by that much as well. The authors explain:

It is hard for us to imagine, for example, that in 1900 less than one in five homes had running water, flush toilets, a vacuum cleaner, or gas or electric heat. As of 1950 fewer than 20 percent of homes had air conditioning, a dishwasher, or a microwave oven. Today between 80 and 100 percent of American homes have all of these modern conveniences.

Indeed, in 1900 only 2% of homes enjoyed electricity.

Michael W. Cox and Richard Alm add in their insightful Myths of Rich and Poor that as a result of all that economic growth today:

Homes aren’t just larger. They’re also much more likely to be equipped with central air conditioning, decks and patios, swimming pools, hot tubs, ceiling fans, and built in kitchen appliances. Fewer than half of the homes built in 1970 had two or more bathrooms; by 1997, 9 out of 10 did.

Such economic growth has produced dramatic improvements in personal health as well. Throughout most of human history, a typical lifespan was 25 to 30 years, as Moore and Simon report. But “from the mid-18th century to today, life spans in the advanced countries jumped from less than 30 years to about 75 years.” Average life expectancy in the U.S. has grown by more than 50% since 1900. Infant mortality declined from 1 in 10 back then to 1 in 150 today. Children under 15 are at least 10 times less likely to die, as one in four did during the 19th century, with their death rate reduced by 95%. The maternal death rate from pregnancy and childbirth was also 100 times greater back then than today.

Moore and Simon further recount, “Just three infectious diseases – tuberculosis, pneumonia, and diarrhea – accounted for almost half of all deaths in 1900.” Today, we have virtually eliminated or drastically reduced these and other scourges of infectious disease that have killed or crippled billions throughout human history, such as typhoid fever, cholera, typhus, plague, smallpox, diphtheria, polio, influenza, bronchitis, whooping cough, malaria, and others. Besides the advances in the development and application of modern health sciences, this has resulted from the drastic reduction in filthy and unsanitary living conditions that economic growth has made possible as well. More recently, great progress is being made against heart disease and cancer.

Also greatly contributing to the well-being of working people, the middle class, and the poor in America has been the dramatically declining cost of food resulting from economic growth and soaring productivity in agriculture. As Moore and Simon report, “Americans devoted almost 50 percent of their incomes to putting food on the table in the early 1900s compared with 10 percent in the late 1900s.”

While most of human history has involved a struggle against starvation, today in America the battle is against obesity, even more so among the poor. Moore and Simon quote Robert Rector of the Heritage Foundation, “The average consumption of protein, minerals, and vitamins is virtually the same for poor and middle income children, and in most cases is well above recommended norms for all children. Most poor children today are in fact overnourished.” That cited data comes from the U.S. Census Bureau. As a result, poor children in America today “grow up to be about 1 inch taller and 10 pounds heavier than the GIs who stormed the beaches of Normandy in World War II.”

That has resulted from a U.S. agricultural sector that required 75% of all American workers in 1800, 40% in 1900, and just 2.5% today, to “grow more than enough food for the entire nation and then enough to make the United States the world’s breadbasket.” Indeed, today, “The United States feeds three times as many people with one-third as many total farmers on one-third less farmland than in 1900,” in the process producing “almost 25 percent of the world’s food.”

Moreover, it is economic growth that has provided the resources enabling us to dramatically reduce pollution and improve the environment, without trashing our standard of living. Moore and Simon write that at the beginning of the last century,

“Industrial cities typically were enveloped in clouds of black soot and smoke. At this stage of the industrial revolution, factories belched poisons into the air—and this was proudly regarded as a sign of prosperity and progress. Streets were smelly and garbage-filled before the era of modern sewage systems and plumbing.”

Not any of these truly dramatic advances for the poor, working people and the middle class could have been achieved by redistribution from “the rich.” Only economic growth could achieve these results.

Nor would it have been worth sacrificing any of these world shattering gains for greater economic “equality.” And Barack Obama’s leftist protestations to the contrary notwithstanding, economists have long recognized the conflict between economic equality and maximizing economic growth. Put most simply, penalizing investors, successful entrepreneurs, and job creators with higher taxes, to reward the less productive with government handouts, to make everyone more equal, is a sure fire way to get less productivity, fewer jobs, lower wages, and reduced economic growth.

The above history, and the future prospects below, are why to most benefit the poor, working people, and the middle class, our nation’s overriding goal must be to maximize economic growth. Consider, if total real compensation, wages and benefits, grow at just 1% a year, after 20 years the real incomes of working people would be only 22% greater. After 40 years, a generation, real incomes would be 50% more. But with sustained real compensation growth of 2%, after just 20 years the real incomes and living standards of working people would be nearly 50% greater, and after 40 years they would be 120% greater, more than doubled. At sustained 3% growth in wages and benefits, after 20 years the living standards of working people will have almost doubled, and after 40 years they will have more than tripled.

The U.S. economy sustained a real rate of economic growth of 3.3% from 1945 to 1973, and achieved the same 3.3% sustained real growth from 1982 to 2007. (Note that this 3.3% growth rate for the entire economy includes population growth. Real wages and benefits discussed above is a per worker concept). It was only during the stagflation decade of 1973 to 1982, reflecting the same Keynesian economics that President Obama is pursuing today, that real growth fell to only half long term trends. If we could revive and sustain that same 3.3% real growth for 20 years, our total economic production (GDP) would double in that time. After 30 years, our economic output would grow by 2 and two-thirds. After 40 years, our prosperity bounty would grow by 3 and two-thirds.

If we are truly following growth maximizing policies, we could conceivably do even better than we have in the past. At sustained real growth of 4% per year, our economic production would more than double after 20 years. After 30 years, GDP would more than triple. After 40 years, a generation, total U.S. economic output would nearly quadruple. America would by then have leapfrogged another generation ahead of the rest of the world.

Achieving and sustaining such economic growth should be the central focus of national economic policy, for it would solve every problem that plagues and threatens us today. Such booming economic growth would produce surging revenues that would make balancing the budget so much more feasible. Surging GDP would reduce the national debt as a percent of GDP relatively quickly, particularly with balanced budgets not adding any further to the debt. Sustained, rapid economic growth is also the ultimate solution to poverty, as after a couple of decades or so of such growth, the poor would climb to the same living standards as the middle class of today.

With sustained, robust, economic growth, maintaining the most powerful military in the world, and thereby ensuring our nation’s security and national defense, will require a smaller and smaller percentage of GDP over time. That security itself will promote capital investment and economic growth in America. The booming economy will produce new technological marvels that will make our defenses all the more advanced. With the economy rapidly advancing, there will be more than enough funds for education. There will also be more than enough to clean up and maintain a healthy environment.

With such booming growth, imagine where our exploding, rapidly advancing science will take us from 2000 to 2100. In a March, 2012 interview in the Wall Street Journal, pathbreaking, pioneering, futurist physicist Michio Kaku explained, “Every 18 months, computer power doubles, so in eight years, a microchip will cost only a penny. Instead of one chip inside a desk top, we’ll have millions of chips in all of our possessions: furniture, cars, appliances, clothes. Chips will be so ubiquitious that we won’t say the word ‘computer.’” Kaku further projected, “In this ‘augmented reality,’…the Internet will be in your contact lens. You will blink, and you will go online. That will change everything.”

Kaku continued:

To comprehend the world we’re entering, consider another word that will disappear soon: ‘tumor.’ We will have DNA chips inside our toilet, which will sample some of our blood and urine and tell us if we have cancer maybe 10 years before a tumor forms. . . . When you need to see a doctor, you’ll talk to a wall in your home, and an animated artificially intelligent doctor will appear. You’ll scan your body with a hand-held MRI machine, the ‘Robodoc’ will analyze the results, and you’ll receive a diagnosis that is 99% accurate.

On the distant horizon beckons the personalized medicine made possible by the mapping of the human genome, so contrary to the central planning of Obamacare. Modern genetics is rapidly advancing to a redesign of plants and agriculture, the leftist European cant over “frankenfood” to the contrary notwithstanding. While Star Trek style teleporting eludes our science, high definition and 3D video conferencing will provide a similar feel. While Barack Obama thinks modern technology causes unemployment, 3D printing offers new vistas in manufacturing. Robotics has already produced driverless, automated cars, “lights out” factories, and robotic surgery. And that is mostly without advances in artificial intelligence that can expand the effectiveness of the human race to vast new realms.

George Gilder’s transformative book, Power and Knowledge, unrecognized in the current generation’s temporary Dark Age of the West, explains how breakthroughs in information theory are opening new vistas for previously sidetracked frontiers of physics, chemistry, and biology. That is opening the way for currently frustrated visionaries to achieve their dreams: “Peter Thiel wants supersonic flight and real genetic medicine, robotic vehicles, and new libertarian city-states at sea. Ray Kurzweil pushes for a prosthetic life, an upgraded bionic body with veins vamped with nanobots, chasing down viruses and cancers, repairing outworn tissue and extended by virtual worlds of glass and light.”

Kaku concludes, “If you could meet your grandkids as elderly citizens in the year 2100, you would view them as being, basically, Greek gods.”

This is the future that today’s so-called “progressives,” fixated on their literally dumb, static analysis concepts of economic “equality” and “redistribution,” would be denying tomorrow’s otherwise poor, working people, and middle class. Today’s so-called “progressivism” is just the late 19th century reactionary response to the rise of the industrial revolution. It is the surviving nostalgic project to stop history at Karl Marx, and return to the imagined, more bucolic world of the 18th century. This is all best reflected in the environmentalist extremist fraud of global warming/climate change, with Barack Obama’s EPA serving as the spear carriers even now still openly trying to reverse the industrial revolution (even if that is not what they themselves imagine they are doing).

But the future will overwhelm the present, and reject the past. Just as the technological breakthrough of fracking, and the resulting oil and gas boom, is overwhelming today’s EPA. The American people, pursuing the same vision of freedom and prosperity that inspired the first, original, American Revolution, will not be denied the bounty of the future. And ultimately leading that fight for the infinitely prosperous future will ironically be the very same young immigrants that today’s “progressives” think will put them over the top in their reactionary war to restore pre-capitalism.

[First published at Forbes.]

Categories: On the Blog

Chicago Bans Indoor Use of E-Cigarettes, Heartland Institute Responds

Somewhat Reasonable - January 15, 2014, 10:56 PM

The Chicago City Council today banned the use of electronic cigarettes indoors – treating e-cigarettes, which emit harmless water vapor, exactly like tobacco cigarettes, which emit smoke.

The following statements from tobacco policy experts at The Heartland Institute – a Chicago-based free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at jlakely@heartland.org.

“By choosing to lump e-cigarettes into its smoking ban ordinance, Chicago has taken a lazy and shortsighted approach toward regulating what is a very different product than cigarettes. Although most e-cigarettes have nicotine derived from tobacco, they are very different from other tobacco products, and they should not be regulated the same way.

