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The Policy and Commentary Blog of The Heartland Institute
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The EPA is More Concerned with What Sounds Good Than What Actually Works

September 15, 2014, 2:55 PM

In this hyper-partisan environment, it is good to know that a majority of Senators can still agree on an issue. When such a rare moment happens, the rest of us should pay attention, as it is probably something very important.

On September 11, 53 Senators (43 Republicans and 10 Democrats) signed a letter to Gina McCarthy, Administrator of the Environmental Protection Agency (EPA), begging for a 60-day extension of the comment period for the “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Generating Units”—also known as the Clean Power Plan (CPP). The original 120-day comment period—which is already longer than the traditional 60-day comment period—is coming to a close within the next 30 days (October 16).

Regarding the EPA’s new plan, the letter calls the coordination needed between multiple state agencies, public utility commissions, regional transmission organizations, and transmission and reliability experts: “Unprecedented, extraordinary, and extremely time consuming.” The Senators ask for more time so that states and stakeholders can “fully analyze and assess the sweeping impacts that the proposal will have on our nation’s energy system.” It also points out: “The EPA proposal provides no mechanism for adjusting the state emission rate targets once they are adopted”—which makes it imperative that the states can fully “digest” the rule, review the 600 supporting documents, and collect the data and justification for the states’ responses.

It is not just the majority of Senators who have concerns about the EPA’s proposed rule, a diverse and growing coalition, including the Exotic Wildlife Association, the Foundry Association of Michigan, California Cotton Growers Association, Texas Aggregates and Concrete Association, The Fertilizer Institute, Georgia Railroad Association, Nebraska Farm Bureau Federation, electric utilities and co-ops, and city and state Chambers of Commerce from coast-to-coast, has sprung up in opposition to the plan. Yet most people are unaware of the potential impacts or of the pending deadline for public comment.

I have written on the CPP twice in the past few months—originally when it was first announced onJune 2 and then after I gave testimony in Atlanta at one of the EPA’s four scheduled “listening sessions.” Upon release, we didn’t really know much—after all, it is, as the Senators’ letter explains, complex and sweeping. But as more and more information is coming out, we see that the impact to the economy and U.S. energy security will be devastating.

Despite my efforts to spread the word—with my second column on the topic being one of my most popular ever, I find that the CPP isn’t even on the radar of the politically engaged (let alone the average person). Because this is an issue of utmost importance, I am, once again, bringing it to the attention of my readers with the hope that you will share it with everyone you know. At this point, we don’t know if the EPA will extend the comment period, so please take time now to get your comments in. The Hillreports: “Adding 60 days to the comment period could make it harder for the EPA to finalize the rule by June 2015, as President Obama has ordered.”

I’ve written this week’s column with the specific intent of giving you verbiage that you can simply cut and paste into the comment form.

The CPP will radically alter the way electricity is generated, transmitted, distributed and used in America—all with dramatic cost impacts to the consumer. It is based on the discredited theory that climate change is a crisis caused by the use of fossil fuels emitting carbon dioxide into the atmosphere. It aims to reduce overall carbon dioxide emissions by 30 percent below 2005 levels by 2030. The combination of the CPP and previous regulation will shut down more than 40 percent of coal-fueled generation—representing 10 percent of all electricity-generation capacity—within the next 6 years.

What will this forced, premature elimination of America’s electric capacity do?

The proposed EPA plan will seriously threaten America’s electric reliability

Unless the EPA backs down on its harsh regulations and coal-fueled power plants get a reprieve, blackouts are almost guaranteed—especially in light of the projected cold winter. About the 2014 “polar vortex” that crippled the U.S., Alaska Republican Senator Lisa Murkowski, at an April Senate hearing on grid reliability, stated: “Eighty-nine percent of the coal electricity capacity that is due to go offline was utilized as that backup to meet the demand this winter.” Murkowski’s comments were referencing coal-fueled power plants that are already due to be shut down based on regulations from five years ago, before the proposed CPP additionally reduces supply. Affirming Murkowski’s comments, Nicholas Akins, president and CEO of Ohio-based American Electric Power Company Inc., sees the 2014 near crisis as a warning sign. At that same hearing he said: “The weather events experienced this winter provided an early warning about serious issues with electric supply and reliability. This country did not just dodge a bullet—we dodged a cannonball.” And, Federal Energy Regulatory Commissioner Philip Moeller said: “the country is undergoing an unprecedented energy shift in a very short time frame.” And added: “grid operators in the Midwest are struggling to gauge whether they will have sufficient capacity to handle peak weather during the next five years.” While these comments are about the 2014 severe cold, Texas experienced a similar scare in 2011, when a protracted heat wave resulted in razor-thin reserve electric capacity margins. A Reuters report titled: “Heat waves pushes Texas power grid into red zone,” stated: “Texas has the most wind power in the country, but the wind does not blow during the summer.” Just a few months earlier, Texas ice storms forced rolling blackouts for hours because electric supplies dropped below demand.” All of these reports are before the projected closure of an additional 75 megawatts of coal-fueled electricity generation due to the new regulations. If McCarthy was serious when, prior to the release of the proposed regulations, she stated: “Nothing we do can threaten reliability,” she’d withdraw this plan, as it will do just that.

The proposed EPA plan will chase away more American industry

While the CPP appears to be about forcing the power sector into reducing carbon-dioxide emissions, there are spillover impacts of higher electricity rates on overall economic activity—especially energy-intensive industries such as steel, manufacturing, and chemicals. America’s abundance of affordable, reliable energy provides businesses with a critical operating advantage in today’s intensely competitive global economy. The EPA’s proposal will reduce America’s advantage, as it’s acknowledged that the proposed regulations will raise electricity rates in the contiguous U.S. by 5.9% to 6.5% in 2020. Europe, and especially Germany, is threatened by an industry exodus due to its higher energy costs that have been created by its move to increase green energy. Germany’s pharmaceutical and chemical giant Bayer is already making significant investment in its Chinese manufacturing operations, with expansion also taking place in Brazil and India. If industry continues to leave the U.S., the CPP will have the opposite effect. Emissions will increase as companies move to countries with lower labor costs, cheaper energy, and lax environmental policies. An additional unintended consequence will be more jobs lost in manufacturing.

The proposed EPA plan will kill hundreds of thousands of jobs

In late July, the International Brotherhood of Electrical Workers (IBEW) International President Edwin D. Hill said: “If these rules are implemented as written, dozens of coal plants will shut down and with no plans to replace them, tens of thousands of jobs will be lost and global carbon emissions will rise anyway.” Investor’s Business Daily reports: “The IBEW has now joined the United Mine Workers of America, the Boilermakers and several other unions opposed to the new anti-carbon rules.” The United Mine Workers of America has estimated that the rule will result in 187,000 direct and indirect job losses in the utility, rail, and coal industries in 2020 and cumulative wage and benefit losses from these sectors of $208 billion between 2015 and 2035. The EPA rules hitting industry in rapid succession createuncertainty—and, as we’ve seen with Obamacare—uncertainty thwarts investment and hiring. The same industries that will be taking the regulatory hit from the CPP, are expecting additional impacts from the follow-on rules that are yet to be promulgated. No wonder the economy is sluggish and the jobs picture is bleak.

The proposed EPA plan will cause harsh economic consequences while having virtually no impact on the reported goal of stopping global climate change

From increased energy costs to job losses, the CPP will damage the economy. A statement from the International Brotherhood of Electrical Workers on the EPA proposal, points out: “estimates regarding the damage to jobs and the economy created by poorly planned climate regulations have consistently been shown to be true in comparison to the overly optimistic predictions made by the EPA.” Perhaps these economic consequences would be worth it, if they actually did anything to really reduce carbon-dioxide emissions—assuming what humans breathe out and plants breathe in is actually the cause of global warming. But even the EPA acknowledges that the CPP is less about reductions and more about being a global leader to “prompt and leverage international decisions and action.” In Hillary Clinton’s September 4 speech at Senator Harry Reid’s National Clean Energy Summit, she stated that the U.S. needs to lead other countries in green energy and that we need to show the world we are committed. Yet, the U.S., which did not ratify the Kyoto Protocol, is the first country to actually reduce carbon dioxide emissions and meet the Kyoto requirements. We are already a leader, but the other countries aren’t following—instead they are abandoning the sinking green ship and Germany, which claims to still be committed to the green ideology, is actually increasing its number of coal-fueled power plants and CO2 emissions. Carbon dioxide emissions from non-Organisation for Economic Co-operation and Development countries—such as China and India—are projected to grow by nine billion tons per year. The Partnership for a Better Energy Future reports: “for every ton of CO2 reduced in 2030 as a result of EPA’s rule, the rest of the world will have increased emissions by more than 16 tons.” Our reduction in 2030 would offset the equivalent of just 13.5 days of carbon-dioxide emissions from China. The CPP will become the definition of “all pain and no gain.” Or, as economist Thomas Sowell calls it: “replacing what worked with what sounded good.”

The EPA’s October 16 deadline will be upon us before you know it. Take a few minutes now to send them your comments. Pick any of the above suggestions, customize them as you please, and send them on to the EPA. For America to grow, we need energy that is effective, efficient, and economical, rather than that which is threatened by the EPA’s flood of excessive and burdensome regulations.

Categories: On the Blog

Decompetition Decompetition Decompetition

September 15, 2014, 2:47 PM

The FCC’s new professed mantra is “competition competition competition.”

However, the FCC appears to be pursuing a de facto policy of decompetition rather than competition.

Decompetition is regulation that undermines competition in order to justify more regulation.

How could this perverse outcome happen?

It’s what one gets when one combines an obsolete communications law and regulators nostalgic for the regulatory power of a bygone era.

The FCC is increasingly acting like a 20th century regulator searching for relevance in a 21st century marketplace.

The 1934 Communications Act created the FCC. The 1996 Telecom Act changed national communications policy from monopoly utility regulation to competition policy.

Communications competition policy has been wildly successful in the U.S., resulting in the most robust facilities-based broadband competition in the world and $1.2 trillion in private Internet infrastructure investment.

Earlier this year, an appeals court ruled that the FCC did not have the authority to regulate broadband “information services” like a monopoly, common-carrier utility. However the court did recognize that the FCC does have some general regulatory authority under Section 706 of the 1996 Telecom Act to promote advanced telecommunications capability.

Ironically, for many years the FCC legally assumed that this same Section 706 provision did not confer the regulatory authority that they have now been granted by the appeals court.

The perverse problem with the FCC’s current complete dependency on the 1996 Telecom Act’s Section 706 provision for its broadband authority is that it now always must find broadband deployment and competition insufficient in order for the authority to remain usable by the FCC to regulate.

The FCC now needs competition to fail for the FCC to succeed.

This outcome also directly contravenes Congress’ stated purpose of the 1996 Act: “To promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.”

Consider the evidence of this perverse outcome.

To effectively extend its regulatory authority for years, the FCC is proposing to redefine broadband from a baseline speed threshold of 4 Mbps to 10 Mbps and potentially as much as 25 Mbps, which would have the result of ruling that there is dramatically less broadband competition than today, simply by deeming it so by unilaterally “moving the goalpost.”

This is the regulatory equivalent of changing the rules of a football game so that after competitors have marched 97 yards down the field quickly without any penalties, the referee mid-game moves the goal-line 150 yards further, or even potentially 525 yards further, before the referee may rule it a touchdown.

