No, this isn’t a missive from Nigerian scam artist. Next week is School Choice Weekly’s first anniversary, and to celebrate, we’re handing out prizes for readers who share our free weekly education e-newsletter with friends you think would be interested in a weekly education news roundup from a pro-liberty perspective.
The prizes: A pair of tickets to Heartland’s benefit dinner on September 12, 2014, featuring columnist Michelle Malkin; and two copies of the new book, Rewards: How to Use Rewards to Help Children Learn (And Why Teachers Don’t Use Them Well), by Joseph Bast and Herbert Walberg.
How to enter? We’re running the competition on the honor system. There are two ways to enter. For the first, email the SCW email or this entire post to five friends. They can subscribe, completely free, by entering their email address and checking the “School Choice Weekly” box at this link. After you forward, register that you’ve done so by commenting on this blog post. Just leave a comment. It can say anything (okay, keep it G-rated), but make sure to include your email address in the commenter box, or we cannot contact those who win.
In two weeks, SCW will use a random number generator to pick three numbers among the number of comments on the post. The three winning numbers will be matched to their corresponding comment numbers, and SCW will email the winners to get their mailing addresses for prize shipping.
Wait! It gets better. Here’s the second entry method, perhaps more appropriate to this blog post. If you post the subscribe link, with an explanatory message, on your Facebook profile, you may post two comments on the entry page, for two chances to win. Sample Facebook message: “Interested in liberty-loving education news, and having someone else sift and deliver it to your email each week, free? Join me in subscribing to School Choice Weekly.”
Okay, sales pitch out. Get forwarding and posting, then comment to enter our drawing!
One-hundred-twenty fellow lovers of liberty signed up to attend an evening with Steve Forbes and Elizabeth Ames at the historic Union League Club in Chicago on Wednesday, August 13, for a special edition of The Heartland Institute’s Author Series to hear Forbes and Ames discuss their new book, “Money: How the Destruction of the Dollar Threatens the Global Economy, and What We Can Do About It.”
Steve Forbes is coauthor of the New York Times bestseller “Power Ambition Glory” and the Wall Street Journal bestseller “How Capitalism Will Save Us.” He is also Chairman and Editor-in-Chief of Forbes Media. In 1998 Steve Forbes was a Republican candidate for president.
Elizabeth Ames is a communications executive, and has written two previous books with Steve Forbes, “How Capitalism Will Save Us” and “Freedom Manifesto.”
What prompted the Forbes/Ames book collaboration?
The intent of the authors is to covey that money is a simple, basic subject that all can understand. Much education is needed on the subject, which becomes apparent when individuals respond in many different ways when questioned about money. Even among intelligent, self-confident and very capable people, the subject of money is often beyond their comprehension. Steve Forbes and Elizabeth Ames are counting on those who take the time to read their book to become better versed about money than most people are today in the highest government positions.
Introduction of Ames and Forbes
Joe Bast, president and CEO of The Heartland Institute (visit Heartland’s Web site), described the purpose of Heartland for those in attendance who were unfamiliar with the Chicago-based free market think tank “as a 29-year-old Chicago based think tank promoting public policy based on individual liberty, limited government, and free markets.” In remarks prior to introducing Steve Forbes and Elizabeth Ames, Mr. Bast spoke of four public policy areas of utmost importance which pose immediate challenges to this nation’s prosperity:
1) Out-of-control government spending at the national, state, municipal, and local levels of government, with special emphasis on the City of Chicago;
2) Obamacare, with its extensive regulations and control over the healthcare system;
3) Common Core, a curriculum not created by the states and which does not prepare students for college, but instead represents a politicized curriculum imposed upon the states, sight unseen, via Obama’s Race to the Top program, sight unseen, which shamefully teaches a distorted history of this nation. This article by Stanley Kurtz, published July 10, 2014, presents a shocking account of the new history standards under Common Core “New War Over High School U.S. History” .