“E-cigarettes have far fewer consequences for personal and public health, and several studies have found e-cigarettes to be an effective and viable option for smokers seeking a nicotine replacement therapy. Adding e-cigarettes to the smoking ban only disrupts an increasingly popular and successful method of helping Chicagoans reduce smoking or quit altogether.”

Matthew Glans
Senior Policy Analyst
The Heartland Institute
mglans@heartland.org

——————————-

“The goal of bans on smoking in public places has always been to reduce exposure to second-hand smoke and to allow people fewer places to smoke, with the hope that it would cause them to quit smoking. Chicago’s proposed ban on e-cigarettes will do no good on either front.

“There’s no smoke from e-cigarettes, so the ban won’t reduce second-hand exposure. If anything it’ll increase it by causing more people to keep smoking cigarettes, rather than quit by switching to e-cigarettes. And by treating the dramatically less-harmful e-cigarettes like cigarettes, fewer people will be likely to make the switch.”

Jeff Stier
Senior Fellow, National Center for Public Policy Research
Policy Advisor, The Heartland Institute
jeffstier@gmail.com
312/377-4000

——————————-

The Heartland Institute is a 30-year-old national nonprofit organization headquartered in Chicago, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.

Categories: On the Blog

A Bridge Too Far: Chris Christie and the Abuse of Power

Somewhat Reasonable - January 15, 2014, 8:41 PM

Without regard to whether it’s as bad as Benghazi or more on the order of Obama closing the National Mall in a fit of pique over not reaching a budget deal with Republicans, New Jersey Governor Chris Christie’s recent embarrassment over his staff fouling up traffic on the George Washington Bridge for four days in September in apparent retaliation against a political opponent is well-deserved.

Whether or not Christie authorized the mischief in question, the action of his aides provides further proof, if any were needed, of the truth of Lord Acton’s famous admonition: Power tends to corrupt, and absolute power corrupts absolutely. In fact, as is often the case, the smaller the stakes, the more petty the politics. Taking their cue from their brusque and combative boss, Christie’s aides obviously let their limited power overwhelm their good judgment, assuming they ever had any.

The arrogant actions of Christie’s aides cost the governor’s constituents unneeded frustration and energy and caused otherwise productive human beings to waste hours of their lives sitting in already stressful traffic conditions. This demonstration of what the late U. S. Senator J. William Fulbright once called “the arrogance of power” tells all we need to know about why more government is bad for us and less government is good: bureaucrats tend to put their own interests ahead of those they are supposed to serve.

To paraphrase Mark Steyn speaking to Hugh Hewitt, if government is good for anything, then it’s supposed to be for stuff like building bridges across rivers to facilitate traffic between states. But shutting down traffic to annoy your political opponents is the stuff of petty tyrants, not a self-governing people.

It was amusing, perhaps, in the late 1970’s to hear Arnold Schwarzenegger as “Conan the Barbarian” recite what is best in life:  “To crush your enemies, [to] see them driven before you, and to hear the lamentation of their women.”  But there’s a reason he’s called a barbarian.

In the modern world, the only legitimate roles for government are to lead, to follow, or to get out of the way of the people.  For four days in September, on the George Washington Bridge, the government of New Jersey showed no apparent interest in any of these things.

Categories: On the Blog

Heartland Institute Experts React to Net Neutrality Ruling by DC Circuit Court

Somewhat Reasonable - January 14, 2014, 5:21 PM

The D.C. Circuit Court today struck down the Federal Communication Commission’s 2010 “net neutrality” rule requiring Internet service providers to treat all traffic across their networks the same – discriminating against none and favoring none. The court also, however, ruled the FCC may impose its net neutrality rule if it reclassifies broadband as a “common carrier” as it does telephone service. (Read the ruling here.)

The following statements from technology policy experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at jlakely@heartland.org.

 

“It is fortunate the Circuit Court did not endorse the FCC’s imposition of net neutrality rules under its ‘general authority.’ That is an improper FCC power grab not delegated to it by Congress via the Communications Act. However, the ruling all but urges the FCC to reclassify broadband under ‘Title II’ as a telecommunications common carrier. Such a designation does not fit the character and purpose of broadband services and would distort the digital marketplace in a way that would discourage innovation and arbitrarily pick winners and losers in the digital economy.

“Government-dictated net neutrality is a heavy-handed solution to a non-existent market failure. Supporters of a vibrant and innovative digital economy dodged a bullet today, but one gets the feeling it won’t be for long.”

Jim Lakely
Co-Director, Center on the Digital Economy
The Heartland Institute
jlakely@heartland.org

 

“While this decision may appear to throw a monkey wrench in the net neutrality regime, in reality it leaves the door open for even more harmful changes. Supporters of a free and open Internet now need to be wary of any proposal that would reclassify the Internet as a public utility and therefore subject to Title II regulation, the burdensome regulatory system that has hindered the growth of the telephone market for decades.”

Matthew Glans
Senior Policy Analyst
The Heartland Institute
mglans@heartland.org

 

“This court delivered an unusual win-win outcome in Verizon v. FCC that enabled each party to win on their respective and different must-win issues: the FCC had its core ‘general authority to regulate’ broadband affirmed, and Verizon avoided ‘common carrier regulation of broadband.’

“Specifically, the Appeals Court handed the FCC a big win in ruling that the FCC does have the ‘general authority to regulate’ broadband and ‘promulgate rules governing broadband providers’ treatment of Internet traffic,’ in order to ‘preserve and facilitate’ the ‘virtuous circle’ of innovation that has driven the explosive growth of the Internet. Specifically, the court also handed Verizon and the broadband industry a big win on its top concern in ruling that the FCC does not have the authority to ‘impose common-carrier-like regulation on broadband providers.’

“If the parties do not appeal – and the FCC also works on new broadband information service traffic-rules-of-the-road that comport with this decision – this effectively could settle into a de facto net neutrality peace given that the FCC’s ‘general authority to regulate’ broadband would be unchallenged and the broadband industry’s biggest fear, common carrier regulation of broadband, would be off the table.

“Finally, this decision also underscores the need to modernize the obsolescent 1934 Communications Aaw for the twenty-first century.”

Scott Cleland
Chairman, NetCompetition
Policy Advisor, Telecommunications
The Heartland Institute
scleland@precursor.com

 

“It’s been a long five years for the Constitution, the rule of law, and the American people. President Obama has time and again imposed his radical agenda via regulatory fiat. The People’s Congress has been with increasing frequency cut entirely out of the governing process.

“Chaos has reigned. The president’s rule-by-whim has created endless uncertainty – which has bred economic stagnation. In the midst of this mess comes a moment of Zen: The D.C. Circuit Court has struck down the administration’s unilateral net neutrality imposition, which was an enormous, uncertainty-inducing, investment-dampening power grab ‘solution’ running around vainly in search of a non-existent problem.

“Let’s hope the administration takes this for the lesson it is – that it cannot create jurisdiction and law out of whole cloth, and that it needs to leave the legislating to the Legislative Branch.”

Seton Motley
President, Less Government
Policy Advisor, Telecom
The Heartland Institute
smotley@lessgovernment.org

 

“It should come as no surprise and much celebration that the D.C. Circuit Court smacked down the Federal Communications Commission’s network neutrality regulations this morning. The agency lacks any authority to draft such overweening rules in the first place – as noted when the FCC’s previous attempt also was shot down by the same court in 2010.

“Continuing to grate, however, is the process former FCC Chairman Julius Genachowski and his fellow Democrats Mignon Clyburn and Michael Copps employed to pass their net neutrality rules – in late December when Washington was a virtual media desert. Several heroic legislative attempts to overturn the rules subsequently failed even as the legal battle ground on. The enormous amount of time and money wasted on trashing this completely unnecessary boondoggle is yet another example of the out-of-control nature of government regulators all too eager to flaunt the rule of law.”

Bruce Edward Walker
Policy Advisor, Telecom
The Heartland Institute
bwalker@heartland.org

Categories: On the Blog

Why Are the Media’s ‘Consumer Interest Groups’ So Leftist and Anti-Consumer?

Somewhat Reasonable - January 14, 2014, 3:52 PM

The Media’s double standard when describing political advocacy organizations is as obvious as it is unsurprising.

The Media rarely if ever identify Leftist entities as Leftist – instead assigning them non-ideological descriptives.  Often, it is the ridiculous “consumer interest group” – as if the anti-free market side of the equation is pro-consumer, and the defenders of freedom are against the purchasing public.

Never mind that no one is more pro-consumer than a private company – after all, they are the ones trying to please as many consumers as possible.  It would then stand to reason that the organizations defending private companies from government overreach are also pro-consumer.

Because these “consumer interest groups” are in fact “government interest groups” - every “solution” they push results in larger, more interfering government.  Which is about as anti-consumer as you can get.

How’s ObamaCare treating consumers?  The Veterans Administration?  The Department of Motor Vehicles?  Would you rather head there – or to Amazon.com or your neighborhood deli?

Meanwhile, the Media almost always identify Conservative groups as conservative – that is, when they mention them at all.  Often, marketplace political stories only quote Leftist groups and company representatives.

Which is itself biased.  It depicts the debate as a struggle between the plucky little “consumer interest” groups (who actually often have very large [George Soros] money behind them) – and the evil Industry Titans.

There are perhaps dozens of conservative/free market groups out there – yet the Media often can’t seem to find room for any of them in their stories.

The latest bit of wireless phone news is a fabulous case study.

 AT&T Dials Up Toll-Free ‘Sponsored Data’

The company on Monday introduced “Sponsored Data,” or data that is paid is for by a business that wouldn’t count against a subscriber’s capped plan. Think a toll free 1-800 number or free shipping for the delivery of data.

Here in Reality, this should be a non-news story – other than the good news for consumers.  They will be getting more data for the same money – which will in a great many instances allow them to actually purchase less data, saving them coin.

This model exists…well, everywhere.  As stated above, companies via 800 numbers pick up the tab for your call.  Many then after you call to place an order pick up the tab to ship it to you.  The examples of this free market paradigm are nearly endless.

AT&T and Verizon Wireless in particular have been aggressive in getting their customers to switch to tiered plans that require people to pay more to get more data.

Again, here in Reality when we use more – we pay more.  You pay more for ten steaks than you do for two.  It costs more to gas up an Escalade than it does an Escort.

So if the companies providing the biggest data-chewing content were to pay for it – it would in fact be a tremendous consumer boon.  Imagine car makers paying for your gasoline – oh wait, some do.  Isn’t Reality great?

But this is the Media and the Left – they don’t reside in Reality.

Consumer advocate group Free Press has already criticized the plan.

There are those magic Media words – “consumer advocate group.”  Never mind that Free Press was co-founded by a self-avowed Marxist - they are “consumer advocates.”  This story quotes Free Press and AT&T only – not a conservative group to be found.