The FCC also has signaled that as competition referee it will not recognize America’s four national LTE wireless broadband providers — Verizon, AT&T, Sprint and T-Mobile — as real broadband competitors, because the FCC believes wireless broadband is not a “full substitute” to fixed broadband service.

To reach this self-serving and almost comical conclusion, the FCC has to ignore how 200 million Americans routinely use smartphones and tablets on the move to do essentially most every function that they can do on their fixed broadband at home.

This is the regulatory equivalent of the FCC referee of a football game arbitrarily ruling mid-game that the team that has fielded a smaller more mobile team doesn’t belong on the field competing with a larger less mobile team — even when 200 million consumer fans have long paid to watch this game.

What a perverse definition of competition when the FCC expects competitors to field the exact same type of players and strategy as their opponents. Isn’t the essence of being a competitor finding a different way, strategy or team with which to compete?

The FCC may be professing a mantra of “competition, competition, competition,” but their signaled decisions suggest a de facto FCC policy of “decompetition, decompetition, decompetition” — regulation that undermines competition in order to justify more regulation.

The best evidence that the Communications Act is obsolete, and in urgent need of modernization, is that the FCC has lost sight of Congress’ competition purpose in the 1996 Telecom Act — “to promote competition and reduce regulation” — and effectively reversed it to promote regulation and reduce competition.

American consumers deserve a competition policy aligned with their interests, not the FCC’s.

[Originally published at DailyCaller]

Categories: On the Blog

America’s Accessible Cities

September 12, 2014, 11:03 AM

Cities have been pivotal role to improved living standards, because of the opportunities they facilitate. This is particularly evident over the past two centuries, as world urbanization has risen from 3 percent to over 50 percent, and to more than 80 percent in the United States.

The prosperity of urban residents depends in large measure on their ability to reach the best available jobs in the city in a reasonable period of time. This requires access. University of Paris economists Remy Prud’homme and Chang Woon Lee and othershave shown that cities tend to perform better economically if the transport system permits more jobs to be reached in a fixed time, such as 30 minutes. Cities are defined as metropolitan areas, which include core municipalities and suburbs. As former World Bank planner Alain Bertaud has indicated, “large labor markets are the raison d’être of large cities.”

With frequent press attention on traffic congestion and “gridlock,” it may be surprising that work trip travel times in US cities are better than those of high income competitors in other nations (See Table). Indeed, the University of Minnesota’s David Levinson, found that the typical employee can reach two-thirds of jobs in major US metropolitan areas within 30 minutes.

Census Bureau data indicates that the average work trip travel time in US cities of more than 5 million population was approximately 29 minutes each way. Western European cities of more than 5 million population have an average travel time of 32 minutes. Toronto, Canada’s only city of this size, has a travel time of 33 minutes. East Asian cities with more than 5 million residents (Tokyo, Osaka-Kobe-Kyoto, Nagoya, Seoul, Hong Kong and Singapore) have far longer average travel times — at 42 minutes. Australia’s two largest cities (Sydney and Melbourne), which are yet to reach 5 million, have an average travel times of 35 minutes.

A number of examples can be cited. For all its well known traffic congestion, Los Angeles has the shortest travel time of any high income world megacity (cities over 10 million population), at just 27 minutes. Paris and New York are the strongest competitors, at 34 minutes, while Tokyo’s 50 minutes is nearly double that of Los Angeles (estimated from travel time distributions reported by the Japan Statistics Bureau).

Dallas-Fort Worth is the best performing US city between 5 million and 10 million population, at 26 minutes. Travel time in Houston, Miami and Philadelphia is almost as short, at 27 minutes. Only the Germany’s Ruhr Valley (Essen-Duisburg-Dortmund) does better than these cities, at 24 minutes. Hong Kong’s travel time is the longest in this population category, at 46 minutes. This may be surprising, since in many ways Hong Kong conforms to current urban planning ideals. It is the densest urban area in the high income world and the largest transit work trip market share.

The US travel time advantage extends to metropolitan areas with more than 1,000,000 population. The average work trip travel time was 25 minutes in the US, compared to 27 minutes in Western Europe and 28 minutes in Canada. No data was found for the smaller metropolitan areas of East Asia or Australia.

Why are US cities so accessible? Despite the hostility of planners toward the automobile, the secret lies in automobile access. Generally, automobiles are faster than other modes, such as transit, walking and cycling for trips of the lengths required in modern metropolitan areas. The US also has more dispersed (decentralized) employment, which increases access and shortens travel times. Only 8 percent of major metropolitan area employment is in the downtown areas (central business districts) in US cities. Similar factors account for the Ruhr Valley’s quick travel times in Germany, with unusual employment dispersion and comprehensive freeway coverage (for Europe).

By contrast, nearly half the population and half of the jobs are in pre-1980 suburban areas (not the urban core), according to my analysis of zip code data. This makes more employment closer to people throughout the metropolitan area, on generally less congested roads.

Meanwhile, cars are getting cleaner. The Department of Energy forecasts the new US (and Canadian) fuel economy standards will reduce gross greenhouse gas emissions a quarter by 2040, despite a strong increase in driving and a conservative assumption of no progress in new car emissions after 2025. Yet things are likely to get much better, with groundbreaking advances by manufacturers, automated vehicle developers and government agencies. The California Air Resources Board is aiming for a statewide fleet that emits zero emissions by 2050, on the way to 100 percent.

Superior access is one reason that US cities dominate international income rankings. Access to greater employment choices is good for metropolitan economies. The result is a higher standard of living and less poverty than would otherwise be the case.

 

[Originally published at Huffington Post]

Categories: On the Blog

Never Forget 9/11: The Enemies of Liberty are Deadly Serious

September 11, 2014, 6:46 AM

It is sobering to think that most high school kids today have no living memory of the 9/11 attacks. Even if they are seniors this year, those kids were only about 4- or 5-years old — an age when the memories they will keep are few and fleeting.

Every reader of this blog remembers where they were and what they were doing on that terrible morning — a day that started so crisp and happy after a long hot summer on the East Coast, where I was living at the time.

What is important to remember and teach to those children — especially these days, due to the rise of ISIS — is that 9/11 was not a “tragedy.” It was an act of war by barbarians armed with modern technology and determined to strike a blow against what the West had built since the Enlightenment — a society that protects the liberty of an individual human being to live his or her own life in the way they desire.

I had not thought of this before writing this post, but imagine a world in 2001 in which the Cold War was still raging. Imagine a world in which Soviet Communism was on equal global footing with the United States. Would Osama bin Laden have directed his soldiers to fly planes into the Kremlin? The question answers itself.

The aim of al-Qaida — and it’s latest manifestation, ISIS — was and remains subjugation. Legions of increasingly well-armed and sophisticated Islamofascists still consider it a religious mandate to destroy liberty. They will happily and violently sacrifice their lives to force the sons and daughters of the Enlightenment to surrender to their 7th-century version of Islam or die, which they see as the will of Allah. We will be fighting these barbarians for generations. And a long view of history teaches us that the forces of goodness and light do not always prevail.

It matters not your position on the wars in Afghanistan and Iraq. It matters not your position on whether Gitmo should be closed. It doesn’t even matter whether your political hero is Ron Paul or Barack Obama. What matters is that the West never forgets what it is the enemies of liberty are willing to do to defeat liberty — and that we do everything we can to preserve it. The alternative is too miserable to contemplate.

Categories: On the Blog

Islam Relevant to Obama … But Only When it Comes to Real Threats, Like Global Warming

September 10, 2014, 10:48 PM

President Obama on Wednesday night — the eve of the 13th anniversary of the 9/11 attacks — said Islamic religious instruction is wholly irrelevant to the cause of ISIS … which stands for the Islamic State of Iraq and Syria. ISIS, I suspect, considers Islam relevant to its cause of creating a 7th century caliphate.

But that is not to say that there aren’t some elements of foreign policy in which the Obama administration thinks religion — even Islam — is a key component. Secretary of State John Kerry stated on Sept. 3 that “religion matters,” and he’s made it “a mantra” in his State Department and his foreign policy stance.

Of course, Kerry didn’t say that in context of the stuff Obama talked about Wednesday night — the struggle for freedom and human rights against the Islamo-fascists of ISIS. No, no, no, no, no. “Religion matters” only when it comes to the fight against man-caused global warming — which has paused for nearly 18 years, and which scientists say is not primarily caused by human activity.

Kerry also said in February that man-caused global warming (which isn’t happening) is as “big a threat to the world as terrorism, poverty, and weapons of mass destruction.” And, in a pander to his audience, Kerry said global warming (which also isn’t a crisis) will hurt Muslim countries worst of all.

Top. Men.

HT: Our friend Anthony Watts, who has more here. Watch Kerry’s statement below:

Categories: On the Blog

These People Think the Way to Keep Things Fast is to Bring in the Government?

September 10, 2014, 10:42 AM
The Left consists of two groups of people running on two parallel yet very different paths to Oblivion.

The Left’s leadership knows their Huge Government ideas are absurd and don’t work – but they’ll be in charge after the collapse they induce so they’re fine with it.

The Left’s rank and file actually thinks more government equals better – despite centuries of evidence to the contrary.

Then there’s the Tech World – by and large a subset of the Left.  These people should certainly know better about government sloth and general incompetence damaging their industry – likely the nation’s and the world’s fastest moving and best.

But the Tech World has thus far remained steadfastly impervious to facts.  Or they – like the Left’s leadership – have an agenda all their own.

How else to explain this?

Large US Tech Firms Plan ‘Go Slow’ Day in Protest over Net Neutrality Rules

On Wednesday, these Internet companies will protest the federal government not unilaterally power grabbing “enough” authority over the Internet.  And to demonstrate their upset with this lack of government control – they are mock slowing down their sites.

Get that?  To protest the Internet staying exactly the same as it’s always been – basically government-free – they will dramatically alter the Internet.

And get this – they are slowing the Web to demand more government Web imposition.  Which if they get their wish will inexorably lead to a dramatically slower Web.

What’s the government track record on fast?  Department of Motor Vehicles, anyone?

A Fatal Wait: Veterans Languish and Die on a VA Hospital’s Secret List

Government ‘Falls Behind Building Targets’

Government Falls Behind in Prompt Payments to Suppliers

Government Falls Behind on Repayment Schedule for Foreign Oil Companies

Government is Slow to Invest In Cybersecurity

Speaking again of Tech – how does the government do with technology?

Cost of ObamaCare Website Tops $1 Billion

A slew of management failures led to the site’s disastrous launch, according to a new GAO report.

How’s it working now?

With ObamaCare Systems Still Slow, Backlog Builds Among the Uninsured

Shocker – it isn’t.

Why Government Tech Is So Poor

Government Tech Problems: Blame The People Or The Process?

Sadly, it’s “C” – All of the Above.

How does the FCC itself do on Tech?

Government Agency That Wants To Commandeer The Internet Just Had Their Website Crash — Twice

Comforting.

So why are these Tech World denizens demanding greater government Internet involvement?  Perhaps they do indeed have an agenda of their own.

Like having the government mandate that they not have to pay for the unbelievable amounts of bandwidth they use.  Crony Socialism, anyone?

(Companies like) Netflix (are) looking to get Big Govs the world over to impose a whole new, ridiculously expansive definition of Network Neutrality.

“Netflix CEO Reed Hastings says that ‘net neutrality must be defended and strengthened,’ calling out giants like Comcast and Verizon for bad behavior.

Charging Netflix for their exorbitant bandwidth use isn’t “bad behavior it’s basic economics.  Imagine the government mandating that gas stations charge the same to fill up Escorts and Escalades.