4) Global Warming, which 10 years ago became of prime interest to The Heartland Institute For as mentioned by Joe Bast, the issue was too important for conservatives and libertarians not to touch just because they were not scientists. Since its involvement with Global Warming, The Heartland Institute has produced many reports that counter the reports put out by the IPCC (Intergovernmental Panel of Climate Change), which show the inaccuracies of climate models used by the IPCC, and further expose contradictions made through observation. With China and India not willing to reduce their CO2 levels, might the U.S. be expected to reduce her CO2 levels by 120% so world standards can be met? An unrealistic goal, indeed, and one that would raise the cost of all purchased goods, destroy this nation’s economy, and give the government power of control over everything.
Forbes and Ames in agreement over a stable monetary system and the gold standard
Both Steve Forbes and Elizabeth Ames agree that stable money is the only way to a true recovery and a stable and prosperous economy. In shopping for groceries, noticeable is that the cost of meat, coffee, cocoa and other essentials are reaching record high. For this Forbes and Ames lay blame at the feet of Federal Reserve Chairman, Janet Yellen, for believing that a little inflation is harmless and even a good thing. Ms. Yellen, along with others of the Washington establishment, view price increases as mere background noise against an economy that is on the road to recovery. As Forbes remarked, “The Fed hasn’t learned anything.” According to Steve Forbes, Yellen seems not to recognize how reckless sending over decades have given way today to this nation’s unstable, ever-weakening dollar. Instead of experiencing a recovery that the American people can believe in, the Obama/Bernanke/Yellen Federal Reserve and its unstable dollar policies have resulted in what is a feeble recovery at best, and perhaps the start of hyperinflation brought on by the Fed’s historic money printing via quantitative easing. Regarding Janet Yellen’s confirmation hearing and her remark that more inflation is needed to stimulate the economy, Steve Forbe’s expressed astonishment that not one senator asked Yellen how asking taxpayers to pay $1,000 more or so a year for goods and services through inflated money would stimulate the economy!
An article written by Ralph Banko at the time the U. S. Senate was moving toward the confirmation of Janet Yellen as chair of the Federal Reserve System, reflects on what John Maynard Keynes and Nicolas Copernicus had to say about social order and government when money is debased. Further shared are Lenin’s view on the practice of debasing money(of lowering the value of currency.).
The best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, buy they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Another area of expressed agreement by Forbes and Ames is in their belief that a true recovery and a prosperous economy can only be achieved through the gold standard as a measure of value. Why gold? Because gold keeps its value better than anything else. Nevertheless, Forbes recommends against investing more than 5% to 10% in gold and then only for the purpose of serving as monetary policy insurance.
This nation’s monetary system based on fixed exchange rates ended in the 1970s, when under Nixon this county went off the gold standard to today’s system of fluctuating “fiat” money. This move has proved disastrous for the U.S. and the global economy.
In the more than four decades since abandoning the gold standard, the U.S. dollar has dramatically declined in value. Furthermore, U.S. economic growth has been below historic standards. According to Forbes the housing meltdown and the turmoil that followed would never have occurred with stable money.
Summary of Elizabeth Ames’ remarks
Ms. Ames based her remarks on Chapter 5 of her collaboration with Steve Forbes: Money and Morality: How Debasing Money Debases Society. According to Ames, the malaise created by unstable money afflicts not only the economy but all of society. In addition to being a yardstick of value, money is a vital facilitator of social trust in that it expresses the priorities of a society. When money is unstable it acts as a catalyst for disorder. Monetary debasement to the extreme happened under Hitler when money became almost worthless. Ames attributes the destruction of money as a key reason for the recent rise of political polarization and unrest in this nation.