Then there’s this:

AT&T Sponsored Data Plan Threatens Open Internet, Consumer Groups Argue

In which Free Press and their fellow Media Marxist joint Public Knowledge are quoted.  As is AT&T.  And that’s it.

FCC Ready To Step In On AT&T’s Sponsored Data Plan

Like a toddler with a pet dog, AT&T (NYSE:T) has a history of poking the Federal Communications Commission (FCC) until it turns around and barks. And thats just what its done now.

That’s an objective opening paragraph.  Keep in mind that the last time AT&T “poked” the FCC, it was when they wanted to buy T-Mobile.  The Media Marxist chorus screeched their opposition, and the FCC blocked the deal - issuing an error-riddled report in defense of its decision.

But this “news” story ignores all of this.  Instead it portrays AT&T as a serial government instigator.  And pretends the government’s bark is worse than its bite – when it’s chomping huge chunks out of the private sector.

A few months ago, ESPN was also discussing possibly paying for delivery of its digital content.  

Why We’re Praying That ESPN Does Not Begin Subsidizing Wireless Plans

Handout recipients having their cell phones and plans (ObamaPhones) entirely paid for by a fraud-riddled government?  With money the government gets by taxing consumers’ phones?  Outstanding.

Consumers having their cell phone plans “subsidized” – incentivized – by private companies?  Awful.

This “news” story appeared (with apparently unintentional irony) at Consumerist.com.

The Media aren’t reporting on these choice-and-wallet-expanding possibilities – they are choosing the anti-free market side against them.  And providing cover for the government interest “consumer interest” groups lining up likewise.

The Media and the Left together pretend to look out for the Little Guy – all the while making it ever more excruciating for him. 

Seton Motley is the founder and president of Less Government.  Please feel free to follow him on Twitter (@SetonMotley) and Facebook. It’s his kind of stalking.

Categories: On the Blog

Christie’s Crisis

Somewhat Reasonable - January 14, 2014, 3:14 PM

I watched the 107 minute press conference by New Jersey Governor Chris Christie on Thursday, but I must admit that I almost fell asleep towards the end. What struck me at the time was that I had not seen anything comparable from President Obama regarding the many scandals such as Fast and Furious, the IRS targeting of Tea Party and comparable groups, Benghazi, and the Obamacare debacle.

Gov. Christie didn’t just offer a prepared statement, take a few questions, and leave. He stayed on. He took full responsibility for the closing of lanes to the George Washington Bridge by over-zealous staff, announced the firing of two top aides, and promised a further investigation of what occurred and why. Then he answered a barrage of questions.

The focus on the event is the result of countless predictions that he would face Hillary Clinton in the 2016 presidential election.  The Governor has become a celebrity politician as the result of his personality and dramatic reelection in a state that is heavily Democratic. He gained a lot of attention for facing down the powerful teacher’s union and addressing the state’s fiscal problems.

He also gained attention for his “style” of governance. A former U.S. District Attorney for New Jersey, he had put a lot of politicians in jail and, as Governor, often challenged those who questioned those who challenged him and showed his toughness on the issues. “I am not a bully,” he said in the press conference, but his assertive nature was, for many New Jerseyans, part of their support.

Did his staff and appointees absorb some of that “attitude”? Brigid Harrison, a professor of political science and law at Montclair State University (NJ), said, “It is not too much of a logical leap to connect the rhetoric that the governor has used with the tone of public servants in his administration, and I don’t think it’s a stretch to say that the disdain that is evident in these documents comes from the top down.”

Those thousands of documents, however, reveal no connection to the Governor.

Born in New Jersey, grown to maturity, and a resident here, my interest in the Governor stems in part from watching him over the many years he has been a public servant. This is the first time he has faced such a crisis and he took full responsibility. That is quite a contrast with Obama who has never taken responsibility for anything and often stated he was unaware of them until he read about it in the newspaper, something that occurred to Christie when a New Jersey daily revealed the content of emails regarding the lane closures subpoenaed by the state legislature.

I voted for Christie twice, am a registered Republican, and am politically conservative. I never voted for Obama. That doesn’t mean I have been happy with his politics that includes an antipathy toward gun ownership, an inclination to believe the environmental nonsense about global warming or some energy-related issues.

What is occurring, however, is a huge effort by the liberal mainstream press to discredit and eliminate him from being a potential Republican presidential candidate to oppose Hillary Clinton. It is the same press that has done its best to ignore the many Obama scandals and those that compose the history of Hillary, the most recent of which was her failure to respond to the Benghazi scandal when she was Obama’s Secretary of State.  She signed onto the huge lie that the attack was the result of a video nobody ever saw.

The same press thought his close relationship with Obama following the devastation of superstorm Sandy on the New Jersey shore was wonderful. He was trying to get the federal government to respond swiftly to the needs of citizens who had lost their homes or had their businesses ruined. That’s what a Governor is supposed to do. Christie also campaigned for Mitt Romney when he was running for President.

Christie’s politics make a lot of conservatives wary. He appointed a Muslim to the judiciary in New Jersey and he did a John Kerry on same-sex marriage, having been against it until he was for it. During his second campaign his campaign coffers were enriched by more donations from Democrats than Republicans! He failed to assist Ken Cuccinelli when he ran for Governor of Virginia. Et cetera.

Until the lane closing scandal, the mainstream press was touting him heavily. Now they see an opportunity to remove him from those who might challenge Hillary in 2016, assuming she will run. Hillary has so many scandals that political pundits might pause in their predictions. What she represents is four more years of the Obama agenda.

At this writing, there is no way of knowing if Gov. Christie will come out of the bridge lanes closing relatively unscathed or whether it will end his position as a Republican front-runner. The fact is that the GOP has a number of politicians who can replace him in 2016 if that occurs. The Democrats never mention anyone other than Hillary, nor is the impact of Obamacare on the November midterms and the outcome in 2016 ever mentioned. Right now the President is desperately trying to focus attention on the utterly bogus “income inequality” nonsense.

For now, Gov. Christie, a gifted politician, has three more years of overseeing 65,000 state employees and his legislative agenda in New Jersey. For now, the mainstream press will have a field day covering him.

 

Categories: On the Blog

It’s the Consumer, Stupid! – Part II

Somewhat Reasonable - January 14, 2014, 5:20 AM

In thinking about the brouhaha over AT&T’s proposed “sponsored data” plan for its wireless service, I was reminded of a blog I wrote shortly after the oral argument in Verizon’s appeal of the FCC’s net neutrality regulations. With a nod to James Carville, it was titled, “It’s the Consumer, Stupid!”

I explained there that, amidst all the back-and-forth about net neutrality, it is easy to be seduced into focusing on the wrong questions – for example, whether “edge providers” or broadband providers are more adversely impacted by a particular business practice. The most important questions should involve the impact of the business practice on consumers, not the providers.

Well, welcome to “It’s the Consumer, Stupid – Part II” – courtesy of some of the reactions to AT&T’s sponsored data proposal. As you know by now, under AT&T’s proposal, data charges on AT&T wireless service resulting from eligible uses will be billed directly to the sponsoring company, rather than to the AT&T subscriber. Thus, as AT&T claims, the sponsored data plan operates in a fashion similar to the long-familiar 1-800 numbers that allow telephone customers to call toll-free, with the sponsor of the 800 number paying for the call.

First, let me make clear that I understand, and almost no one seriously contends otherwise, that the FCC’s net neutrality regulations, by their terms, do not apply to AT&T’s plan because the prohibitions don’t apply to wireless services. Nevertheless, this fact doesn’t stop some, who almost always reflexively oppose any business practice that can be made to “sound” in net neutrality from suggesting that, in any event, the practice ought not be allowed.

Second, I understand that sometimes it doesn’t matter one whit whether the FCC ‘s existing regulations actually do or do not prohibit a proposed business practice, or whether the FCC actually does or does not possess authority to prohibit the practice. By this I mean that often the objectors’ goal is simply to create enough of a stir – a brouhaha, as we say – so that the company proposing the new service will withdraw the proposal to “reconsider,” “reevaluate,” “recalibrate,” or whatever. It may take only a raised eyebrow or two from FCC officials or members of Congress to lead to such a strategic back-off.

I have seen such back-offs under fire many times in the past, and I’m sure I’ll see more. I often wince when they occur, but I understand the pressures that may be brought to bear.

In this instance, I hope AT&T holds fast for one main reason: Consumers, on the whole, are likely to benefit if AT&T’s plan goes forward. Whether or not the plan benefits AT&T is not my concern, although I assume AT&T anticipates its business will benefit or it wouldn’t propose the new offering. Too often “consumer advocates” adopt the posture that anything that benefits the service provider’s business must be detrimental to the provider’s consumers. In other words, they view the provider-customer relationship through a “zero-sum game” lens. This, of course, is completely wrong.

Let me now address the two principal objections raised in one form or another to AT&T’s proposal.

AT&T’s plan puts it in the business of picking winners and losers on the Internet.

AT&T says its plan is voluntary and non-exclusive, so it is difficult to understand how AT&T is picking any winners and losers. What some of the objectors seem to mean, instead, is that the very existence of the plan means, ipso facto, there will be winners and losers in the sense that some companies may not be able to afford to establish a sponsored data plan. Perhaps they are even the proverbial start-up still in the garage.

Depending on the business model employed by the content or apps provider, the sponsored data plan will be more or less attractive. Some companies certainly may benefit from such a business model more than others. This is the way markets operate. Most importantly, though, consumers benefit from the marketplace competition as companies innovate and invest in new content and applications while seeking a competitive edge.

Even assuming for the sake of argument that AT&T’s plan were exclusive rather than non-exclusive, it still would be wrong to assume AT&T would be in the position of picking winners and losers. This is because the wireless marketplace is competitive, and, therefore, it is in the interest of AT&T and its competitors to carry all the content and applications that consumers find attractive. In other words, AT&T and its competitors all want more usage of their network facilities. If a new start-up content or application provider has a good business plan that includes sponsored data – a proposal for a service likely to attract consumers – it will be able to attract capital to fund participation in AT&T’s plan.

AT&T’s plan could ultimately harm consumers.

This claim has been made by several of the objectors, but, for illustrative purposes, I’ll take the statement issued by Rep. Anna Eshoo, the ranking member of the House Subcommittee on Communications and Technology, whom I respect. According to a report in the Hillicon Valley blog, Rep. Eshoo said:

 On its face, the ability for consumers to access ‘toll-free’ content seems like long-awaited relief from frustrating data caps. But embedded in programs of this type are serious implications for fairness and competition in the mobile marketplace. …And we must ask just how beneficial a program like this is to consumers who could ultimately foot the bill for the added cost of doing business.

I wouldn’t characterize data usage plans (most providers no longer have actual caps on usage, but rather tiered usage pricing plans) as frustrating as opposed to economically sound. But, in any event, a plan that allows consumers to enjoy certain content and applications free from usage caps appears consumer-friendly, and not just “on its face.” Just ask real-world consumers whether or not they prefer having this usage-free option available for some of their favorite heavy-trafficked sites, say, Netflix or ESPN. We know the answer.