If Netflix doesn’t pay for what it uses, all the rest of us do  in the form of higher prices for our Internet Service Providers (ISPs).

Why should a grandmother who only emails her grandkids pay substantially more to subsidize Netflix Ned and his twenty-movie-a-day download habit?

Bandwidth hogs?

Netflix Now More Than 1/3 of Internet Traffic

So it turns out the Tech World Left is also part of the Crony Socialist “I’ve Got Mine” Coalition.  They’ve built their market share – on the backs of others.  And they want the government to mandate that their free ride remains free.

While the rest of us pick up their tab.  And suffer the ever-slowing, economy-crushing dullness of a government-controlled Internet.

The neck the Tech World Left has grabbed – and wants to hand to the government for wringing – is their Golden Goose.  They have to know this, right?

[Originally published at Human Events]

 

Categories: On the Blog

What would Hillary Clinton’s Energy Policy Look Like?

September 09, 2014, 1:13 PM

At Senator Harry Reid’s seventh National Clean Energy Summit held in Las Vegas on Thursday, September 4, Hillary Clinton said: “This is the most consequential, urgent, sweeping collection of challenges we face as a nation and a world.” She wasn’t talking about ISIS or the growing terrorist threat, but about climate change.

Her spot on the program has been referenced as: “her first energy and climate speech of a publicity tour that many believe is the springboard to a presidential campaign.”

In addition to the obvious misperception about “the challenges we face as a nation and a world,” her speech had several subtle, but instructive, misperceptions to explore.

For example, when addressing “unpredictable” subsidies for green energy projects, she claimed that $500 billion is spent every year subsidizing fossil fuels. According to the International Energy Agency (IEA), in 2012, global fossil fuel subsidies did, in fact, total $544 billion, however, citing that figure in the same breath as U.S. tax incentives and subsidies for renewable energy is deceptive at best.

Most global subsidies for fossil fuels are from oil rich countries that use low cost to keep the kingdom happy. A study from The Institute for Energy Research on global energy subsidies concludes: “Many Americans are confused by the large amount of global fossil fuel consumption subsidies that the IEA calculates, not realizing that these subsidies have nothing to do with tax policy, research and development or loan guarantees, where most U.S. programs are directed.”

Let’s look at those “incentives” for renewables and why they are “unpredictable.” Germany and Spain led the world in green energy subsidies but have since considerably dialed back on them.

In Germany, after more than a decade of green-energy subsidies, its electricity rates and carbon-dioxide emissions have gone up. According to a September 4 Reuter’s report, Germany’s reliance on coal has gone up each of the past four years. Germany is looking at levies for residential photo-voltaic system owners—something also being considered (and, in some cases, implemented) in the U.S.

After nearly100 billion U.S. taxpayer dollars have gone to green-energy projects, the stimulus-funded program has been plagued with failure, corruption, and illegal activity. Meanwhile—as has happened in Germany—utility bills have gone up and public support for subsidies has declined. After more than twenty years of taxpayer funding, theProduction Tax Credit (PTC) for wind energy finally expired on December 31, 2013—though forces that benefit from it are still hoping to extend it retroactively. The PTC is “unpredictable” at best.

In her Q & A session, Clinton said: “One day last summer, Germany got 74 percent of its energy from renewables.” Like the comment about $500 billion in global subsidies for fossil fuels, her speech writers did their homework—but they plucked data without looking deeper and as a result made her look foolish. The 74 percent figure is fact. But it represents a fraction of only one day, not recent history, or even a pattern. One month later, Germany got 50 percent of its electricity demand from solar—but six months earlier, in the January cold, it got only 0.1 percent. In his post in the Energy Collective, Robert Wilson, a PhD Student in Mathematical Ecology at the University of Strathclyde, calls Germany’s situation: “more of a coal lock-in than a solar revolution,” as the need for electricity, especially in the cold, grey days of January, requires the steady supply of coal-fueled electricity.

One other item to question: Clinton clearly collaborates with her former boss on his Clean Power Plan—which has a growing coalition of opponents.

The Clean Power Plan is about reducing carbon-dioxide emissions from existing power plants. In her speech, Clinton repeated a falsehood Obama likes to reference: reducing CO2 emissions will improve children’s’ respiratory health.

“Hillary apparently doesn’t know the difference between soot and CO2,” quipped Jane Orient, MD, and president of Doctors for Disaster Preparedness. She continued: “And the American Lung Association pretends it doesn’t. No one can claim that the tiny increase in CO2 from coal-fueled generating stations increases asthma—just being indoors with other breathing humans increases CO2 much more and doesn’t cause asthma.”

Clinton took a couple risks for which she deserves some credit. She strayed from the safe turf, when she admitted that Obama’s trajectory on climate change policy hit “a brick wall of opposition” at the 2009 United Nations climate talks in Copenhagen.

She also acknowledged: “Energy is a major part of our foreign policy.” As such, she supports development of American natural gas and oil, calling it an example “of American innovation changing the game.”

Addressing the benefits of producing and exporting natural gas and oil, she said: “Assuming that our production stays at the levels, or even as some predict, goes higher, I do think there’s a play there.” Noting it could help Europe and Asia, she added: “This is a great economic advantage, a competitive advantage, for us. …We don’t want to give that up.”

America does have an energy advantage—and Clinton is correct: “We don’t want to give that up.” Why then, does she (and President Obama) support policies that would take that away—or at least, not encourage our energy growth?

That fact that Clinton chose to start her publicity tour, the perceived springboard to her presidential campaign, with a speech on energy should signal to all of America how important the topic truly is.

Categories: On the Blog

Don’t give up America’s Economic and Competitive Advantage

September 09, 2014, 10:09 AM

“This is the most consequential, urgent, sweeping collection of challenges we face as a nation and a world.”

With 9-11 nearly upon us, ISIS is brazenly beheading American journalists—with a promise of more to come; Christian congregations have been bombed during worship, churches have been destroyed, monasteries attacked, entire cities purged, hundreds of thousands have fled, while others have been slaughtered; and cities, weapons, banks, and key infrastructures are being captured. Surely, with all of these horrors playing out before our eyes, the crisis in Syria and Iraq is the “most consequential, urgent, sweeping collection of challenges we face.” No, the quote above was made about climate change by Hillary Clinton—the heavy favorite for the Democratic 2016 presidential nomination—before a standing-room-only crowd at Senator Harry Reid’s seventhNational Clean Energy Summit (NCES 7.0) held in Las Vegas on Thursday, September 4.

We could almost forgive Secretary of State John Kerry for his similar statement made in Jakarta, Indonesia, on February 16, when he referred to climate change as: “perhaps the world’s most fearsome weapon of mass destruction.” ISIS hadn’t yet erupted onto the international stage. But now we know better. We know that the world isn’t less violent than it has ever been. We know that it isn’t more tolerant than it has ever been.

Apparently, Clinton hasn’t been following the news. Or, as Senator Rand Paul pointed out: she’s “battling climate change instead of terrorism.”

Clinton’s speech on Thursday was presented to a “friendly crowd,” who cheered her on. In his introduction, Reid declared that Clinton is: “able to explain things in a way we all understand” and said that she was: “the first to identify the fact that there is something called climate change.” Her spot on the program has been referenced as: “her first energy and climate speech of a publicity tour that many believe is the springboard to a presidential campaign.”

While no one in the Mandalay Bay ballroom questioned the validity of her statements—and the Q & A session led by White House Senior Advisor John Podesta resembled a lovefest—there was more than her misperception about “the challenges we face as a nation and a world” to question.

For example, when addressing “unpredictable” subsidies for green energy projects, she claimed that $500 billion is spent every year subsidizing fossil fuels. According to the International Energy Agency (IEA), in 2012, global fossil fuel subsidies did, in fact, total $544 billion, however, citing that figure in the same breath as U.S. tax incentives for renewable energy is deceptive at best.

The Institute for Energy Research (IER) did a study on global energy subsidies that revealed: “Fossil fuel consumption subsidies are most prevalent in the Middle East and in North Africa.” The IER report states: “On a per-person basis, fossil fuel consumption subsidies are highest for the United Arab Emirates at $4,172 per person, Kuwait at $3,729 per person and Saudi Arabia at $2,291 per person.” It concludes: “Many Americans are confused by the large amount of global fossil fuel consumption subsidies that the IEA calculates, not realizing that these subsidies have nothing to do with tax policy, research and development or loan guarantees, where most U.S. programs are directed.”

white paper from the Independent Petroleum Association of America offered the following insights culled from a Congressional Research Service Memo titled Energy Production by Source and Energy Tax Incentives. “While fossil fuels (including oil, natural gas, and coal) accounted for 78 percent of domestic energy production, they received just 13 percent of energy related ‘tax incentives’ in 2009. Meanwhile, renewables accounted for more than 77 percent of the roughly $20 billion in ‘tax incentives’ that went to energy, but generated less than 11 percent of domestic energy production. Renewables have received additional boosts as part of Federal spending packages enacted under the banner of economic recovery.”

Let’s look at those “incentives” for renewables and why they are “unpredictable.” Germany and Spain led the world in green energy subsidies but have since considerably dialed back on them.

In Germany, after more than a decade of green-energy subsidies, its electricity rates and carbon-dioxide emissions have gone up. According to a September 4 Reuter’s report, Germany’s reliance on coal has gone up each of the past four years. Germany is looking at levies for residential photo-voltaic system owners—something also being considered (and, in some cases, implemented) in the U.S.

After nearly 100 billion of U.S. taxpayer dollars have gone to green-energy projects, the stimulus-funded program has been plagued with failure, corruption, and illegal activity—though the Department of Energy recently announced a new round of loan guarantees for green-energy projects. Meanwhile—as has happened in Germany—utility bills have gone up and public support for subsidies has declined. After more than twenty years, the Production Tax Credit (PTC) for wind energy finally expired on December 31, 2013—though forces that benefit from it are still hoping to extend it retroactively. (Clinton did point out that wind energy is a very big part of farmers’ income in New York.) The PTC is “unpredictable” at best.

In her Q & A session, Clinton said: “One day last summer, Germany got 74 percent of its energy from renewables.” Like the comment about $500 billion in global subsidies for fossil fuels, her speech writers did their homework—but they plucked data without looking deeper and as a result made her look foolish. The 74 percent figure is fact. But it represents a fraction of only one day, not recent history, or even a pattern. One month later, Germany got 50 percent of its electricity demand from solar—but six months earlier, in the January cold, it got only 0.1 percent. In his postin the Energy Collective, Robert Wilson, a PhD Student in Mathematical Ecology at the University of Strathclyde, calls Germany’s situation: “more of a coal lock-in than a solar revolution,” as the need for electricity, especially in the cold, grey days of January, requires the steady supply of coal-fueled electricity.

One other item to question: Clinton clearly collaborates with her former boss on his Clean Power Plan, which has a growing coalition of opponents as diverse as the Exotic Wildlife Association, the Foundry Association of Michigan, California Cotton Growers Association, Texas Aggregates and Concrete Association, The Fertilizer Institute, Georgia Railroad Association, Nebraska Farm Bureau Federation, electric utilities and co-ops, and city and state Chambers of Commerce from coast-to-coast.

The Clean Power Plan is about reducing carbon-dioxide emission from existing power plants. In her speech, Clinton repeated a falsehood Obama likes to reference: reducing CO2 emissions will improve children’s’ respiratory health.