Ms. Ames compared unstable money to Carbon Dioxide. Both are ordorless and colorless. Weak money helped to create the foreclosure crisis (housing bubble) of 2010 and likewise triggered the depression of 2008. Ames emphasized the importance of trust existing in a monetary system. When money is corrupted unrest develops from a lack of trust between effort put forth and just reward. According to Elizabeth Ames, a loss of trust in the monetary system was a factor in destroying McCain’s 2008 candidacy for president. During the foreclosure crisis a definite shift in attitude was noted by Ames when instead of trying to make good on a debt, it was not considered immoral to simply walk away. With an unstable dollar, there is more of both corruption and crime. While the media is focusing on the social unrest in Ferguson, Missouri, it is folly to ignore the community’s poor economic conditions as a contributing factor. For without an education, a job, and a bleak future, individuals are prone to exploit situations and turn to criminal activities for personal gain.
Summary of Steve Forbes’ remarks
It was touch and go whether Steve Forbes would be able to arrive in time to fulfill his speaking engagement, having experienced a delay in his flight to O’Hare. Fortunately for all, Forbes arrived at the Union League Club as Elizabeth Ames was finishing up with her remark.
Needing little introduction, Steve Forbes advanced to the podium and immediately plunged into the topic at hand, that of money, cautioning that if the money issue isn’t handled properly in an economy nothing else ultimately matters. The result will be an economy that is undermined. As related by Forbes, wealth is created through conducting transactions with one another. It is money that makes transactions possible and easy to do, in contrast to when bartering was used to acquire goods and services. But money in itself is not wealth. Wealth is created by people engaging in transactions with one another. It is the use of money that enables individuals to figure out what something is worth. Accordingly,money works best when it has a fixed value. If the value of money is not known risk goes up, bringing with it economic chaos. Consider what occurred in the 1970′s when people poured money into oil and farmland wrongly believing that increases in price must mean there was a shortage of both which necessitated increasing supply. When the price of oil and farmland crashed, however, prior investments made in farmland and oil went south. Even though oil and farm land have both increased in value during the last decade, how much of the added value is real and how much is inflation?
As to why this nation must get back to pegging our currency to gold standard, Forbes used familiar measurements of time and distance to explain the devastating and disrupting consequences of a constantly declining in value of an inflationary “fiat” monetary system. Currency to work is like having sixty minutes in an hour or 12 inches in a foot. These are fixed value so when you make an exchange, do a trade, or buy and sell, it is known what each party is receiving. Forbes further noted that nothing over thousands of years has kept its value as well as gold. Investors need to know that they are not going to be left with devalued dollars.
Asserted by Forbes is that had Nixon not completely unpegged the dollar from the price of gold in 1971, and had this nation maintained the growth rates that she had experienced for the previous 180 years before the dollar was unpegged — despite boom times, depressions, and everything else — the size of the economy today would be 50% larger than it now is
With tongue firmly implanted in cheek, Forbes remarked that if we returned to the gold standard, one-world socialist currency manipulator George Soros “would have to find another line of work.”
When questioned about the future of Bitcoin, Forbes described it as a high tech cry for help in response to the unstable dollar, further remarking that Bitcoin is still in its infancy and has not yet been able to achieve stability so it is trusted.
Past and Present
Steve Forbes and Elizabeth Ames were with Heartland at the Union League Club in November, 2012, to talk about their book collaboration “Freedom Manifesto.” Listen to Forbes’ talk about the book in this video.
Save the date of Friday, September 12, 2014, to attend The Heartland Institute’s 30th Anniversary Benefit Dinner with Michelle Malkin as Keynote Speaker. For more informationvisit Heartland’s Web site or call 312/377-4000.
[Originally published at Illinois Reveiw]
Many times the sound of howling and yelping coyotes awake me from a sound and cozy slumber. I sit bolt upright in my bed as my sleep-filled brain tries to calculate where my critters are and whether or not they are safe. The dogs on the floor beside me, the cat on the foot of the bed, I roll over and go back to sleep.