But Rep. Eshoo’s suggestion is that, whatever the data-free plan’s acknowledged short-term benefit to consumers, they “could ultimately foot the bill for the added cost of doing business.” Presumably she means to suggest that the content and apps providers, ultimately, might pass on to consumers the fees they pay AT&T to participate in the sponsored data program. Depending on the business model devised by the content and apps providers, they may or may not charge consumers to access their products and services.

But here’s the most fundamental point: There simply is no free lunch. Assuming that the government is not going to take over the private wireless networks, and pay the costs of maintaining and operating them – and I don’t take Rep. Eshoo to be proposing this – it is just an economic fact that, ultimately, private networks, such as AT&T’s, must be paid for one way or another by those who use them, whether by AT&T’s subscribers, or by the content and apps providers who rely on AT&T’s network for reaching their own users, or some combination of these segments.

Under AT&T’s proposal, participating content and apps providers will share some of the costs of operating and expanding AT&T’s wireless network. There is no reason for the government to dictate that the costs for network operation and facilities upgrades shouldn’t be paid for, at least in part, by the content and applications providers that are reliant on the network to reach their customers. It is at least possible, if not likely, that this cost-sharing mechanism will turn out to be, at least for some business models, a more economically efficient way to recover the costs of operating and expanding the service provider’s networks, while expanding customer usage. And, in this context, economically efficient means less costly, on an overall basis, ultimately to the benefit of all consumers that use the network.

Put slightly differently, given the competition in the wireless broadband market – indeed, in the broadband marketplace at large – the costs of the FCC interfering with proposals like AT&T’s are likely to outweigh the benefits. This is because the costs entail curtailing market experimentation that drives innovation in new products and investment in new facilities. And when that happens, especially in a dynamic marketplace, we’re talking real consumer harm.

So, remember, in thinking about these issues: “It’s the Consumer, Stupid!”

[First published at the Free State Foundation blog.]

Categories: On the Blog

Annoying Greenies on the Defense

Somewhat Reasonable - January 13, 2014, 12:41 PM

After decades of controlling America’s energy narrative, on January 5, CBS’s 60 Minutes fired a shot that has put the green lobby on the defensive. The next day, two very different media outlets lobbed blows that could represent a new trend; a change of tone in Washington.

The 60 Minutes piece, featuring correspondent Lesley Stahl, aired, perhaps intentionally, at a time when it may have had the lowest possible viewership, as it aired opposite the NFL playoff game between the Green Bay Packers and the San Francisco 49ers. You may have missed it. But environmental/renewable-energy believers took the hit—and they are pushing back.

Stahl opened “The cleantech crash” with:

About a decade ago, the smart people who funded the Internet turned their attention to the energy sector, rallying tech engineers to invent ways to get us off fossil fuels, devise powerful solar panels, clean cars, and futuristic batteries. The idea got a catchy name: ‘Cleantech.’ Silicon Valley got Washington excited about it. President Bush was an early supporter, but the federal purse strings truly loosened under President Obama. Hoping to create innovation and jobs, he committed north of a $100 billion in loans, grants and tax breaks to Cleantech. But instead of breakthroughs, the sector suffered a string of expensive tax-funded flops. Suddenly Cleantech was a dirty word.

Midway through the segment, Stahl states: “Well, Solyndra went through over half a billion dollars before it failed. Then I’m gonna give you a list of other failures: Abound Energy, Beacon Power, Fisker, V.P.G., Range Fuels, Ener1, A123, ECOtality. I’m exhausted.”

Regarding Stahl’s list, Bruce Barcott, “who writes frequently about the outdoors and the environment,” in a rant for OnEarth Magazine about the 60 Minutes segment, asks: “Where was the evidence of cleantech’s crash in the ‘60 Minutes’ report?” He continues: “It seemed to boil down to the fact that Solyndra, Fisker, LG Chem, and five other clean tech companies went bankrupt. All true.”

Perhaps, to Barcott, eight bankrupt companies do not offer enough “evidence” to write green energy’s obit. How much would he need?

If Stahl had read the entire list of Obama-backed taxpayer-funded green-energy projects that have gone bust—let alone those that are circling the drain, she would have truly been fatigued. Together with researcher Christine Lakatos, I’ve been following the foibles for the past eighteen months. Our bankrupt list (updated May 2013) includes 25—17 more than Stahl cited (and there have been new failures since then).

Calling the “cleantech crash” segment a “hit piece,” Barcott claims: “the evidence of success is overwhelming.”

In the National Journal’s daily energy newsletter, “Energy Edge,” Amy Harder agrees with Barcott: “The story did not give much credence to successful renewable-energy ventures or to a major impetus for clean energy, which is global warming (as opposed to just job creation).” She adds: “Nonetheless, the report reminds green-energy advocates that Solyndra’s shadow is not nearly gone.”

For RenewableEnergyWorld.com, Scott Sklar, a DC lobbyist for clean, distributed-energy users and companies using renewable energy, claims: “In reality, clean energy has never looked better.” He called the 60 Minutes segment a “bash fest” and suggested: it “seemed like it was co-written by the Koch Brothers.”

For the National Journal, Ben Geman wrote: “Green-Energy Battle Flares Over ‘60 Minutes’ Report.” He concludes: “The report and the response are the latest thrust and parry over White House backing for green-energy projects that have faced heavy GOP criticism. The Energy Department—which Stahl said declined to grant her an interview—hit back on Sunday night. The department has for years noted that failed or badly struggling companies represent only a very small portion of the overall green-energy loan portfolio. ‘Simply put, 60 Minutes is flat wrong on the facts. The clean-energy economy in America is real, and we are more competitive than ever in this rapidly expanding global industry. This is a race we can, must, and will win,’ spokesman William Gibbons said in a statement.”

Ironically, while the believers busily “hit back,” the news tells a different story.

One of the projects featured by 60 minutes is KiOR—a Columbus, Mississippi, plant that turns wood products into gasoline, diesel, and fuel oil funded in part by venture capitalist Vinod Khosla—has shut down in a “cost-cutting move.” A January 9 report states: “the debate in Washington in changing alternative fuel standards drove down prices so low that the company couldn’t afford to continue production for now until it can get efficiencies to the point where it is producing at least 80 gallons of fuel for every ton of wood.” Even if Khosla’s KiOR is able to improve efficiencies to “80 gallons of fuel for every ton of wood”—which would be about four times the current production—that is still a terrible return. (Incidentally, Khosla started the bankrupt Range Fuels that was mentioned by Lesley Stahl in her brief list of failed “cleantech” programs.)

Robert Rapier, also featured in the 60 Minutes segment—which focused primarily on biofuels—reported on the Department of Energy’s follow up audit for Financial Assistance for Integrated Biorefinery Projects. Among his “results,” Rapier states: “40 percent of the demonstration-scale and commercial-scale projects selected from the FOAs [Funding Opportunity Announcements] were mutually terminated by the DOE and the recipients after expending more than $75 million in taxpayer dollars.” He cites the audit: “Program officials acknowledged the projects selected were not fully ready for commercial-scale operations and that the projects were high-risk. However, they indicated that the EPAct required them to move forward with commercial-scale projects…” Rapier concludes: “I think the lesson here is that political wishes continue to trump scientific realities, and taxpayers are left to pay the bills. … If only our political leaders understood that you can’t mandate technical breakthroughs, even if you require money to be spent trying to do so.”

Hardly the “overwhelming success” 60 Minutes’ detractors proclaim.

Barcott defends use of taxpayer money to support “emerging technologies” and acknowledges that “asking hard questions about if and when we should cut off that support” is, well, “hard.”

All of this “thrust and parry” is taking place during the time Congress is considering retroactively extending various tax breaks for cleantech projects—such as the Production Tax Credit for wind energy that expired on December 31, 2013. Amid the blows fired upon the renewable energy industry this past week, the Chicago Tribune (hardly a defender of right-wing policies) piled on with a January 5 op-ed encouraging “Congress and the White House to stop manipulating the tax code as America’s de facto energy policy: Thorough federal tax reform should sunset this arbitrary favoritism for wind energy and other politically favored industries.”

The other lobs, from CNBC and Fox News, landed on January 6.

CNBC’s Kudlow Report featured a “what happened to global warming” segment in which Larry Kudlow scoffs at the “all wrong” predictions that have now “come unglued.” His guest, Steve Hayward—a visiting professor at the University of Colorado, Boulder—stated: “Global warming is going away” like so many other scares before it. Hayward claimed that environmental crises follow a pattern: “Find a problem and blow it up into a world-ending crisis and demand endless political solutions.” Yucking it up, they laughed at the “sheer comedy of the ship getting stuck in the ice in Antarctica,” calling it “an eco-tourism stunt that backfired badly.”

On Fox Business, Stuart Varney’s “Stuart Says” feature was: “Annoying greenies influence policy that hurts U.S.” In his 2-minute-18-second monologue, Varney suggests that we “respond to this climate change demagoguery with ridicule. Frankly, the global warming crowd now looks ridiculous. People are laughing at them.”

Yes, the “annoying greenies” are on the defense—and, as the Green Bay players on that cold January 5 in Wisconsin knew, you can’t win on the defense.

Categories: On the Blog

Compassionate Conservatives Are Confusing A Slogan With An Agenda

Somewhat Reasonable - January 13, 2014, 12:23 PM

In the year since President Barack Obama’s re-election, a handful of advocates for compassionate conservatism have re-emerged to push back against limited government conservatives with the same agenda they’ve been peddling for nearly 15 years. Built around a message of governance in favor of the public good, they have chided the Tea Party and its limited government allies for ignoring the plight of the poor, heartlessly pursuing libertarian ends, and adopting a view of government’s proper role which is unrealistic and ahistorical.

The problem is that their own views are based on assumptions undermined by the failings of the George W. Bush presidency and by the organic growth in distrust in government among all Americans – and they fail to recognize the inherent weakness of their message, which confuses a political slogan with a coherent philosophy of governance and would allow for sweeping expansions of the state.

Former Bush speechwriters Michael Gerson and Pete Wehner have a long essay in National Affairs about conservative governance which has been getting some attention over the past few weeks. If it’s too much for you to read, you can read a shorter summary in Gerson’s Washington Post column here, which critiques “the identification of constitutionalism with an anti-government ideology” as “not only politically toxic; it is historically and philosophically mistaken.” Gerson continued on that theme in his subsequent column:

“One of the main problems with an unremittingly hostile view of government — held by many associated with the tea party, libertarianism and “constitutionalism” — is that it obscures and undermines the social contributions of a truly conservative vision of government. Politics requires a guiding principle of public action.”