“Hillary apparently doesn’t know the difference between soot and CO2,” quipped Jane Orient, MD, and president of Doctors for Disaster Preparedness. She continued: “And the American Lung Association pretends it doesn’t. No one can claim that the tiny increase in CO2 from coal-fueled generating stations increases asthma—just being indoors with other breathing humans increases CO2 much more and doesn’t cause asthma.”

Orient went on to explain: “Some very bad studies of associations between high air pollution days and ‘premature’ deaths are used to extrapolate as with the liner no-threshold radiation hypothesis—lots of diesel exhaust may provoke an asthma attack, therefore a vanishingly small increase in soot affecting many people will cause some asthma. Some dust is soot, which is carbon, quod erat demonstratum.” She added: “Unemployment, poverty, high electricity bills don’t figure into the calculation.”

Dr. Charles Battig, a board certified anesthesiologist, told me: “asthma sufferers, just like individuals without any respiratory disease, have 4 to 5 percent CO2 in their lungs as a normal component of their exhaled air. The CO2 levels will vary during an asthma attack. The presence of CO2 in expired air is normal for all humans, and ambient CO2 is not a trigger for an asthmatic attack.  CO2 is not a pathological pollutant per se at levels 100 times that of ambient (inspired air); 400ppm ambient vs. 40,000 ppm in expired air.”

As Reid announced, Clinton may be able to “able to explain things in a way we all understand,” but she is creative with the data—using it to make the points she needed to curry favor with the NCES 7.0 audience.

In its review of her speech, the National Journal pointed out: “As expected, Clinton’s keynote address at the National Clean Energy Summit didn’t wade into much controversial territory.” She never touched on the Keystone pipeline that the State Department positively reviewed under her watch and which, in 2010, she stated that she was “inclined to approve.”

Clinton did, however, take a couple risks for which she deserves some credit. She strayed from the safe turf, when she admitted that Obama’s trajectory on climate change policy hit “a brick wall of opposition” at the 2009 United Nations climate talks in Copenhagen.

She also acknowledged: “Energy is a major part of our foreign policy.” As such, she supports development of American natural gas and oil, calling it an example “of American innovation changing the game.”

Addressing the benefits of producing and exporting natural gas and oil, she said: “Assuming that our production stays at the levels, or even as some predict, goes higher, I do think there’s a play there.” Noting it could help Europe and Asia, she added: “This is a great economic advantage, a competitive advantage, for us. …We don’t want to give that up.”

America does have an energy advantage—and Clinton is correct: “We don’t want to give that up.” Why then, does she (and President Obama) support policies that would take that away—or at least, not encourage our energy growth?

That fact that Clinton chose to start her publicity tour, the perceived springboard to her presidential campaign, with a speech on energy should signal to all of America how important the topic truly is. Energy makes America great!

Categories: On the Blog

Why Academic Achievement Matters

September 08, 2014, 2:29 PM

[NOTE: The following is excerpted from a chapter of the next Heartland Institute book titled Rewards: How to use rewards to help children learn — and why teachers don’t use them well.]

 Socrates famously said “the unexamined life is not worth living.” He was reflecting on the private benefits of learning about ourselves and the world around us. The more we learn about our own thoughts and desires, abilities, limitations, and surroundings, the better able we are to make informed choices about our health, family, occupation, recreation, and myriad other parts of our lives. The non-monetary benefits of learning may be difficult to measure, but they shape and determine what we recognize to be the quality of our life.1

Academic achievement produces public as well as private benefits. Eric Hanushek of the Hoover Institution and his colleagues have shown the strong relationship between school achievement and economic growth.2Hanushek and former secretary of state George P. Shultz estimate that if our school mathematics scores were comparable to Canada’s over the next 20 years, U.S. gross domestic product (the value of goods and services produced in the country) would improve by $70 billion over the next 80 years, a figure equivalent to an income boost of 20 percent for each U.S. worker.3 That would be a considerable social benefit.

Academic achievement also benefits democratic institutions. When compared to other nations, those with higher levels of education and ability show stronger democracy, less crime, and greater political liberty.4 Corruption is less common in countries where citizens are well educated.5

Within societies, academic abilities increase in step with levels of education, and a nation’s relative wealth increases along with both.6 Cities also tend to grow more quickly when this kind of human capital creates a capable workforce that remains economically productive over time.7

Nations tend to benefit to the degree their citizens fulfill their potential. When citizens develop their abilities, liberty tends to expand and moral behavior tends to be higher.8Following Hanushek’s work, Heiner Rindermann of Germany’s Chemnitz University of Technology and James Thompson of University College London found a nation’s overall abilities and knowledge are deciding factors in a nation’s wealth, scientific progress, and economic freedom.9 The world’s wealthiest nations have sustained strong intellectual traditions that result in notable accomplishments in engineering, mathematics, technology, and basic and applied science.10 Cross-national studies emphasize the importance of encouraging exemplary learners to achieve as much as they are able. Societies that support top performers and seek to maximize their abilities appear most likely to benefit all their citizens.11

Finally, the quick early learners become ever more knowledgeable and skilled as time goes on, the result of what is called the “Matthew Effect” after this passage in the Bible’s Book of Matthew: “For whoever has will be given more, and they will have an abundance.” Their work becomes increasingly better than others’ and easier for them, which can reinforce their desire and ability to persevere through ever-more-difficult challenges.12 Academic achievement in elementary and secondary school can foster higher levels of achievement in college and beyond.

Effective primary and secondary schools offer learning opportunities and rewards for acquiring the knowledge and developing the thinking skills students need to succeed in college and workplaces and to participate as citizens in free societies.13 If more students can achieve at high levels, they, their compatriots, and their society stand to benefit.

Herbert J. Walberg and Joseph L. Bast are chairman and president, respectively, of The Heartland Institute and authors of Rewards: How to use rewards to help children learn – and why teachers don’t use them well (October 1, 2014; ISBN 978-1-934791-38-7), from which this article is excerpted.

Notes

1. Luis E. Vila, “The Non-Monetary Benefits of Education,” European Journal of Education 35, no. 1 (March, 2000): 21–32, http://www.jstor.org/stable/1503615.

2. Eric A. Hanushek and Ludger Woessmann, “The Role of School Improvement in Economic Development,” PEPG 07/01, Program on Education Policy and Governance, Harvard University, January 9, 2007, http://www.hks.harvard.edu/pepg/PDF/Papers/PEPG07-01-Hanushek-Woessmann.pdf.

3. Eric Hanushek and George P. Shultz, “Education Is the Key to a Healthy Economy,”The Wall Street Journal, April 30, 2012, http://online.wsj.com/article/ SB1000142405270230351340 4577356422025164482.html.

4. Heiner Rindermann, “Relevance of Education and Intelligence for the Political Development of Nations: Democracy, Rule of Law, and Political Liberty,” Intelligence 36, no. 4 (July–August 2008): 306–22.

5. Edward L. Glaeser and Raven Saks, “Corruption in America,” Discussion Paper Number 2043, Harvard Institute of Economic Research (Cambridge, MA: Harvard University, 2004).

6. Heiner Rindermann, “Relevance of Education and Intelligence at the National Level for the Economic Welfare of People,” Intelligence 36, no. 2 (March–April 2008): 127–42.

7. Edward L. Glaeser and Albert Saiz, “The Rise of the Skilled City,” Discussion Paper Number 2025, Harvard Institute of Economic Research (Cambridge, MA: Harvard University, 2003).

8. Heiner Rindermann, supra note 6.

9. Heiner Rindermann and James Thompson, “Cognitive Capitalism: The Effect of Cognitive Ability on Wealth, as Mediated Through Scientific Achievement and Economic Freedom,” Psychological Science 22, no. 6 (June 2011): 754–63.

10. Heiner Rindermann, Michael Sailer, and James Thompson, “The Impact of Smart Fractions, Cognitive Ability of Politicians and Average Competence of Peoples on Social Development,” Talent Development and Excellence 1 (July 2009): 3–25. Knowledge in the humanities, social sciences, and literature may also promote aspects of national well-being, but fair and objective measures in these fields are nearly impossible to develop.

11. Nancy Ewald Jackson and Earl C. Butterfield, “A Conception of Giftedness Designed to Promote Research,” in Robert J. Sternberg and Janet E. Davidson, eds., Conceptions of Giftedness (New York, NY: Cambridge University Press, 1986), pp. 151–82.

12. Herbert J. Walberg and Shiow-Ling Tsai, “Matthew Effects in Education,” American Educational Research Journal 20, no. 3 (Fall 1983): 359–74; Marian J. Bakermans-Krannenburg, Marinus H. van Ijzendoorn, and Robert H. Bradley, “Those Who Have, Receive: The Matthew Effect in Early Childhood Intervention in the Home Environment,” Review of Educational Research 75, no. 1 (Spring 2005): 1–26.

13. Edward L. Glaeser, Giacomo A. Ponzetto, and Andrei Shleifer, “Why Does Democracy Need Education?” Journal of Economic Growth 12, no. 2 (June 2007): 77–99.

[First published at Human Events.]

Categories: On the Blog

Proud to be an American: What Should It Mean?

September 08, 2014, 10:38 AM

America! For more than two hundred years the word has represented hope, opportunity, a second chance, and freedom. In America the accident of a man’s birth did not serve as an inescapable weight that dictated a person’s fate or that of his family. The individual owned his own life and was free to shape it as his own mind guided him.

Once a newcomer stepped on American soil he left the political tyrannies and economic barriers of the “old world” behind. A willingness to work hard and to bear the risks of one’s own decisions, the possession of a spirit of enterprise, and a little bit of luck were the keys to the doors of success in their “new world” home.

American Spirit of Independence, Innovation and Benevolence

Visitors from Europe traveling to America in the 19th century, Frenchmen like Alexis de Tocqueville and Michel Chevalier, marveled at the energy and adaptability of the ordinary American. An American paid his own way, took responsibility for his actions, and showed versatility in the face of change, often switching his occupation, profession, or trade several times during his life, and frequently moving about from one part of the country to another.

What’s more, individual Americans demonstrated a generous spirit of benevolence and voluntary effort to assist those who had fallen upon hard times, as well as to deal with a wide variety of common community services in their cities, towns, and villages.

Those foreign observers of American life noted that no man bowed to another because of the hereditary accident of birth. Each man viewed himself as good as any other, to be judged on the basis of his talents and abilities as well as his character and conduct as an individual human being.

Even the scar of slavery that blemished the American landscape through more than half of the 19th century stood out as something inherently inconsistent and untrue to the vision and conception of a society of free men laid down by the Founding Fathers. The logic of liberty meant that slavery would eventually have to end, in one way or another, if the claim of freedom for all was not to remain confronted with a cruel hypocrisy to the ideal.

A Land of Free, Self-Made Citizens

What a glorious country this America was. Here was a land of free men who were able to pursue their dreams and fulfill their peaceful desires. They were free men who could put their own labor to work, acquire property, accumulate wealth, and fashion their own lives. They associated on the basis of freedom of exchange, and benefited each other by trading their talents through a network of division of labor that was kept in order through the competitive processes of market-guided supply and demand.

In this competitive marketplace, the creative entrepreneurial spirit was set free. Every American was at liberty to try his hand, if he chose, to start his own business and devise innovative ways to offer new and better products to others in the market, through which he hoped to earn his living. No man was bond to the soil upon which he was born or tied to an occupation or profession inherited from his ancestors. Every individual had an opportunity to be the master of his own fate, with the freedom to move where inclination led him and choose the work that seemed most profitable and attractive.