In the years that I’ve lived in the mountains outside Albuquerque, I’ve lost three cats and three ducks to coyotes. I know they are natural predators and if my pets are outside, there is a chance they’ll fall prey. I hear the coyotes, but I hardly see them. They don’t generally come close to humans. They are after the squirrels and rabbits—and an occasional cat or duck.But that could all change due to a new U.S. Fish and Wildlife Service (FWS) plan to expand the area for the Mexican grey wolf reintroduction. The current plan calls for virtually all the southern half of New Mexico to become wolf habitat—but wolf advocates at a hearing about the plan, held in Truth or Consequences, New Mexico, on Wednesday, August 13, repeatedly declared that Southern New Mexico wasn’t enough. They want the wolf introduced north of I-40—which would include Albuquerque and Santa Fe. Some called for wolves to be released in the Grand Canyon and the Four Corners area.
Wolves are master predators—and they are enemies of coyotes. Wolves attack bigger prey: deer and elk, horses and cattle—but are known to carry off a dog or cat as well. The wolves that are a part of the reintroduction program are not afraid of people and will come right up to a house if they are hungry.
Supporters of the expanded plan, plead for people to “open their eyes and hearts to wolves, to remove boundaries.” One claimed: “The big bad wolf isn’t so bad after all,” and added, “there’s no proof a wolf has ever harmed a human.” “Wolves are demonized” and “wolves don’t hurt humans” were reoccurring themes throughout the evening hearing—where 70 people spoke (48 for the expanded plan, 22 against). Not everyone who wanted to be heard was given the opportunity. The hearing was conducted with precision—cutting people off midsentence at the two-minute mark—and ended promptly at 9:00PM.
Most of the 22 against the plan live in the areas already impacted by the current wolf reintroduction—the Gila National Forest on the New Mexico/Arizona border.
One woman told of growing up on her family’s ranch. She remembers being able to play by the stream without fear. But now, with wolves around, it is a different story for her grandchildren. They came to visit one day. They brought their new puppy. As they bounded out of the car, toward the house, two wolves emerged from the creek and snatched the puppy as the shocked children helplessly watched. They are now afraid to go to grandma’s house. They have nightmares.
Another told how she felt when a wolf was spotted less than 35 feet from her children. Her husband was away. She grabbed the children and, along with the dogs, stayed locked in the house—only to see the wolf on the front porch with its nose pressed against the window pane. She has reported on the incident: “Throughout the evening my border collie whimpered at the front door, aggressively trying to get out. Both dogs paced on high alert all night.” The next day wolf tracks were found all around the house—including the children’s play yard. The wolf was euthanized on private property within 150 yards of the house. She concludes her story: “It’s difficult to describe the terror of a predator so fearless and eager to get into my home.”
Others told similar stories. Children, waiting for the school bus, have to be caged to be protected from the wolves. Nine ranches in the current habitat area along the New Mexico/Arizona border, have been sold due to wolf predation—too many cattle are killed and ranchers are forced off the land.
Had I been allowed to speak—and I did sign up, I would have addressed the lunacy of the plan. After huge amounts of effort and resources have been invested to save the sand dune lizard and the lesser prairie chicken in and around the oil patch of southeastern New Mexico, they now want to introduce a master predator that will gobble up the other endangered species? After all, as many proponents pointed out, “wolves don’t have maps.” They don’t stay within the boundaries on the FWS maps, they go where the food is—just ask the families living in the current range.
As I listened to the presenters, I wondered: “Why do they do this?” People and their property need to be protected. Instead, supporters whined that capturing wolves and moving them away from communities “traumatizes” them. What about the harm to humans; the traumatized children? Does human blood need to be shed to consider that they have been harmed?
Perhaps the answer to “why?” came from one wolf supporter who opened with this: “I am from New York. I don’t know anything about ranching or wolves.” And then added: “Ranching will be outdated in 10-15 years. We can’t keep eating meat.”