“For popular liberalism, it is often the rule of good intentions: If it sounds good, do it. Social problems can be solved by compassionate, efficient regulation and bureaucratic management — which is seldom efficient and invites unintended consequences in complex, unmanageable systems (say, the one-sixth of the U.S. economy devoted to health care). The signal light for government intervention is stuck on green. For libertarians and their ideological relatives, the guiding principle is the maximization of individual liberty. It is a theory of government consisting mainly of limits and boundaries. The light is almost always red.”

“Conservatism (as Peter Wehner and I explain in our recent National Affairs essay, “A Conservative Vision of Government”) offers a different principle of public action — though one a bit more difficult to explain than “go” or “stop.” In the traditional conservative view, individual liberty is ennobled and ordered within social institutions — families, religious communities, neighborhoods, voluntary associations, local governments and nations. The success of individuals is tied to the health of these institutions, which prepare people for the responsible exercise of freedom and the duties of citizenship. This is a limiting principle: Higher levels of government should show deference to private associations and local institutions. But this is also a guide to appropriate governmental action — needed when local and private institutions are enervated or insufficient in scale to achieve the public good.”

The problem with Gerson’s framing here is obvious: in what way is appropriate governmental action to achieve a public good determined? If we are in an era when social institutions are in decline – partially due to government, but due as much to culture – what limits if any should expansionists recognize on the size and scope of government? This is the equivalent of the general welfare clause: If there is any limit to what can be defined as a public good, which of Michael Bloomberg’s policies would Gerson describe as unconservative? Isn’t it good for people to be healthier, even if the state is being a bit of a nanny? Were local and private institutions really dealing with those problems of too much soda and salt?

Philip Klein has more:

Throughout the piece, Gerson and Wehner make arguments that are very difficult to distinguish philosophically from liberalism. “The founders, then, provided us with a strong governing system – strong precisely because it could adapt to changing circumstances,” they write, echoing the liberal idea of a “living Constitution.” The authors also argue for a federal government “strong enough to shape global events and to guarantee a minimal provision for the poor, ill, and elderly.” Though Gerson and Wehner insist they believe in limited government, it’s hard to see what limiting principle they have in mind, as the definition of “minimal provision” could vary widely. Evidently, what philosophically separates them from liberals is a belief that the welfare state should be less centralized and technocratic.

Gerson and Wehner are not politicians, of course. But there are those who appear to be adopting their brand of reform. Senator Marco Rubio’s proposal this week for an anti-poverty reform agenda is a useful example of the problem these compassionate conservative assumptions run into when you attempt to put them into practice. While consolidation and block-granting are all well and good, Rubio doesn’t stop there:

“Mr. Rubio will also propose Wednesday to replace the Earned Income Tax Credit, which was used by 28 million tax payers in 2011, with a new “wage enhancement” system that directs federal money towards supplementing the income of people who work in “qualifying low-income jobs.”

Rubio’s motivations here are noble, and almost certainly pass Gerson’s “public good” test: wage stagnation is indeed a problem, and the EITC is a warped system which has racked up a roughly 25% fraud percentage over the past decade. But think for a moment about what he’s proposing here: a future of long fights over what a “qualifying low-income job” is, a definition ripe for unions to exploit under future Democratic administrations. And let’s not even get started on the audits and oversight. I thought that limited government advocates would want to get government out of businesses, not further integrating them. Conn Carroll explains:

All conservatives should ask themselves: Do I want to empower President Obama to decide which are the “qualifying low-wage jobs” and which are not? Is there any doubt Obama, or future liberal presidents, would use this new government program to play favorites in the market place? Would Obama or President Hillary Clinton every give wage subsidies to coal miners? Or Americans working at an oil refinery? Of course not. How would the federal government prevent fraud and abuse without making the new program a burden on participating employers? Instead of creating a brand new government program to subsidize low paying jobs, why not just cut the payroll tax for everyone? No favoritism. No fraud. No abuse. Just make it easier for employers to hire and let Americans take home more of their money every paycheck. Why not keep it simple?

Robert Rector has some criticism of Rubio’s plan here. But the bigger issue is that Rubio’s focusing on the wrong problem, as Scott Winship indicates here in a piece on another topic. Wage subsidies accept the left’s proposition that the problem here is a monetary one, where just giving poor people more money to be more comfortable in their poverty is the solution. That’s the opposite of a safety net, which – if properly designed – offers peace of mind to the most vulnerable in the event of total disaster. And Rubio’s answer ignores the fact that the real problem faced by the working and middle class isn’t wage stagnation so much as the actions of government have caused things like health care, education, gas and groceries to eat up a larger portion of their pocketbooks… an approach which would be far more consistent with a limited view of government’s role.

The best critique of Gerson and Wehner’s views may be this 2008 review of the former’s book, Heroic Conservatism, by John Podhoretz. In an eloquent passage, Podhoretz reveals the real failing ignored by the compassionate conservative advocates: they’re trying to turn a limited marketing slogan into a comprehensive governing philosophy.

But it is precisely the gap between the lofty principles expressed in speeches and the often compromised policies enacted by officialdom that has helped create public skepticism about the efficacy of government action to cure social ills. This skepticism vexes Gerson, but he does not offer a reasoned argument against it. He simply cautions conservatives not to be excessively fearful of the so-called “law of unintended consequences”—i.e., the possibility that government action intended to do good can have the opposite result…

“Like all true conservatives,” Gerson writes, “I believe in limited government.” But there is very little in this book about limiting government’s reach and a great deal about expanding it. Gerson’s call to idealism is inspiring, especially in his chapters dealing with Bush’s campaign to combat AIDS in Africa—surely the most underappreciated initiative of this presidency and perhaps of any presidency in modern times. And his account of the thinking behind the magisterial series of addresses through which George W. Bush transformed the foreign policy of the United States after September 11 is essential reading for any student of American politics.

But it seems Gerson never really grasped the truth about compassionate conservatism. This is that it was not a party program, let alone a developed political philosophy, but a marketing gimmick. It is thus little wonder that eight years of exploring the depths and reaches of this topic have led to a very singular brand of politics. Michael Gerson’s party of heroic conservatism is, I fear, a party of one.

The challenge of conservative governance in this era of the right’s muddled grappling with their ongoing philosophical disagreement will continue to create tensions between a faction that believes conservatism means doing the business of compassion more efficiently in pursuit of a vaguely defined public good, and one which believes it’s more important to restrain the warping effects of government and return the government to the role it occupied for most of American history, before LBJ set us on the path toward an unsustainable entitlement state… which was, if you think about it, entirely justified at the time if you adopted Gerson’s approach.

Here’s a hint: If your approach to conservative governance would justify the Great Society, it’s usually a sign you took a wrong turn somewhere. Maybe because the lights were all green.

[First published at The Federalist.]

Categories: On the Blog

Is Net Neutrality Trying to Mutate into an Economic Entitlement?

Somewhat Reasonable - January 13, 2014, 11:16 AM

Net neutrality activist opposition to AT&T’s new Sponsored Data offering exposes that the purpose of “net neutrality/open Internet” is not just about protecting consumers and free speech, or preventing anti-competitive behavior.

Those calling for an FCC investigation of AT&T’s Sponsored Data are trying to mutate the “net neutrality/open Internet” debate to also be about whether or not there should be permanent economic entitlements, i.e. downstream “zero-price” subsidies, for edge websites and applications – to “subsidize creativity” and start-up innovation via an explicit FCC ban on network termination charges.

Translation:  all websites and applications should be entitled, by “open Internet” network design, to no cost Internet distribution/access to consumers forever, regardless of the costs that their services cause everyone else to pay for.

That previously-rejected Title II broadband approach effectively would have the FCC mandate that consumers must permanently subsidize the video streaming of over-the-top (OTT) video streamers, like Netflix and Google-YouTube, which together consume half of the Internet’s downstream bandwidth per Sandvine.

[For more on the thinking behind this mutating view of net neutrality, see Professor Tim Wu’s 2009 paper: “Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality.”]

The mutation of the debate is evident in the over-the-top criticism of AT&T’s Sponsored Data offering — which obviously is not an actual violation of mainstream freedom-defined net neutrality or the FCC’s open Internet rules – but only a perceived violation of hoped-for Title II reclassified common-carrier-defined net neutrality.

Concerning AT&T’s voluntary Sponsored Data offering, a content seller now has an additional option to market their content to consumers by paying for the downstream bandwidth that their content consumes. In other words, “sponsored data” means the consumer is not “billed” for the sponsored bandwidth usage, the sponsor is “billed” for it.

Picking up part of a consumer’s tab to entice a consumer to try or use their product of service is marketing 101. It’s like free breakfast with a hotel room, or free financing with a new car. This consumer freebie practice is among the most normal, prevalent and effective marketing techniques in the economy today.

Importantly, AT&T’s Sponsored Data does not affect the speed of anyone’s delivery. It does not slow down, degrade, or impair anyone’s service and it does not block a consumer from accessing any legal content, application or device a consumer chooses. It isn’t discriminatory, because it’s totally voluntary. And it limits no one’s free speech.

AT&T’s Sponsored Data only lowers the cost of delivery of sponsored content to the consumer. Consumers benefit. They are hurt in no way.

Moreover, this is not a “double dip.” It is a simple cost transfer from the buyer (the consumer’s bandwidth bill) to the seller (the sponsor’s bandwidth bill). Thus the bandwidth in question is not paid twice; it is just paid by someone else than the consumer.

This is a two-sided market like a traditional newspaper, where both a consumer and a seller can pay for part of the cost of delivery of the content to the consumer. It is one of the great benefits, efficiencies, synergies and innovations of a market economy over a regulated one, because it enables and incentivizes more people to cover the cost of the broadband infrastructure from which they all benefit.

Now consider the highly-successful, effective pilot of “sponsored data” in the marketplace used by tens of millions of Americans for the last six-years without activists objecting it was a violation of net neutrality or an open Internet.

To promote its business, Amazon offers free delivery for physical goods ordered over Amazon, and equivalently offers free downstream delivery of its digital content to Kindle readers. Amazon has proved over the last six years that offering free downstream bandwidth delivery to Kindles stimulated more sales of both Kindle devices and e-book digital content.

Why has it been perfectly OK for Amazon to do this for six years, but now that AT&T is offering this exact same sponsored data opportunity to other businesses, it somehow isn’t?

So what is really going on here? Their response makes no sense unless there is another agenda.

Net neutrality activists are actively trying to move the goalposts – again – this time to Title II common-carrier-defined net neutrality. The net neutrality debate will no longer be just about free speech or no anti-competitive discrimination, blocking, degrading or impairing of bandwidth. They are now trying to make it about Professor Wu’s utopian “subsidizing creativity through network design,” i.e. formally requiring everyone to economically subsidize “edge creators” by imposing a common carrier price ban on termination fees.