The Turn Toward Collectivism

Then something began to happen in America. The socialist and collectivist ideas that were growing in influence in Europe during the last decades of the 19th century began to spread over to the United States. Two generations of young American scholars went off to study in Europe, particularly in Imperial Germany, in the 1880s, 1890s, and early 1900s. They became imbued with socialist and state paternalistic conceptions, especially the interventionist and welfare statist ideas that were being taught at the universities in Bismarck’s Germany.

These scholars came back to the United States enthusiastic about their newly learned ideas, convinced that the “negative” idea of freedom dominant in America – an idea of freedom that argued that government’s role was only to secure each person in his individual right to life, liberty, and property – needed to be replaced by a more “positive” notion of freedom.

Government should not merely protect citizens from violence and fraud. It should guarantee their health care and retirement pensions; it should regulate their industry and trade, including their wages and conditions of work. The government needed to secure the members of society from all the uncertainties of life, “from cradle to grave” – a phrase that was first popularized during this time.

These European-trained students and academics soon filled the teaching positions in the colleges and universities around the country; they occupied a growing number of jobs in the federal and state bureaucracies; they became the fashionable and “progressive” forward- looking authors of books and magazine articles; they came to dominate the culture of ideas in America.

The Rationale of Relativist Change

How did they sway an increasing number of Americans? They asked people to look around them and observe the radical changes in technologies and styles of life. They pointed to the rapid shift from the countryside to growing urban areas. And they asked, how could such a transformed and transforming society remain wedded to the ideas of men who had lived so long ago, in the 18th century? How could a great and growing country be tied down to a Constitution written for a bygone era?

The Constitution, these “progressives” argued, had to reflect the changing times – it had to be a “living” and “evolving” document. Progress, for these proselytizers of Prussian paternalism, required a new political elite who would guide and lead the nation into a more collectivist future.

The Fruits of Collectivism in America

The fruits of their work are, now, after well over a century, all around us. At the beginning of the 20th century all levels of government in the United States took in taxes around 8 percent of the people’s wealth and income. Now all levels of government extract in many cases over fifty percent of our earnings, in one way or another.

One hundred years ago, government hardly regulated and controlled any of the personal and commercial affairs of the American citizenry. Now, government’s hand intrudes into every corner of our private, business, and social affairs. Indeed, it is hard to find one area of our daily lives that does not pass through the interventionist sieve of state management, oversight, restriction, and command.

Perhaps worst of all, too many of our fellow Americans have become accustomed to and, indeed, demanding of government protection or subsidy of their personal and economic affairs. We are increasingly no longer free, self-supporting individuals who solely make our own ways through the peaceful transactions and exchanges of the marketplace.

We have become collective “interest groups” who lobby and pressure those in political office for favors and privileges at the expense of our neighbors. And the political officeholders are only too happy to grant these political gifts to those who supply campaign contributions and votes as the avenue to their own desires for power and control over those whom they claim to serve.

It is sometimes said, “But we are still the freest country in the world. Our wealth and standard of living are the envy of tens of millions all around the globe. We should be proud of what and who we are.”

The Standard for Judging America

Our present greatness in terms of these things, however, is only relative to how much farther other countries have gone down the path of government paternalism and regulation during these past one hundred years.

The benchmark of comparison should not be America in relation to other countries in the contemporary world. The standard by which we should judge our freedom should be how much freer the American people were from the stranglehold of government more than one hundred years ago, before those proselytizers of paternalism began to change the political and cultural character of the United States.

By this standard, today’s American people are extremely unfree in many aspects of their life. Of course, there have been important, valuable and even essential economic, social and cultural improvements for many individuals and groups in American society, who one hundred years ago still suffered from various degrees of racial, social or ethic bigotry and politically enforced discrimination. Many of these wrongs are now gone, or at least far less than in that earlier time.

But the fact remains that over many areas of our personal, social and especially economic activities we have all become increasingly wards of the state. And like the convict who has spent so many years in prison that he is afraid of being released and no longer having his jail keepers to tell him what to do and how to live, we are fearful of even the thought of a life without government caring for us, protecting us, subsidizing us, guiding us, and educating us.

Loss of Understanding Liberty

Too many in the older generation in America have lost their understanding of what freedom means and why constitutionally limited government is both necessary and desirable. And the vast majority of the young have never been taught in our government-run schools the ideas, ideals, and political institutional foundations upon which this country of ours was created. They have been taught to think that there are no absolute truths or any important insights from long human experience concerning why individual freedom is a valuable and precious thing.

What those earlier German-trained political and cultural relativists set out to do in America at the beginning of the 20th century has been to a great extent accomplished. We are threatened with becoming a people who have no sense of an invariant nature of man, and who possess no idea of those values and attitudes in the human character so necessary for preserving freedom and prosperity.

Most especially, there has been lost among too many any understanding or appreciation of the concept of individual rights, without which a free society is not sustainable in the long run. The collectivist mind-sets of our time have weakened the most fundamental concept underlying the idea of individual rights:

That the individual has a right to live for himself, guided by his own reasoning and judgment, and that he should not be considered and treated as a physical or financial beast of burden expected to sacrifice his life and its potentials for a tribe, whether it is called “the nation,” the “social class,” the “race,” the “democratic majority,” or “mankind.”

Individual Rights are Changeless in a Changing World

The Founding Fathers were not unaware that “times change.” But in the whirlwind of life they saw that reason and experience could and had demonstrated that there were unchanging qualities to the human condition, grounded in the fundamental political idea of individual rights.

They understood the various mantles that tyranny could take on – including the cloak of false benevolence in the form of compulsory redistribution of wealth. They established a constitutional order that was meant to guard us from the plunder of violent and greedy men, while leaving each of us that wide latitude of personal and economic freedom in which we could find our own meanings for life, and adapt to new circumstances consistent with our conscience and concerns.

This is what made America great. This is what made a country in which individuals could say without embarrassment or conceit that they were “proud to be Americans.”

The task for those of us who have not yet lost that true sense of the meaning of freedom is to dedicate ourselves to restoring and refining that noble American ideal of individual rights and liberty. Let us work together to be the stewards of liberty so that freedom may, once again, rekindle its consistent and bright torch in the America of the 21st century.

[Originally published at EpicTimes]

Categories: On the Blog

EPA’s Phony “Environmental Justice” Caper

September 08, 2014, 10:06 AM

The agency’s real agenda: empire, control, and inverted justice for poor and minority families

When it comes to energy, climate change, justice and transparency, the Obama Administration and its Environmental Protection Agency want it every possible way. Their only consistency is their double standards and their determination to slash hydrocarbon use, ensure that electricity prices “necessarily skyrocket,” expand federal government command and control, and “fundamentally transform” America.

The president was thus eager to give away Seal Team secrets in bragging about “he” got Osama bin Laden. But in sharp contrast, there has been no transparency on Benghazi, Fast and Furious, the IRS scandal – or the data and analyses that supposedly support Environmental Protection Agency claims that “dangerous manmade climate change” is “not just a future threat; it is happening right now.”

That rhetoric made it sound like EPA’s Clean Power Plan was designed to reduce greenhouse gas emissions. However, in July EPA Administrator Gina McCarthy made it clear that her initiative “is not about pollution control.” Rather, it is an “investment strategy” designed to spur renewable energy.

Senator Jeff Sessions (R-AL) opined that the agency does not have “explicit statutory authority” to steer investments toward “green” energy. Perhaps so, McCarthy replied, but her actions are legal under the Clean Air Act and within the agency’s ever broadening purview – as are EPA’s attempts to expand its mission and oversight authority by emphasizing “sustainable development” and “environmental justice.”

The ironies abound. Wind, solar and ethanol power were intended to address “imminent oil and gas depletion” that ended with the hydraulic fracturing revolution, and prevent “global warming” that ended some 18 years ago. Now “investment” in these “alternative” energy technologies primarily involves greenback dollars taken from hard-working taxpayers and delivered to crony corporatists and campaign contributors who want to earn fat profits from climate scares, renewable energy mandates and subsidies.

A 2010 report suggested that EPA should begin to examine how it might “encourage the development of sustainable communities, biodiversity protection, clean energy, environmentally sustainable economic development and climate change.” Talk about an open-ended invitation to control our lives. A few weeks ago, EPA proclaimed “environmental justice” as yet another newcause celebre. The agency claims low-income groups are “disproportionately affected” by airborne pollution, and therefore it must tighten air quality standards yet again. The results will likely be a perverse opposite of true justice.

The agency’s own Urban Air Toxics report chronicles a 66% reduction in benzene levels, 84% in outdoor airborne lead, 84% in mercury from coal-fueled power plants, and huge reductions in particulates (soot). “But we know our work is not done yet,” McCarthy said. “At the core of EPA’s mission is the pursuit of environmental justice – striving for clean air, water and healthy land for every American; and we are committed to reducing remaining pollution, especially in low-income neighborhoods.”

Most air quality and health experts say America’s air is completely safe. That’s why EPA pays its Clean Air Scientific Advisory Committee and the American Lung Association millions of dollars a year to say otherwise. It’s why the EPA, CASAC and ALA refuse to discuss the $353 billion in annual regulatory compliance costs that EPA alone imposes on U.S. businesses and families (out of a total federal regulatory bill of $1.9 trillion), according to Competitive Enterprise Institute studies.

Those costs mean too many people lose their jobs. Their hopes, dreams, pride and work ethic are replaced by despair and dependency. If they can find new work, they are forced to work multiple jobs, commute longer distances, and spend greater portions of their incomes on gasoline and electricity. They suffer greater sleep deprivation, stress, depression, drug and alcohol abuse, spousal and child abuse, and poorer nutrition and medical care. More people have strokes and heart attacks; more die prematurely.

EPA’s new 54.5-mile-per-gallon standards mean cars are lighter and less safe in accidents. That means more people suffer severe injuries or get killed. Minority and other poor families are especially at risk.

Every one of these impacts is also a matter of environmental justice. But EPA chooses to ignore them.

Moreover, nothing in the law says EPA has a right to declare that it intends to seek “justice” by drawing a line between poor people and other Americans, all of whom have a stake in clean air. McCarthy’s language is more befitting a rabble-rouser than an agency administrator who is supposed make decisions based on science – not on emotions, politics, or racial and class divisiveness.

EPA’s climate and environmental policies appear destined to become even more insane. Just two months after calling climate change “the world’s most fearsome weapon of mass destruction” – and amid radical Islamist chaos and conflagrations across the Arab world – on September 3, Secretary of State John Kerry actually said “Muslim-majority countries are among the most vulnerable” to climate change. “Scriptures,” he claimed, make it clear that Americans have a “responsibility” to prevent this calamity.

McCarthy’s environmental justice claims also appear to be based on an ugly premise that undergirds many Obama Administration policies: that low-income people are victims and businesspeople are guilty of doing irreparable harm to their health and communities. (At least business people who are not aligned with Obama and don’t support liberal/Democrat agendas and candidates are guilty.)

Such sentiments pit low-income and working-class Americans against businesses. They are a divisive throwback to the 99% versus 1% protests. They ignore the fact that Mr. Kerry, climate politics bankroller Tom Steyer, and President Obama and his fundraiser dinner companions are all part of the 0.1 percent.

These sentiments also ignore the fact that businesspeople create jobs, give workers opportunities to earn a living for themselves and their families, and develop the employment and life skills to successfully climb the socio-economic ladder. Any company that violates environmental, health, safety, tax and other laws is penalized civilly or criminally – whereas all too often the regulators themselves escape any accountability or liability for accidental, incompetent and even deliberate actions that hurt their fellow citizens.