State Senator Bill Soules, from Las Cruces, supports the new, expanded plan. He said: “I’ve had many people contact me wanting wolves protected. I’ve had no one contact me with the opposing view”—perhaps that is because neither phone number listed on his New Mexico Legislature webpage takes you to a person or voicemail.
Calls to our elected officials do matter. Contact yours and tell him/her that you want people protected, that humans shouldn’t be harmed by an expanded wolf reintroduction territory.
I wrote a short version of my experience at the hearing for the Albuquerque Journal because I wanted people there to be aware of the plan to introduce wolves into close proximity to the Albuquerque area. Myop-ed in the local paper generated a vitriolic dialogue on the website—with more than 90 comments at the time of this writing. Many said things like this one, supposedly from a woman in Concord, New Hampshire: “If you don’t like it move to the city it is their home and you moved into it so either deal with it and stop your whining or move back to the city.” Yeah, that will work really well for the ranchers who earn their living and feed America by raising livestock.
This story is about New Mexico, Arizona and the Mexican grey wolf. But similar stories can easily be found in Idaho, Wyoming and Montana where the Canadian grey wolf was reintroduced nearly two decades ago. The wolf population has grown so rapidly that they have been known to aggressively kill livestock and cause millions of dollars of loss to ranching families—with the Idaho record being 176 sheep killed in one night. In Wyoming, the Wolf has been removed from the endangered species list and ranchers can now kill the wolf and protect their herds without fear of punishment from our government. Even the U.S. FWS is removing and euthanizing the wolves that were intentionally introduced into the region. As recently as August 21, 2014, wolves are wreaking havoc, killing sheep just 50 miles outside of Spokane, Washington—where the U.S. FWS has authorized a rancher to kill the wolves and, much to the dismay of environmental groups, state wildlife agents are killing wolves to protect people and property.
Environmental groups have been pushing to bring the wolf back to Colorado through the Rocky Mountain National Park.
While the public hearing regarding the expanded introduction of the Mexican Grey Wolf is over, the U.S. FWS is accepting written comments on the proposed revision to the Nonessential Experimental Population of the Mexican Wolf through September 23. Please add to the discussion—though they don’t make it easy as to be accepted, comments must be substantive, related to the proposed alternatives, or scientifically valid, and something not yet considered.
People shouldn’t lie awake in fear for their families and property because our own government introduces a predator amongst us.
[Originally published at Red State]
If you watch much mainstream TV, you’ve probably seen Siemens’ new multi-million-dollaradvertising blitz to sell the American public on industrial wind. Why the sudden ad onslaught?
The wind business abroad has taken a huge hit of late. European countries have begun slashing renewable mandates, due to the ever-broadening realization that renewables cost far more than industrial wind proponents have led people to believe: economically, environmentally, technically, and civilly.
Siemens’ energy business took a €48m hit in the second quarter due to a bearings issue with onshore turbines, and a €23m charge due to ongoing offshore grid issues in Germany – on top of subsidy and feed-in tariff cutbacks, recent articles have pointed out.
As Siemens’ tax-sheltering market dries up in Europe, its U.S. marketing efforts are clearly geared toward increasing its income and profits via wind’s tax sheltering schemes in the United States. The company stands to make millions, so Siemens ad campaign is obviously part of an overall pitch to persuade Congress to extend the hefty wind Production Tax Credit (PTC), more accurately called“Pork-To-Cronies.” As Warren Buffett recently admitted, “We get tax credits if we build lots of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
Taxpayers and ratepayers, beware!
President Obama often says he intends to “close corporate loopholes,” but his PTC and other policies continue funneling billions of taxpayer dollars to his wealthy corporate insiders and campaign contributors – while we continue to rack up unconscionable debt for our children and grandchildren.
Increasing public awareness of the wind energy scam has led to increased opposition to extendingany more corporate welfare to Big Wind via the PTC and energy investment tax credit (ITC). Enter another bureaucratic end-run around once clear statutory language by this Administration.