Simply, what they want is that edge entities — which send their content downstream to the consumer — should NEVER have to pay for that downstream bandwidth. To achieve their utopian ideal of perfect creative egalitarianism on the Internet, activists want the FCC to have Title II common-carrier pricing authority so it can mandate an absolute ban on anybody paying specifically for downstream traffic.

Why activists are freaking out about AT&T’s Sponsored Data is that it defiles their utopian ideal of perfect Internet egalitarianism of universal, unlimited, free, downstream-bandwidth for edge creators.

In advancing their utopian ideal, if anyone is allowed to pay anything for downstream bandwidth, (even if it is the same speed and quality of everyone else’s bandwidth; is voluntary, it benefits the consumer; and is pro-competitive), it violates the egalitarian principle of “subsidizing creativity” via “zero-pricing.”

Free downstream bandwidth is necessary for “edge creators” to enjoy the exact same economics as broadband companies that have invested hundreds of billions of dollars to provide the very high-speed downstream bandwidth everyone uses. Simply net neutrality economic entitlements are about trying to eliminate any economic advantage of vertical integration of content distribution and ownership. That’s what activists mean when they say they don’t want the Internet model to be like cable model.

Activists covet duplicating the monopoly common carrier model for telephone, because it long enabled economic entitlements and wealth transfers outside of the normal legislative tax or appropriations processes. Historically, the monopoly common-carrier, telephone model ofstrict price regulation was quite effective in having urban consumers subsidize rural consumers and businesses subsidize consumers.

Free culture Net neutrality activists (Lessig, Wu, Crawford, et al) covet monopoly common carrier price regulation of broadband in order to mandate free downstream bandwidth, and to economically-destroy the capitalist media/cable companies that they loathe.

The monster political problem with the activists’ desired economic entitlement scheme is who subsidizes whom. For telephone service there was strong political consensus for implicit telephone subsidies where businesses and then more affluent urban consumers subsidized less fortunate rural consumers.

Perversely, net neutrality economic entitlements of zero pricing are upside-down, where activists expect consumers to subsidize corporate welfare for Netflix, Google-YouTube, and Amazon, all very profitable companies that obviously do not need subsidies.

In sum, activists are trying to mutate the “net neutrality/open Internet” debate towards implicit economic entitlements. Their ultimate purpose is to destroy the offline media/cable model and replace with a utopian, Internet commons model.

The fatal flaw with their concept is that any such inherently uneconomic pricing scheme will naturally be gamed and manipulated by arbitrageurs. And by far the biggest arbitrageurs and beneficiaries of free downstream bandwidth are Netflix and Google-YouTube.

While there remains strong consensus for freedom-defined net neutrality where Internet users should be able to access the legal content and applications of their choice, there is little appetite for official corporate welfare for Netflix and Google-YouTube – which together devour half of all Internet downstream bandwidth in the U.S.

[First published at the Precursor Blog.]

Categories: On the Blog

U.S. Wireless Economics Beat EU’s Wireless Uneconomics

Somewhat Reasonable - January 12, 2014, 3:17 AM

A new European study from Britain’s Office of Communications tries to argue that the EU’s wireless regulation approach is better than America’s. The New York Times’ clever headline on the report sees right through it: “Europeans pay less for mobile use, but at a cost.”

In Europe, regulators regularly lower prices and roaming rates for political purposes, ignoring the market economics or economic sustainability of their regulatory approach. The EU’s politics-of-the-moment interest in lower prices, based more on operating costs than total costs that fund long-term investments in infrastructure, ultimately harms consumer value.

The EU’s wireless approach is the equivalent of pushing farmers to sell almost all their current corn harvest to maximize corn supply to maximally lower prices in the short-term, which ignores the obvious need to save enough seed-corn to plant for a successful next harvest. Without market economic thinking and pricing that plans ahead and continually funds infrastructure investment, the EU will continue to fall further behind other countries around the world.

It should be no surprise that that is exactly what’s happening.

Europeans have slower data speeds than America and they know it. EU Vice President, Neelie Kroes, recently said:

Japan, South Korea, and the USA have around the same population, but … about 15 times more 4G. Europe needs to catch up.

France Telecom’s Deputy CEO recently echoed that sentiment:

It’s humiliating – we’re behind. . . . The web was mainly invented by a European, but . . . the fastest networks are in the U.S. and Asia.

The White House knows it too:

In 2012, North America’s average mobile data connection speed was 2.6 Mbps, the fastest in the world, nearly twice that available in Western Europe.

And Europeans should know that their lower-priced wireless services underfund network capacity, so consequently they get less value and productivity from the Internet — in average usage by consumers. Overall Americans use 50.2 gigabytes per month to Europeans’ 23.6 gigabytes per month according to USTelecom 2012 data.

The old adage is true here; you get what you pay for.

Finally, those activists in America who advocate for a more government-driven broadband marketplace, in hopes of the government mandating: common-carrier net-neutrality, bans on usage pricing/caps, and government-owned networks, need to realize that the EU uneconomics model — that they historically have held up as the shining example that America should follow — is badly falling behind and under-performing America’s market economics model.

Categories: On the Blog

Chris Christie’s Finest Hour

Somewhat Reasonable - January 12, 2014, 1:37 AM

In his Thursday morning press conference regarding “Bridgegate,” New Jersey Governor Chris Christie demonstrated the sort of leadership and responsibility-taking that has allowed him to be a popular Republican governor in a very blue state and the current front-runner for the Republican nomination for president (to the dismay of many conservatives).

In short, the scandal revolves around Christie’s deputy chief of staff, Bridget Anne Kelly, contacting a Christie-appointed Port Authority official named David Wildstein and telling him to cause traffic problems for the town of Fort Lee, NJ. It is believed, though not proven in the e-mails uncovered by the Bergen Record, that the purpose was retaliation against the Mayor of Fort Lee, Mark Sokolich, for not endorsing Christie in his most recent election.

Wildstein resigned last month and Kelly has been fired, and in today’s press conference Christie also reported that he has told his former campaign manager, Bill Stepien, who had knowledge of the events, to withdraw his name from consideration for state party chairman and to end his consulting for the Republican Governors Association. In a hearing before a state House committee on Thursday about the events, Wildstein asserted his Fifth Amendment right not to testify, perhaps wise given that some are blaming the death of an elderly woman on an ambulance delay caused by Wildstein and Kelly’s actions; the committee voted to “place him in contempt of this committee, which is a misdemeanor.”

Christie, for his part, was aggressively contrite. He said he felt “embarrassed and humiliated” but also said that what happened in his office is his responsibility and he would deal with it in every possible way, including going to Fort Lee today to meet with the mayor and apologize to the town’s people while in their town. Mayor Sokolich initially suggested that Christie stay away, saying that an apology is “premature” with investigations and more press conferences still to come, but Sokolich soon changed his mind.

As part of his explanation of why he had denied the story two weeks ago, Christie said that the story didn’t make sense to him from the beginning because Mayor Sokolich was never on his radar, that the Christie campaign was not looking for the mayor’s endorsement, and therefore that he didn’t believe early reports that someone in his campaign had retaliated against someone whom Christie didn’t think was important in his reelection. Christie said of Sokolich, “Until I saw his picture last night on television, I couldn’t have picked him out of a lineup.”

He also said that the sort of behavior represented by Bridgegate is the exception, not the rule, within his administration and reemphasized the bipartisan nature of his campaign and the way he has operated the New Jersey government, getting things done with Democrats.

I don’t write this as particularly a Christie fan: I think he has great strengths and important weaknesses.

But what struck me the most listening to this man speak was the couldn’t-be-greater contrast between him and Barack Obama. And not just his ability to work in a bipartisan fashion.

Chris Christie expressed credible contrition and a “buck stops here” attitude for a few days of traffic issues caused by someone else who kept him in the dark and then lied to him about it.

Barack Obama has never expressed believable remorse or taken responsibility, nor held anyone else responsible, for any of his scandals and disasters. Not for the IRS targeting conservatives. Not for the DOJ targeting reporters. Not for the death of four Americans in Benghazi. Not for the deaths of more Americans due to Fast and Furious. None of these things is directly his fault, but contrast the president’s non-reaction to Governor Christie’s words on Thursday:

I didn’t know about it but it’s my responsibility because I’m the governor. So I’m taking that responsibility and taking actions appropriate with executing that responsibility in accord with what the information is today.

Seriously, can you imagine a president who has not fired anybody for any of his administration’s many scandals doing anything like what Christie did today?

Nor has Obama apologized for causing millions to lose health insurance policies (and we’ve just seen the tip of the iceberg), triggering huge increases in health insurance premiums, raising deductibles, and limiting the choices of doctors and hospitals. Obamacare, the single most damaging piece of legislation in modern American history, is named for him and only passed because of him; it has his signature on it. If he didn’t know the law would do exactly what it is doing, he is a truly incompetent president. If he did know (which I believe he did) he should be profoundly apologetic, but that is impossible for the malignant narcissist who occupies the White House.

Additionally, the presumably liberal reporters at the press conference asked Chris Christie very aggressive questions such as that posed by CNN’s John King:

What kind of questions are you asking of yourself? . . . These are people you trusted. . . . they either thought ‘this is what the boss wanted’ or as a group they were willing to go rogue and then lie to you about it.

Christie’s answer:

I’m heartbroken about it and I’m incredibly disappointed. I don’t think I’ve gotten to the angry stage yet but I’m sure I’ll get there. But I’m just stunned. And what does it make me ask about me? It makes me ask ‘What did I do wrong to have these folks think it was OK to lie to me?’ There’s a lot of soul-searching that goes around with this.

Again, can you imagine Barack Obama having even a fraction of that introspection or public humility?

And, while they’ve been slightly braver lately, can you imagine the Washington press corps asking such tough questions of our Teflon (though it’s wearing thin) president? Can you imagine him giving an answer that takes less than 10 minutes and which actually answers a reporter who questions his character or competency or leadership? And can you imagine the fear in the reporter as to whether he would ever be called on again to ask another question?

Christie’s entire press conference was as good a response as he could have offered to the mess dropped on his head by a stupid, unscrupulous staffer, and an even better contrast to Barack Obama’s petty tyranny, his disconnectedness from the truth and from the public, and the timidity of most of those whom the nation relies on to ask him the hard questions and get the important answers.

Contrary to the hopes of liberals and the half-worried, half-hopeful reaction of staunch conservatives who simultaneously don’t entirely trust Christie but want very much to elect a Republican president in 2016, it is just as likely that Christie’s handling of this mini-scandal will help him politically as hurt him.

[First published at American Spectator.]

Categories: On the Blog

Will Illinois’ New Marijuana Law Eventually Duplicate the Results in CO and CA?

Somewhat Reasonable - January 12, 2014, 12:41 AM

Colorado broke new ground by ringing in the New Year with the nation’s first legal pot industry for recreational use, where a doctor’s note is not required and where production of the marijuana is unregulated (unlike in the Netherlands).  Although federal law still makes the sale of marijuana a crime, Attorney General Eric Holder made clear in August 2013 that he’s not much interested in prosecuting marijuana cases.