Ms. McCarthy’s statements also reflect the lengths to which EPA will go to continue expanding its reach and grow its bureaucracy. The agency cannot admit that it has nearly won the battle against dirty air, because thousands of government regulators could lose their jobs. (Never mind the millions of Americans who lose their jobs because of EPA regulators and regulations.) To protect its legions of workers, justify its massive taxpayer-provided budget, and expand it many times over, EPA continues to move the goal posts, by invoking environmental justice, climate change and sustainability – for which there can never be objective goals and achievements, but only political considerations and subjective “feelings.”

Apparently Ms. McCarthy embraces the ideology that ignores the benefits of affordable energy and of a robust economy that creates jobs and opportunities. In her view, government controls are paramount, even when they stifle self-reliance, creativity and entrepreneurship, destroy jobs, harm human health and welfare, and cast low-income Americans as perpetual victims.

As Congress of Racial Equality national chairman Roy Innis emphasizes in his book, Energy Keepers / Energy Killers: The new civil rights battle: access to abundant, reliable, affordable energy is essential for individuals, families and communities that want to improve their lives and living standards.

Jason Riley puts it just as forcefully in his new book, Please Stop Helping Us: How liberals make it harder for blacks to succeed. Blacks must “develop the habits and attitudes that other groups had to develop” to improve their lives, he writes. The real secret to rolling back black unemployment and poverty is to change a culture that has allowed too many black children to grow up without the benefit of a father in the home, and that scorns black intellectual achievement as “acting white.”

Environmental protection should never be an “us vs. them” mentality. Such attitudes divide us, rather than bringing us together to improve our nation and world for everyone’s benefit. Ms. McCarthy should base environmental policy on sound science – and check her phony justice rhetoric at the door.

Categories: On the Blog

Time to Stop Worrying About GMOs

September 07, 2014, 2:36 PM

The organic food movement grows every year. Many people are attracted to its acclaimed health benefits and superior produce compared to more ordinary foods. Organically grown food is particularly favored over genetically modified foods (GMOs). Indeed, it is hard to find an upscale restaurant or grocery store that does not loudly proclaim its non-GMO status.

Yet, is there any real health benefit to organic and non-GMO foods? The answer (perhaps shockingly to foodies,) is no. The media and internet have been alive for years with the supposed horrific side effects of eating GMOs, with so-called experts claiming that they cause all kinds of disease, including cancer. But these “experts” rarely, if ever, have any data to back up their claims. In fact, the one major study that offered some credible evidence of negative health effects from GMOs was ultimately discreditedand has since been retracted.

If there is so little serious evidence of the negative side effects of GMOs, why is there so much news about it? The answer is simple: there is profit to be made. The individuals marketing organic and non-GMO items have a real financial incentive to keep the fear alive. Without it, their whole business collapses. Not many people would pay extra for food that offers no meaningful health benefits. A study by the Food Standards Agency of the United Kingdom has demonstrated this fact, showing that there is no meaningful health benefit accrued from the additional cost of organically grown food.

This is not to say that organic food promoters are charlatans, or in any way dishonest. No doubt the vast majority of them believe in what they are selling as much as consumers believe in what they are buying: better, healthier food. But good intentions are wasted when the actions rising from them do no good.

The problem really isn’t that people like to eat organic or non-GMO products. In the developed world, many people can easily afford such luxuries. The real problem is when unjustified prejudices toward GMOs spread into the public sphere and cause real harm in places where they are needed. In Africa and parts of Asia, food is a scarce resource. We have seven billion people on this planet, most of whom live in poverty. For many, GMOs are not a matter of choice, but of necessity. In India, a genetically modified strain of wheat called dwarf wheat, (which allowed for much higher crop yields) prevented a massive food crisis that would have killed millions of people. Another grain, golden wheat, has been enriched with nutrients that have reduced child mortality and improved public health in numerous countries.

When people in America start scares about GMOs, it does more than change what people buy. It can cost lives. A few African countries, responding to hysterical claims by faux experts, have banned GMOs. The result has been needless death and deprivation.

A court ruling this month in Hawaii has overturned a ban on GMO research passed earlier this year. This is a positive step, but it has done little to alter public perceptions about GMOs. That will require a much more concentrated push on the part of the agriculture industry and public health officials. More must be done to dispel irrational and erroneous beliefs.

It is easy to understand why people are susceptible to scares about GMOs. It is strange and Frankensteinesque for scientists to manipulate the genetic code of the things we eat. Of course we should be mindful of what we put in our bodies. But we should also be aware of (and act in accord with) the evidence, and the evidence continuously shows no meaningful harm from GMOs.

So don’t be too concerned about buying organic. It’s no better for the health of your body and whole lot worse for the health of your bank account!

 

[Originally published at IOnTheScene]

 

Categories: On the Blog

Joan Rivers, R.I.P.

September 06, 2014, 11:52 PM

Comedienne Joan Rivers has passed away last week at the age of 81, shortly after going into cardiac and respiratory arrest during a procedure on her throat. The evening before the terrible event, Ms. Rivers joked about her age and that she could die “at any second.” State health officials are investigating the clinic at which the procedure took place.

Joan Rivers was basically “discovered” by Johnny Carson and was a frequent guest and guest-host of the Tonight Show in the early 1980s.

Recently, Ms. Rivers, never a stranger to controversy, made a bit of news when suggesting that Barack Obama was America’s first gay president and calling Michelle Obama a “tranny.” In typical Rivers style, no apology was forthcoming for the not-particularly-humorous comment.

OK, not every joke hits its target, but for decades of sometimes-shocking entertainment and breaking the glass ceiling for female comedians, Joan Rivers deserves our appreciation.

Our thoughts are with her family and friends.

[First published at the American Spectator.]

[Editor: Here's a bit of Joan from Jimmy Fallon's first day hosting the Tonight Show. Let's just say that having Joan on that night was no accident]:

 

Categories: On the Blog

Quoth the Reagan, Nevermore

September 04, 2014, 2:41 PM

Newt Gingrich’s recent article on CNN asks “What Would Reagan Do About ISIS?” Writing a “speech” from the perspective of Ronald Reagan as if he was still president, Gingrich seeks to show a more assertive, commanding response to the massive unrest in Iraq and Syria. The relative merits of Gingrich’s Reagan’s speech are not worth all that much consideration (In a nutshell, it calls for swift action against the militants, and generally damns the present policy). What is of interest is the strange phenomenon the article reveals about a large section of the American right wing today: dogmatic Ronald Reagan worship.

Don’t get me wrong; I am a big fan of Reagan and I believe he led America as well as anyone could from a time of fearful uncertainty into one of triumphal prosperity. But he was not a god and he did not have the right answer every time on every issue in his own time. It is really strange that conservative commentators trot out the “What would Reagan do?” line so regularly. Sure, we can reflect on the qualities of a president and the character they reveal through their actions. We can express our desires for more forceful and decisive leadership in the mold of Reagan. But to ask his opinion on how to address ISIS? That is a bit of a stretch.

Reagan left the White House in 1989, 25 years. That is a long time for things to change. The world is a radically different place from the one in which Reagan lived and governed. His whole political career was spent as a Cold Warrior. No doubt a man of his skills and leadership quality could make a mark on any era, but to try to envision his exact strategy, or even his general feelings, on specific issues facing us now is not particularly nourishing to intellect or beneficial to the formulation of policy.

This tendency to call up the ghost of Ronald Reagan at the drop of a hat has become a running joke in the liberal media. And if you think about it, it is rather funny. It is, after all, tough to make the case to the public that you have new solutions when you keep dredging up the image of a man who has not governed in two and half decades (and been dead for ten of those years). And that is a really serious problem facing the political right.

When Reagan rose to prominence and won the presidency, he did so by looking forward. He inspired people to believe in a future for America that was bright. He called on many of the timeless words and principles of the American political canon, but he was at his heart an independent animal. He never tried to be a mouthpiece for a preceding generation’s standard-bearer. Reagan’s message was his own, and that is why it resonated so thoroughly with the public.

Trying to be the heir to Reagan’s political legacy, as so many Republican contenders seem to be doing, misses the whole point of what made Reagan special. If the timeless message of individual liberty, of which Reagan was a true champion, is to be carried to another generation, it needs a new voice, not just an echo of an old one.

Categories: On the Blog

Shut Down MITFA and Demand ITFA Before November 1st, 2014

September 03, 2014, 10:10 AM

public domain

Most of Congress agrees that the Internet access tax ban should continue, at least for now; even the House passed the Internet Tax Freedom Act (ITFA) with merely a voice vote. It seems like it would be almost unanimous in the Senate, too, but one hot topic attached to access taxes is causing controversy: the Internet sales tax. The four-page ITFA bill also contains a provision that protects against discriminatory taxes on electronic commerce. While brick-and-mortar stores have a definitive sales tax they pay based on where they’re located, e-retailers do not. Without sales tax protection, e-retailers could have to pay up to 9,600 different state and local taxing bodies, an administrative expense that the average small business owner could not handle (24 million Americans, where 29% make less than $10,000/year in sales). On top of that, if a taxing body charges the wrong tax or makes a mistake and an e-retailer needs to take legal action, they would incur further costs for lawyers and litigation that would diminish the incentive to sell anything online in the first place.

A group of senators is planning to hold Internet access taxes hostage (the ban expires November 1st, 2014) in an attempt to force the Internet sales tax question. They created their own version of an Internet tax freedom act, but with many perversions that cater to the retail industry giants who could easily soak up the administrative costs and send their armies of lawyers to court for them. This new fourteen-page bill, the Marketplace and Internet Tax Freedom Act (MITFA), only extends the Internet access tax ban by 10 years instead of permanently, and it would open up the 9,600 different state and local tax collecting agencies—many of whom are in debt—to enforcing burdensome regulation and taxation on e-retailers.

Imagine someone who makes homemade trinkets and sells them online, perhaps something they started doing while on unemployment or just as a hobby. If they get orders from many people across the country, they would have to calculate each tax rate in each location of each customer. What if they fail to do so? Many state and local authorities charge high fines if a seller does not pay sales taxes, and you can even go to jail. Suppose they find a charge that shouldn’t be there, but the taxing body disputes it. Where would this person find the money to fight the legal battle this would cause? They might just settle, even if they were never in the wrong. This is what the legal language of the current law banning Internet sales tax means by discrimination.

There is even legal precedent set by the SCOTUS in the case Quill Corp. vs. North Dakota. In this case, North Dakota was trying to make Quill Corp., an office supplier based out of Delaware, pay taxes for advertising and selling its products in the state. The Supreme Court ruled that a business has to have a physical presence in a state in order to be subjected to its sales taxes. In 1992, Justice Stevens delivered the opinion of the Court in which he said “…because the State had not shown that it had spent tax revenues for the benefit of the mail order business, there was no ‘nexus to allow the state to define retailer in the manner it chose.’”

Quill has three warehouses in three separate states, so it is paying sales taxes in those states that it runs its operations out of. States that foster poor business conditions should not be allowed to tax businesses in other states just because customers order items from them online. This would defeat basic competition between states and would be unfair to states that are responsible. States that have ruined their economies can’t be allowed to suck out money from successful companies in other states whose business conditions are better. Some states don’t even have general sales taxes, and their companies would be forced to pay an extra expense that they never needed to before.