Following is an account of how the news was greeted in Colorado:

Hundreds of people — if not thousands by the end of the day — braved cold temperatures and intermittent snowfall on New Year’s Day to make history in Colorado by legally buying recreational marijuana.  Lines formed well before dawn at most pot shops, but many said that it was worth the lack of sleep and discomfort to be among the first in the world to buy marijuana in state-sanctioned stores.  Across the state, 37 shops opened for business and dozens more are expected to open in the coming weeks and months.

The owner of two Colorado Springs medical pot shops who came to Denver to toast the dawn of pot sales for recreational use had this to say:

This feels like freedom at last.  It’s a plant, it’s harmless, and now anyone over 21 can buy it if they want to. Beautiful.

Sounds wonderful, but the pot shop owner is wrong, according to Dr. Marvin Seppala, the Chief Medical Officer at the Hazelden Foundation, a prominent drug recovery center in Minnesota. He stated there is danger of addition and studies on the brain have shown the use of pot alters the hippocampus affecting short-term memory. It also affects the lungs.  According to Yale University scientists There is a higher chance of users suffering  from chronic bronchitis. Marijuana smoking also exposes a user’s respiratory system to infectious organisms such as molds and fungi.

Brian Vicente, one of the co-authors of Amendment 64 called the grand opening “a watershed moment” in U.S. history and said Colorado will serve as a model for other states preparing to legalize marijuana by “charting a path for the rest of the country to follow.” Considering the potential mental and physical negative aspects of smoking marijuana, that path may be filled with snares and dangers.

Of note is that neither Gov. John Hickenlooper or Denver Mayor Michael Hancock were present at the opening day celebrations. Both had campaigned against Amendment 64, passed by Colorado voters in 2012.

In the midst of all the celebratory hoop-la on New Year’s Day over what can rightly be called Colorado’s pot experiment came predictions of a “hogwild” Colorado train wreck. Coming from a surprising source, former Rep. Patrick Kennedy (D-R.I.) had this to say in a conference call hosted by “Smart Approaches to Marijuana” the day before the Amendment 64 took effect.

Colorado and Washington state — where stores will open later in 2014 — are ‘canaries in the coal mine.’  There are a lot of unintended consequences’ . . . that will make them ponder whether this was the right decision. Kennedy predicted more traffic accidents, increased school truancy, higher drop-out rates, and a general decrease in public health.

Linda Chavez, author of An Unlikely Conservative: The Transformation of an Ex-Liberal, had these cautionary remarks about the “Rocky Mountain high” in a Dec. 29, 2013 Viewpoint article published in the Chicago Sun-Times:

Even before marijuana becomes legal, the effects of the drug are apparent in everyday life in the city I now call home (Boulder). The work ethic in Boulder already leaves something to be desired. Try finding someone to put in a full eight-hour day doing home repair, painting or yard work in this college town. It they show up by 10, you’re lucky. . . . But the real damage will be to Colorado’s youth. Young brains are especially vulnerable to marijuana use, with studies showing that becoming drug-dependent is far more likely among people who start using marijuana in their teens. Drug related school suspensions are a major problem in Colorado, with more than 5,000 occurring in the last year for which there are records.

The legal limit is a quarter of an ounce for non-Colorado residents, while residents can purchase up to an ounce of marijuana at a time. Buyers are not restricted from shopping from store to store, although under state law they are only allowed to have up to one ounce at a time. Possession of more than one but less than eight ounces of marijuana is a misdemeanor and carries fines up to $5,000 and up to 18 months in jail. More than eight ounces is considered a felony and fines can be as high as $100,000 and up to three years in prison. Amendment 64 does restrict where marijuana can be smoked.

One gain is how marijuana warehouses are creating massive energy demands with an increased carbon footprint. An energy bill received by the owner of a Colorado marijuana grow facility was for $21,500 for one month of electricity and climate control. He didn’t complain to the utility but simply paid his bill, admitting that this is just the cost of doing business for him and others in the medical marijuana business.

[First published at Illinois Review, with co-author Bonnie O'Neil.]

Categories: On the Blog

Antibiotic Surprise

Somewhat Reasonable - January 10, 2014, 12:18 PM

Almost everyone these days uncritically accepts that the solution to antibiotic-resistant disease is to use fewer antibiotics. What about using more antibiotics? More varieties that is.

When doctors found penicillin was losing its efficacy as our first line of defense against bacterial infections, the medical community didn’t throw up its hands and use less. New antibiotics were developed! And thankfully so.

No… not stronger antibiotics. New varieties were developed that kept us ahead of the bacteria that ail us, humans and animals alike, to the point where doctors and veterinarians now have well in excess of 100 antibiotics to rely upon in fighting infection.

But now, thanks to overregulation resulting from tax-funded lobbying by anti-antibiotic, naturopathic, homeopathic, sustainability and organic activists, pharmaceutical companies have largely abandoned the development of new antibiotics. It simply does not pay to bring new antibiotic strains to market in the current regulatory environment. Pharmaceutical companies find it much simpler and more profitable to focus instead on treating phony ailments like attention-deficit disorder, obesity and erectile dysfunction.

According to anti-antibiotic activists, the root of the problem is in using growth-promoting antibiotics (GPAs, also referred to as sub-therapeutic antibiotics) in livestock feed. Back in the 1940s the agricultural community realized that by adding antibiotics to animal feed in low doses, animals not only stayed healthy but also gained more weight.

This resulted in significant reductions in the cost of meat which, naturally, drove activists crazy thanks to the misguided belief that paying less for food is bad. So they launched negative public-relations campaigns alleging that this practice was largely responsible for the increase of antibiotic-resistant diseases in humans, and that it allowed farmers to get rich quick by raising animals in unsanitary and inhumane conditions. And the next thing you knew people started to avoid using antibiotics when they fell ill under the mistaken assumption that it was the overuse of antibiotics that made them ill in the first place.

Activists fueled the fire of misunderstanding by inventing the term “superbug,” implying that bacteria were becoming stronger, requiring ever-stronger antibiotics. But the fact of the matter is that bacteria don’t become stronger when confronted with antibiotics; they simply adapt.

When a bacterium develops resistance to an antibiotic, just like when a weed develops resistance to a herbicide, we don’t resort to ever-stronger versions of antibiotics or herbicides to win the battle. Different varieties do the trick. And while the development of new antibiotics and herbicides is characterized by activists in linear, ever-increasing terms, it is more-accurately described as cyclical, like the hands on a clock.

Let’s say that we went from 0:00 to 1:00 AM when Alexander Fleming discovered penicillin – humankind’s first true antibiotic – in 1928. Now, 85 years later, we’re probably somewhere around 6:00 AM on the dial, and still have a long way to go (decades for sure) before we run the full 24 hours and return to where it all began.

This means that the antibiotics we put back on the shelf today due to antibiotic-resistant bacteria could someday be taken back off the shelf by our great-great-grandchildren and used again in the confidence that they will have the same efficacy as when they were first developed. And in the meantime, we need more varieties to continue the cycle. A couple hundred more would be nice.

This concept is more difficult to grasp than the activists’ simplistic model of bacteria that develop superpowers. It also explains how medical and veterinary science moved forward over the last century, and consistently made life better, at least until activists gained a political foothold.

There will always be those who believe we must go backwards so as to move forward. But we never stood still before. Why start now?

Let’s keep moving forward on antibiotics.

Categories: On the Blog

The Very Green Keystone Pipeline Delay

Somewhat Reasonable - January 10, 2014, 11:03 AM

Stopping the construction of the Keystone XL pipeline from carrying Canadian oil, a major trading partner and ally of the United States, is just part of a much larger environmental agenda aimed at preventing access to this energy source, but it is larger in scope; stopping or slowing the development of America’s huge reserves of coal, oil, and natural gas.

Just before 2013 came to an end, the Sierra Club sent out an email claiming that “2014 is shaping up to be a defining year for the environment” warning that “Superstorms, wildfires, and mass destruction from climate change threaten us all. Future generations and endangered species like wolves and bear are counting on us.” This is pure fear-mongering. In 2013, all the factors mentioned were in decline.

On the first Earth Day in 1970, here are just some of the predictions that were made:

“We have about five more years at the outside to do something.”
— Kenneth Watt, ecologist

“Civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind.”
— George Wald, Harvard Biologist

“We are in an environmental crisis which threatens the survival of this nation, and of the world as a suitable place of human habitation.”
— Barry Commoner, Washington University biologist

“Man must stop pollution and conserve his resources, not merely to enhance existence but to save the race from intolerable deterioration and possible extinction.”
New York Times editorial, the day after the first Earth Day

On December 29, 2013, the Sierra Club was celebrating the shutdown of the 150th coal-fired plant that provided electricity. They want more solar and wind power, the least reliable source of the smallest production of electricity. They applauded the Obama administration’s plans to restrict any drilling for oil in the Arctic and “proposed new EPA rules on carbon pollution.” There is no carbon pollution.

According to Wikipedia:

“Carbon is the 15th most abundant element in the Earth’s crust, and the fourth most abundant element in the universe by mass after hydrogen, helium and oxygen. It is present in all known life forms, and in the human body carbon is the second most abundant element by mass (about 18.5%) after oxygen. This abundance, together with the unique diversity of organic compounds and their unusual polymer-forming ability at the temperatures commonly encountered on Earth make this element the chemical basis of all known life.” [Emphasis added]

Calling carbon a threat to human life is so absurd that it defies known science, but that was exactly the basis for all the “global warming” lies, claiming that carbon dioxide would warm the Earth when it plays no such role in the atmosphere. Suggesting that humans have any role in “climate change” is the basis for the legislative and regulatory objectives of the Obama administration that declared a “war on coal” when it is in reality a war on electricity production, the most essential element of life in America.

My friend, David Rothbard, the president of the Committee for a Constructive Tomorrow (CFACT) a free market think tank, led a team to visit to Fort McMurray, Canada in 2012 to see first-hand the tar sands from which oil is being extracted. “I have to tell you,” he said, “not just by the technology being used to bring much-needed oil up to the surface in situ with hardly a trace of environmental impact . . . but much more so, by the infectious spirit of opportunity in this bustling frontier town. To me, Ft. McMurray is a symbol of the kind of progress and prosperity that can come when people are able to discover and access abundant natural resources in a way that serves society and protects the environment.”

What the Greens see in Northern Alberta and in Nebraska that is enjoying an economic boom thanks to the fracking technology that produces more natural gas are people having more wealth and freedom, more jobs, more energy for the rest of us.