E-retailers are not dodging taxes because they do have a physical location somewhere. If anything, banning Internet sales taxes would force states to rethink their economic policy. Challenges and tough times can often spark amazing motivation for real growth and change. Opening another source of revenue for states that have proven time and again mismanagement of funds would be a disaster for everyone involved. Successful companies that have harnessed the equalizing powers of technology would be penalized, and American consumers would be left with less choice and less in their wallets.

The ITFA bill that has passed the House is now in the Senate’s hands; the bill is concise at only four pages, and most people would be able to easily understand it. It would permanently ban Internet access taxes and multiple and discriminatory taxes on electronic commerce. The proposed MIFTA bill, masquerading as a better alternative, would only ban access taxes for 10 years, but allow almost 10,000 tax collecting agencies a chance at a massive money grab, convoluting competition and reducing economic freedom. Contact your senators today and tell them to take up a vote on IFTA, not MIFTA, before November 1st. We only have 59 days left.

Categories: On the Blog

Will Europe Pull Its Weight on Defense?

September 02, 2014, 6:10 PM

The ongoing conflict in Ukraine has laid bare the woeful state of European defense. For decades  Europe has been reliant on an American security blanket, one that has put Europe’s various defense departments to sleep. Putin’s recent belligerence has given them a loud wake-up call. What they will do about the aggression on their frontier remains to be seen.

Hopefully, Europe’s leaders will finally begin to pull their weight on providing for their own defense and fro the maintenance of NATO. Currently America makes up the lion’s share of NATO forces and spends a vastly disproportionate amount of its GDP on the task. The United Kingdom is the only major EU power that spends more than 2 percent of its GDP on defense. The rest have seemed happy to spend their cash on unaffordable social programs in the hope that America will always be there to protect them.

It’s about time that America made a stand on defense spending in Europe. It is ludicrous to expect the United States to spend more on defending Europe than the Europeans are willing to. Now that Putin has increased his warmongering, many of Europe’s leaders have finally started to agree. While it is still far too early to declare that Europe is definitely going to shoulder the task of ensuring its own security, we are now seeing positive steps, taken through the NATO alliance, to meaningfully increase the share of Europe’s burden on the maintenance of its defense. Member countries in Europe have agreed to increase their defense spending to more adequately address security concerns.

This is a good sign for America. We have spent a vast fortune trying to maintain peace and security in the world, to mixed success. We cannot afford to be the sole guarantor of international order forever. What we need is other responsible, democratic nations to shoulder a larger part of that burden. It will benefit the US taxpayer and add legitimacy to a global order that favors free markets and the rule of law. Europe, America’s partner in liberal-democratic values, must be ready to share in the effort of sustaining peace on its borders, and in the world.

Categories: On the Blog

How Repealing And Replacing Obamacare Would Help Restore Booming Economic Growth

September 02, 2014, 7:01 AM

One of the biggest drags on economic growth under President Obama has been Obamacare, enacted on a strictly partisan basis in 2010. That drag has come primarily from the sweeping overregulation of Obamacare.

The biggest culprit has been the employer mandate, which requires all employers of 50 or more full time workers to buy them health insurance with the terms and benefits as specified by the federal government. That is effectively a tax on employment of well over $10,000 a year per worker for family coverage.

Even for employers that already provide health insurance, the employer mandate will likely be a big tax increase on employment.  That is because the mandated health insurance will most likely cost more than what the employer is already providing. That results first because the government responds to political pressure to require generous benefits most people will think the employer is paying for, to be include in the mandated health insurance. That drives up the cost of the mandatory health insurance.

Secondly, the mandated health insurance is subjected to costly overregulation involving guaranteed issue and community rating. Guaranteed issue requires insurers to sell their health insurance to everyone that applies, regardless of how sick and costly they are when they first apply, such as those who already have cancer or heart disease. That is like requiring fire insurance companies to sell their fire insurance to buyers who call up after their house has already caught on fire.

Community rating requires health insurers to sell that insurance at the same standard rates as for everyone else, regardless of how sick and costly the buyers are when they first apply for the insurance.   That is like requiring fire insurers to sell fire insurance at the same standard rates as for anyone else, to buyers after their houses have already caught on fire.

Of course, the standard rates for such fire insurance are going to be very high. The same will be true for health insurance subject to such regulation. There are better, far less costly ways of assuring that health insurance is available to everyone, including those with costly preconditions.

This employer mandate employment tax is reducing job and wage growth. Moreover, to further avoid that costly tax on employment, millions of workers across the country have been reduced to part time work of 29 hours a week or less, because the definition of a full time worker in the Obamacare legislation is 30 hours a week or more. That is driving down the net wages and incomes of middle class and working people, and increasing inequality as a result. Small companies around the 50 worker threshold are also restraining growth and employment for the same reasons. All of this has been killing economic growth, stunting the recovery, and greatly extending the misery of the recession well beyond previous recessions.

The individual mandate is increasing costs of health insurance in the individual health insurance market as well, for the same reasons. President Obama was quick to claim credit for Obamacare for supposedly restraining the growth of health costs. But that health cost slowdown he cited actually started back in 2003, when Health Savings Accounts (HSAs) were adopted by the then GOP Congress, as I will explain below. Barack Obama was an Illinois State Senator back then, and Obamacare was just a gleam in his eye.

So both the employer mandate and the individual mandate are effective tax increases, which are a drag on economic growth. Obamacare is financed by another half trillion in tax increases, which are also anti-growth.

How to Repeal and Replace Obamacare

But Obamacare can be replaced by free market, Patient Power, health care reforms based on sharply expanding patient power, control and choice over their own health care, which would assure health care for all (unlike Obamacare), with no employer mandate, no individual mandate, and sharply reduced taxes, federal spending and regulation. That would reverse the above anti-growth effects of Obamacare, and contribute to booming economic growth and recovery. Such Patient Power reforms have long been advocated by John Goodman, long time President of the National Center for Policy Analysis in Dallas.

The centerpiece of such Patient Power reforms would be to extend the same tax preference for employer provided health insurance to everyone, in the form of a refundable, universal, health insurance tax credit for all of roughly $2,500 per year ($8,000 for family coverage) for the purchase of private health insurance. The credit would not be meant to pay for the entire cost of such insurance, but only to help pay for it, just as the tax preference for employer provided insurance does not pay the entire cost of such insurance, but only helps pay for it.

There would be no government mandate of any sort to use the credit to buy any particular insurance with any particular terms or benefits. Each worker would be free to use the credit to buy the health insurance of the worker’s own choice, such as Health Savings Accounts (HSAs), discussed further below.

Workers would even be free to choose to use the credit to buy into coverage through Medicaid if they desired. The credit amount is equal to the CBO estimated average cost of adding one additional person to Medicaid coverage. This one feature assures coverage for all those with any pre-existing condition, because they could always choose Medicaid coverage, which includes anyone regardless of any pre-existing condition. But few would be expected to choose Medicaid, because of the fundamental problems of Medicaid as discussed below. Indeed, people would also be free to choose to use the credit to leave Medicaid for the purchase of any private health insurance of their choice, including HSAs.

The $2,500 credit would effectively operate as a reverse penalty in terms of lost opportunity cost for failing to use it. The taxpayer would effectively then leave $2,500 on the table in terms of his personal finances.

But socially, the amount of any unused credits would be sent to local safety net hospitals and clinics serving the poor in the local area. For example, if 1000 people in Dallas did not use the credit to buy any health insurance, $2,500,000 would be sent to safety net hospitals and clinics in Dallas specializing in serving the poor.

The second component of the Patient Power reforms would be to transfer control over Medicaid to the states, with the federal financing of the program provided through fixed, finite, block grants to each state, as under the enormously successful 1996 welfare reforms of the old, New Deal, Aid to Families with Dependent Children (AFDC) program. Currently, the federal financing for Medicaid is provided under a matching federal financing formula, paying more to each state the more the state spends on Medicaid. That is like the federal government paying the states to spend more on Medicaid.

Under the fixed, finite, block grant formula, the state knows that if its redesigned, state, Medicaid program costs more, it is going to pay 100% of the difference. But if the program costs less, it would keep 100% of the savings. These are ideal incentives for each state to weigh the costs against the benefits for Medicaid spending, and only pursue the spending that was worthwhile.

Preferably, each state would use its power under the Medicaid block grants to provide assistance to the poor through health insurance vouchers that could be used by the poor to supplement the universal health insurance tax credit to help the beneficiary to purchase the private health insurance of his or her choice, including HSAs. The voters of each state would then be free to determine how much assistance at what income levels would be necessary to assure that the state’s poor could buy essential health insurance, which would be very different for Mississippi and Louisiana than for New York and California, given their widely varying health cost structures, and income distributions.

Such Medicaid reform would be enormously beneficial for the poor. Medicaid currently pays so little to the doctors and hospitals to provide essential health care to the poor that they often face grave difficulties in finding timely, essential health care under the program. But with private health insurance purchased with the help of the universal health insurance tax credit, supplemented for the poor with Medicaid health insurance vouchers, the poor would enjoy the same health care as the middle class, because they would have the same health insurance as the middle class, which is forced by competitive market pressures to pay enough to the doctors and hospitals to ensure that those covered by the insurance can get timely, essential health care. This would mean an enormous gain for the poor as compared to the current Medicaid program.

As another safety net component of the Obamacare replacement plan, states would also be free to use a limited part of the Medicaid block grant funds to set up Uninsurable Risk Pools for those uninsured who had contracted costly preexisting conditions such as cancer or heart disease while uninsured. Any uninsured who could not obtain health insurance in the market for this reason would be able to obtain full coverage from the Uninsurable Risk Pool for an affordable fee based on the applicant’s ability to pay, which is necessary for the pool to serve as a safety net program. State taxpayers and part of the Medicaid block grant funds would subsidize the pool to cover all costs not covered by the fees charged to those covered by the pool.

Over 30 states have set up similar Uninsurable Risk Pools, and they have proven by experience to be a low cost means of covering those who could not obtain coverage in the market because of costly pre-existing conditions. That is because only a very small percentage of the population ever becomes truly uninsurable in the private market.

These reforms would assure universal health care for all. Everyone would have the universal health insurance tax credit, the poor would receive additional assistance to purchase private coverage, and everyone would continue to be backed up by Medicaid and the Uninsurable Risk Pools as safety nets. By contrast, Obamacare fails to achieve universal coverage, as CBO projects that even after 10 years, Obamacare would still leave 30 million Americans uninsured, and without any assured access to health care.

Health Savings Accounts

The health cost control functions of Obamacare would also be achieved far more effectively through HSAs and market competition. With an HSA, instead of all the money going to an insurance company, the insured pays only enough to purchase coverage with a high deductible, around the range of $5,000 to $6,000 a year or more. The health insurance then pays for all health care costs above that annual deductible.

The substantial cost savings from purchasing such high deductible insurance is then saved in the HSA to pay for health costs below the deductible. Whatever is not spent from the HSA can be withdrawn after a year and spent on anything, or saved tax free for health care in future years, and for retirement. Consequently, whatever the worker spends on health care from his HSA is effectively his own money.

That will leave him with full market incentives to control costs. He will question what health care is necessary, seek second opinions, and explore less costly alternatives. Moreover, since the patients now have full market incentives to control costs, doctors and hospitals will compete to control costs, the more patients in the marketplace have HSAs.

These HSA incentives have proven very effective in controlling costs in the real world. The Republican Congress passed modern HSAs in 2003. Since then, HSA coverage has been exploding, doubling year after year. Today, 30 million Americans have HSAs. And the slowdown in the growth of health costs first buds after HSAs were passed, and builds along with that growth in HSA coverage.

These HSAs are the classic Patient Power reform, because the patient has maximum power, choice and control over the HSA funds. The Patient Power alternative to Obamacare would expand the HSA option throughout the entire health care system. Workers even with employer provided coverage could use the universal health insurance tax credit to purchase preferred health insurance of their choice, which would include HSAs. This gives workers a market check on the power of employers over their health insurance, as the incentive of employers is to choose the coverage that works best for them rather than their employees. The universal credit could also be used to opt out of Medicaid for HSAs.

Also under the Medicaid block grants, the poor could use the health insurance vouchers to purchase HSAs if they prefer. Retirees should also be assured of the freedom to choose HSAs under Medicare Part C. Through these reforms, virtually everyone would enjoy the freedom to choose HSAs if they prefer. That, and the market competition between the alternative choices among the different insurers in all these markets would restrain the growth in health costs far more effectively than Obamacare, which only works to increase health costs.

Booming Economic Growth Through Health Care Reform

Repealing and replacing Obamacare with the above Patient Power reforms would further contribute to booming economic growth, in addition to previous reforms I have advocated in recent weeks in this column. Repealing Obamacare would automatically involve a tax cut of 16% in the capital gains tax, and in the taxation of corporate dividends. That would promote the capital investment that creates jobs and increases wages. It would also cut the top rate of the Medicare payroll tax by roughly one fourth, which would also create jobs and increase wages.

It would also end the effective taxation involved in the employer mandate and the individual mandate, again increasing jobs and wages. The millions of Americans now reduced to part time work would be liberated to find full time jobs again, restoring millions of middle class incomes. The restrained growth of health costs would also liberate businesses to invest more in job creation, and directly increase wages. That would result both from repealing the cost increasing effects of Obamacare, as well as from the cost restraining features of the replacement reforms.

[First published at Forbes.]

Categories: On the Blog

Ten Things Homeschoolers Think During Back To School Season

September 02, 2014, 12:20 AM

An anthropological look at this curious, intelligent, frededom-loving tribe.

1. But I’m not even done with last year’s math book!

Don’t worry. Public schoolers aren’t, either. And their books are four grades behind. 2. Like my back-to-school outfit?

3. Mom bought way too many school supplies to compensate for “not being a real teacher.”

You don’t need to compensate, mom. Research shows homeschoolers whose parents have just a high school diploma still do better than the average public schooler. 4. And the four-pack of pianos.

5. School? What school?

6. Goodbye, friends. See you next summer.

7. Here’s my school uniform, same as the summer uniform.

We know homeschoolers don’t ever work in pajamas. Just like telecommuters. 8. Ya’ll enjoy school. I’ll over here making robots, real log cabins, and probiotic-filled food. And playing Settlers of Catan.

9. Can I get a science credit for watching a home birth?

10. Maybe it’s time to get a bigger bus.

Photo By: Allan Henderson Photo By: Eric Gelinas Photo By: tony puyol Photo By: dr_tr Photo By: David Goodman Photo By: Ingo Bernhardt Photo By: Liz Photo By: M 93 Photo By: anthony kelly Photo By: ShelahD [First published at The Federalist.]
Categories: On the Blog

An Anti-Cronyism Solution to Dodd-Frank

August 31, 2014, 9:00 AM

The Financial Stability Oversight Council (FSOC), the unelected oversight group created by the Dodd-Frank Act to monitor and regulate firms deemed to pose systemic risk to the economy (ie. “too big too fail”), has decided begun to expand its remit beyond what even the law’s authors had imagined.

Conceived as a means of circumscribing the actions of the large financial institutions whose failures could crater the economy, the FSOC is now sticking its label on any financial services firm they can get away with. This week they finished their investigation of MetLife, an insurer. Even though MetLife poses no systemic risk to the economy by any empirical measurement, it is likely to be enveloped by the grubby hands of FSOC anyway.

The MetLife episode demonstrates the huge difficulties in administering an extremely complex regulatory mechanism. Rather than looking for actual systemic risks, FSOC just wants to control as much of the economy as it can. Barney Frank has feigned surprise at this turn of events and has apparently said he never envisioned such a wide scope for FSOC. Well, Mr. Frank, this is what happens when you hand a huge amount of nonspecific powers to a virtually unaccountable organization.

The whole idea behind Dodd-Frank is wrongheaded. It relies on the idea that systemic risks can be accurately calculated before a financial shock is experienced. The solution it prescribes is more red tape for the financial services industry to stumble over. It is unlikely to succeed in anything but choking off economic growth and expanding government power over the economy at the expense of the people.

There is an alternative solution to dealing with vulnerable, systemically important institutions: nationalize them.

The very idea of nationalization naturally raises the bile in the throats of any supporter of the free market, but bear with me on this one.

I propose a law that would require any large financial institution seeking emergency funds from the federal government, as happened during the financial crisis through the Troubled Assets Relief Program (TARP) and government subsidized mergers, to instead be taken over by the government. The law would also stipulate a process by which the firm would be broken up into smaller pieces and sold back to the market as quickly as possible.

This radical proposal would be better than what has occurred for two reasons. First, in terms of the actions of the big banks, they would necessarily factor the prospect of being cracked open and sold off piecemeal into their future risk calculations. This would mean firms would take actions less likely to cause systemic shocks to the economy and removes the perverse incentive from banks like Goldman Sachs to deliberately make themselves systemically necessary as a sort of insurance policy. When a firm is too big too fail, that means it does not need to factor the true risk of failure into their calculations. My proposal allows for a mechanism to deal with firms that are systemically important in an orderly way that does not promote bad actions from the institutions in question.

Second, my proposal would prevent the sort of concentration that the government’s response to the financial crisis produced. The big banks were glutted with federal cash to keep them afloat while smaller banks were left largely in the lurch. The result has been that the big institutions that were at the center of the financial collapse have only gotten larger and more profitable, while the smaller institutions with no such blame getting sunk or, if they survive, playing on an even more unfair field.

There is nothing wrong with big banks. There is something wrong with those big banks using their political clout to skew the free market in their favor. My proposal is a means by which the people can reassert control over their economy without giving undue regulatory powers to the government.

My proposal could find support on both sides of the aisle in Congress. For the left, the policy is punitive against firms that take risks while being extremely important to the economy. For the right, it benefits Main Street and only takes effect when institutions are at risk of going under and taking everyone with them.

The government is not to be trusted when it comes to regulating the economy day-to-day. It’s ability to interfere should be strictly defined and the steps it may take clearly delineated. My proposal demands very specific actions in response to specific shocks. In the end, the economy benefits from fewer systemically risky firms, the taxpayers benefit from not writing a blank check to crony-capitalist bankers, and the industry benefits from a more level playing field.

Categories: On the Blog

Rational Thinking About Irrational Numbers

August 30, 2014, 11:51 AM

I am drawing this reference from this article from someone who I look up to and admire – Dr. Roy Spencer.

In the last 100 years, the amount of CO2 in the air has increased from three molecules per 10,000 molecules of air, to four molecules out of 10,000 molecules of air.

Which means we are being asked to believe the increase of one molecule of CO2 out of 10,000 molecules of air in the last 100 years is causing catastrophic climate change that threatens mankind.

This is all fascinating to me, given Secretary of State John Kerry’s comments on the immense threat of a catastrophe based on out of control climate, when we have groups like ISIS and Hamas running around.

Seems to me that there is a lot of inconsistency here. The idea from John Kerry is that CO2-induced warming is an imminent national security threat. So he is saying the increase of one molecule of CO2 per 10,000 molecules of air in the last 100 years is a threat on par with what is going on in the Middle East? How can that even be close. The real threat when it comes to CO2 is the agenda that paints it as a threat. One, it makes us more reliant on an unstable area of the world. Two, the policies limiting its use starve the lifeline of our economy. As I have opined before, it’s the global warming agenda that is the major threat, not global warming.

I for one am much more concerned about Hamas, ISIS, etc., than CO2, except that it’s the focus of an agenda that is stopping our nation from progressing.

But think about what is going on here. Hamas fires untold amounts of rockets into Israel. Israel tries to protect itself. Hamas uses its citizens to protect its missiles. Israel uses its missiles to protect its citizens. But Israel is ripped up and down. How does that hook into CO2? Which is a bigger threat to global stability: an organization like Hamas or ISIS, or the increase of one molecule of CO2 out of 10,000 molecules of air in the last 100 years? Why would anyone be even thinking about the latter, given the example of the former, unless of course the absurdity of blaming Middle East problems on climate change is the goal? (Better tell that to Jacob and Ishmael, and everyone that followed.)

But let’s really put this whole CO2 scare (scam) in perspective, okay?

Here is the infamous hockey stick graphic, the last 50 years of warming based on the most reliable temperature measurements versus tree rings that decided to show cooling instead of warming. This, of course, has stirred up the angst of Dr. Michael Mann when people suggested there was something very wrong with switching the way one measured temperatures after 950 years when that way no longer agreed.

Now here is the real hockey stick, the increase in GDP per capita since the coming fossil fuel age really took off over the last 100 years.

That is a real correlation. No switching measurement horses midstream. During the time of the increase of one molecule of CO2 per 10,000, earth’s per capita income went up. And think about how many more people there are now against 1900.

But let’s look more closely at this in the U.S., since we naturally want to lead the world to a brighter tomorrow.

It is estimated that the U.S. has averaged 20% of the CO2 input from man over the last 100 years . Assuming all the increase of CO2 is man-made, that would mean in 50,000 molecules of air, the U.S. has added one molecule of CO2 in the last 100 years, while the global GDP skyrocketed.

How much is that a year? Well we have to divide the figure above. One molecule per 50,000 in the last 100 years means we have averaged one molecule of CO2 for every 5,000,000 molecules of air per year. So we are asked to believe that is changing the climate?

But wait, let’s think locally to act globally (I have a sweatshirt that says that).

300,000,000 people. How many molecules of CO2 does the average American add to the atmosphere every year?

One molecule of CO2 out of every 1,500,000,000,000,000 molecules of air each year.

Why you selfish capitalist pig. You are destroying the planet by your very existence (though the plants love you – I saw a tree hug a human the other day).

You may say, “Joe, this is an absurd exercise.” Exactly. You must fight the absurd by showing how absurd it truly is. And nothing in our national debate today comes even close to this agenda when put in proper perspective, yet we have people trying to say this threatens our way of life. It threatens theirs, given the gravy train of $165 billion spent on climate change in the past 20 years at the expense of the American people as a whole.

So here is the question to, let’s say, Leonardo DiCaprio, given he flies around the world and makes movies with untold amounts of energy use: Do you really believe the U.S. or the rest of the globe, given the absurdly small amount of CO2 that has been added to the air, is actually changing the climate in any measurable way? Do you understand how irrational that is given the actual numbers?

Another question: Given the major problems facing man today, one of which exemplified above, how can any rational person try to even address this issue as being remotely a problem?

Final questions for inquiring minds: Was the iceberg that sunk the Titanic caused by global warming? How long did you train to hold Kate Winslett so she didn’t fall off the boat? Are you going the way of Brando, and when can we expect you to tip 250, 300 lbs? You understand that weight gain means more of a carbon foot print.

Stellllllllllaaaaaa.

I figure he might have the answer to those last three, because he certainly doesn’t the others – nor do any of the people pushing this agenda.

[Originally published at The Patriot Post]

Categories: On the Blog