Pipelines in the Midwest

According to the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration:

The nation’s more than 2.6 million miles of pipelines safely deliver trillions of cubic feet of natural gas and hundreds of billions of ton/miles of liquid petroleum products each year. They are essential: the volumes of energy products they move are well beyond the capacity of other forms of transportation. It would take a constant line of tanker trucks, about 750 per day, loading up and moving out every two minutes, 24 hours a day, seven days a week, to move the volume of even a modest pipeline. The railroad-equivalent of this single pipeline would be a train of 75 2,000-barrel tank rail cars every day.

Pipeline systems are the safest means to move these products. The federal government rededicated itself to pipeline safety in 2006 when the PIPES Act was signed. It mandates new methods and makes commitments for new technologies to manage the integrity of the nation’s pipelines and raise the bar on pipeline safety.

So why has President Obama, for five years now, blocked the extension of the Keystone XL pipeline to America’s Gulf Coast where many of the nation’s refineries are located? Because it represents jobs and further economic development.

The AFL-CIO wants to see Keystone XL built:

The American construction industry has suffered greatly. The national unemployment rate for construction workers remains about 13% and far too many of our members have lost homes and are struggling to put food on the table. For many members of our unions, Keystone XL is not just a pipeline; it is, in the most literal sense, a life line.

Typical of Obama’s lies was his view of the Keystone XL pipeline when he said “They keep on talking about this—an oil pipeline coming down from Canada that’s estimated to create about 50 permanent jobs—that’s not a jobs plan.” His own State Department estimated that 42,000 jobs would result from the construction of the pipeline.

Obama does not want more jobs. He wants more Americans on the unemployment dole and on food stamps. He doesn’t want more electricity, more gas and diesel for our vehicles. He wants to destroy the nation’s healthcare system. He wants to undermine the economic growth of America in every way he can.

And thanks to the Democratic Party and the millions who still believe in “global warming” and “climate change” he was elected to a second term in 2012.

[First published at Warning Signs.]

Categories: On the Blog

Google’s Robots and Creeping Militarization

Somewhat Reasonable - January 10, 2014, 8:13 AM

Google CEO Larry Page has rapidly positioned Google to become an indispensable U.S. military contractor. Google recently purchased Boston Dynamics, a robotics pioneer that produces amazing humanoid robots for the U.S. Defense Department.

This development invites attention to Google’s broader military contracting ambitions — especially since Boston Dynamics is the eighth robotics company that Google has bought in the last six months.

Just like drones are the future of air warfare, humanoid robots and self-driving vehicles will be the future of ground warfare according to U.S. defense plans.

There are many other reasons why the U.S. military is on path to become Google’s single largest customer. Likewise these reasons indicate Google has a closer working relationship with the NSA than it acknowledges publicly.

First, consider the military value of Google’s research and development efforts and the military contracting pipeline revenue it could represent.

Page created Google X, which is Google’s secretive research and development lab tasked with pursuing “moon-shot” technology breakthroughs. So far, Google X is best known for its earth-bound self-driving cars and Google Glass.

Tellingly, the purpose of the original “moon-shots” by the Soviet Union and America was military. The two Cold War superpowers were in a “space race” to publicly showcase the technological and military supremacy of their rival ideologies.

Simply, America’s Cold War “moon-shot” was about winning the military space and arms race with the former Soviet Union.

Even more tellingly, the greatest application for most all of Google X’s “moon-shot” technological efforts — are military. Like drones, self-driving vehicles, and robot soldiers could enhance military surveillance and payload delivery while reducing risks to military personnel.

Google Glass’ advances in wearable augmented reality could offer American soldiers tactical advantages over enemy combatants. Google’s Project Loon could quickly provide a supplemental battlefield bandwidth advantage in remote areas.

Second, Google’s personnel hiring signals its aspirations for a closer Google-military relationship.

In 2012, Google hired Regina Dugan, the head of DOD’s Defense Advanced Research Projects Agency (DARPA), DOD’s in-house “moon-shot” idea factory. At the time a Google spokesperson said: “Regina is a technical pioneer who brought the future of technology to the military during her time at DARPA.  She will be a real asset to Google.”

Simply, few people could have a better insider knowledge of the U.S. military’s future technology needs that Google could exploit than Ms. Dugan.

Third, Google has a long history of working for, and with, the NSA and the other U.S. intelligence services.

In 2004, Google purchased satellite mapping company Keyhole, which was strategically important enough to be funded by the CIA’s investment fund In-Q-Tel.

Google turned the aptly-named “Keyhole” surveillance capability into the wildly popular Google Earth and Google Maps service used by over a billion people and over one million websites.

In 2008, the San Francisco Chronicle reported that U.S. spy agencies use “Google equipment as the backbone of Intellipedia, a network aimed at helping agents share intelligence.” The article also reported that Google had a support contract with the NSA.

In 2010, the Washington Post reported that Google worked with the NSA to figure out how Chinese hackers broke into Google. The New York Times later reported that those Chinese hackers stole Google’s entire password system called Gaia.

Fourth, Google has too many unique capabilities and metadata sets that are of strategic value to the NSA to believe Google’s denials that it does not work closely with the NSA.

Snowden’s NSA revelations have underscored the high value the NSA puts on collecting the metadata of who is communicating with whom, when, where, and how much.

Remember Google is metadata central. It is veritable surveillance catnip for the NSA.

Think about it. Google’s cookies track the Internet behavior of nearly 2 billion people. Over a billion people regularly use Google Search, Maps, Android, and YouTube. And about a half billion people use Gmail and Google + social media.

Former NSA Director Michael Hayden has said “Gmail is the preferred Internet service provider of terrorists worldwide.”

Thus Google has the unique capability to surveil for the NSA the online behavior of a targeted group of people by country, language, interests, keywords, names, communications, physical location, movements, time and more.

Simply put, Google’s world’s largest computer already can do what the NSA wants to do most.

Add to all this Google’s unique capability to instantaneously translate 80 different languages across applications, and why wouldn’t the NSA covet a close working relationship with Google?

Finally, the behavior of America’s greatest military rivals, Russia and China, speaks volumes about the likely extent of unreported close cooperation between Google and NSA/DOD.

Remember it was the U.S. Defense Advanced Research Projects Agency (DARPA) that invented the Internet in the early ‘70s. It is no coincidence that Russia and China have been the most hostile to allowing Google’s Internet dominance to extend into their countries.

In summation, the accumulating evidence indicates that the U.S. military is on path to become Google’s single largest customer.

Page’s strategic positioning of Google’s biggest investments to strongly align with future U.S. military needs is no coincidence. It is likely tacit confirmation of a much stronger relationship than Google has acknowledged to date.

Page’s creeping militarization of Google will increasingly become problematic for the privacy of Google’s foreign users, which generate over half of Google’s revenues. While U.S. law purportedly prevents the NSA from surveilling Americans without a warrant, the NSA’s official mandate is to surveil foreign signals intelligence.

In short, Google’s creeping militarization means Big Brother Inc. aspires to work more closely with Big Brother government.

[First published at the Daily Caller.]

Categories: On the Blog

Obama’s Climate Change Lies

Somewhat Reasonable - January 10, 2014, 12:43 AM

The extreme cold that gripped the nation at the beginning of the year just added to the growing public dismissal of the claims that “greenhouse gas emissions” would lead to a dangerous stage of “global warming.”  Indeed, even the charlatans that have devoted decades to this hoax are now using the phrase “climate change.”

We tend not to recall what the weather was like a year ago. In May 2013, Dennis T. Avery, a senior fellow at the Heartland Institute, noted:

Lots of us are commenting on the U.S. having the second coldest spring in the official thermometer record (starting ca. 1860) and the coldest since 1975. This cold spring highlights another climate cycle that has nothing to do with carbon dioxide (CO2).

Records of cold weather are being broken all around the nation and the world. That’s not exactly what the United Nations Intergovernmental Panel on Climate Change (IPCC) has been predicting since it was set up in 1988 to get nations to sign onto the Kyoto Protocols to reduce CO2 emissions, claiming they were causing warming. [Editor's note: Examine the scientific rebuttal to the IPCC from the Nongovernmental International Panel on Climate Change (NIPCC).]

We are all going to have to pay attention to what President Obama will have to say in his forthcoming State of the Union speech and other pronouncements about “climate change” because that is going to be a major theme of his as he begins the second year of his second term. Climate change ranks right up there with “If you want to keep your healthcare plan, you can. Period.”

Last February, the Union of Concerned Scientists (UCS), an extremely liberal group, wrote Obama to say “We are inspired and gratified by your commitment to address the threat of climate change. Still gushing, they said that the “science of climate change…calls for action to swiftly and deeply reduce heat-trapping emissions and better prepare our nation for now unavoidable impacts.”

If one merely refers to “climate change” without specifically identifying it, how can the UCS be so sure that emissions from our cars, trucks, manufacturing, and of course the coal-fired plants that, until Obama arrived, provided half of all the electricity Americans need and use. To save us all from the “climate change” 150 of these plants have been closed since he took office.

To replace them, the Obama administration “invested” in a variety of wind and solar businesses, most of which promptly went bankrupt with our taxpayer funds. To get us to stop driving, Obama advocated high-speed railroads in a nation where people routinely get on an airplane to get to distant cities. Amtrak has never made a profit since it was created in 1970.

The President, however, can be counted upon to talk about “climate change” as if recent examples of it threaten our lives. The facts say something else. For example, there has been no global warming for over 17 years.

In 2013 there was a record quiet tornado season and severe tornadoes have been declining for 40 years.

Other than tropical storm Sandy in 2012, the U.S. has gone more than 8 years without a major hurricane strike and the U.S. has experienced the fewest forest fires in three decades and, over the same time period, there has been no sea level rise on the west coast of the U.S. or Canada.

In contrast, an Antarctic global warming expedition of 74 eco-tourists, certain that sea ice there was melting, was trapped by it. In the summer of 2013, all manner of yachts, sailboats, and others got trapped by sea ice while trying to sail the Northwest Passage after being told it would be free of ice. It turned out that 2013 recorded the second highest volume of sea ice ever recorded.

It’s not that the climate is not changing. The climate—measured in decades and centuries—has always changed and it does so in remarkably predictable cycles. The period between ice ages is 11.500 years. We are overdue for the next one, though we did have a mini ice age from 1300 to 1850.

All this scientific data guarantees one thing. The president is lying when he talks of “climate change” by which he means a warming cycle. He is lying when he blames it on carbon dioxide which plays no role whatever in climate change. The $7.45 billion his administration gave to 120 nations between 2010 and 2012 to cope with “climate change” was an utter waste of our taxpayer dollars. Given the nation’s $17 trillion in debt, it was money we did not have, but which added to our debt.

Recall, too, that Obama refused to negotiate with the Republican Party in 2013 when it wanted to reduce such spending, resulting in the government shutdown that was blamed on the GOP.

You can forget about “climate change”, but you should keep in mind what the president is doing to bankrupt America and deny it the production of the energy it needs as the weather gets colder.

[First posted at Warning Signs.]

Categories: On the Blog
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