As reported by the Wall Street Journal, the increasingly politicized IRS recently relaxed the definition of “commence construction” to the point where the definition bears no resemblance to the actual words. During a hearing by the House Energy Policy, Health Care and Entitlements subcommittee last October, Curtis G. Wilson of the IRS admitted that developers can now game the system to the point where projects built years in the future could still meet the eligibility requirement for “commence” now.
U.S. taxpayers and ratepayers are doomed when, instead of allowing the markets to work, crony-corruptocrats are picking the winners and losers in the energy marketplace, using such nefarious tactics.
Sadly, most people don’t even know the difference between energy and power. This reality has built the framework for the biggest swindle ever perpetrated on citizens worldwide. Many have bought into the alarmist argument that “we have to do something” to stop “dangerous manmade global warming.” Enter the wind industry sales department, primed to capitalize on public fears and alarmist hype.
Siemens also needs to convince the 80% of U.S. citizens who live in suburbia that industrial wind factories are “environment-friendly,” and everyone loves them. Thus, as usual for these disingenuous ad campaigns, a sprawling wind facility is pictured among green fields, with no homes anywhere to be seen, no birds are being slaughtered, while a happy Iowa leaseholder smiles and says she loves wind.
A drive out Route 20A in Wyoming County, western New York State, however, tells a far different story. The western side of Wyoming County – which used to be some of the most beautiful countryside in New York State, has been industrialized with 308 giant, 430-foot-tall towers, and their 11-ton, bird-chopping blades spinning overhead, only hundreds of feet from peoples’ homes and roadways. There’s no doubt that Siemens won’t be showing you this reality in any of their TV ads!
Unfortunately for the residents of Orangeville in Wyoming County, greed at the top in Washington, DC determined their fate. The sole reason Invenergy went ahead with its plan to build its 58-turbine project was that, in the early morning hours of January 1, 2013, the PTC was added as pork for companies sucking at the wind welfare teat.
Ever appreciative of the handouts, Invenergy owner Ukrainian Michael Polsky rewarded President Obama by holding a $35,000 a plate fundraiser at his Chicago mansion. Mr. Obama is so committed to Big Wind that he’s even legalized 30-year eagle kill permits just for the wind industry. Anyone else harming an eagle, or even possessing a single bald eagle feather, is penalized with an iron fist.
There you have it – corporate cronyism in all its glory, with bird murder as its crowning achievement.
Word of impending lawsuits lingers in Orangeville. It remains to be seen if disenchanted leaseholders will end up suing Big Wind, as others have. In the meantime, we’re hoping we don’t have any 11-ton blade breaks that throw shrapnel for thousands of feet, or any airplanes crashing into wind turbines during fog, as occurred in South Dakota earlier this year, killing all four on board. (I’ll bet you won’t be seeing any of these facts in Siemens’ ads, either.)
Our elected officials need energy literacy. Even a small dose would help.
What’s most frustrating, when attempting any kind of correspondence regarding these energy issues with many elected officials, is the kind of response I received from Senator Chuck Schumer (D-NY) when I wrote him a letter about ending the Wind PTC. Senator Schumer never even mentioned the PTC in his response. Instead, he rambled on about the need to “reduce foreign oil imports,” and increase “efficiency” – neither of which has a thing to do with wind-generated electricity.
Mr. Schumer recently feigned alarm following complaints by citizens about soaring electric rates – demanding answers about it, while simultaneously supporting yet another Wind PTC extension (plus other rate-increasing “renewable” projects). Senator Schumer’s hypocrisy is outrageous, and unacceptable.
Perhaps it’s time for U.S. ratepayers and taxpayers to demand that their elected officials first pass an energy literacy exam, before they pass such cost-exorbitant, “green” boondoggles on to consumers.
Congress is on vacation through Labor Day, which makes this the perfect time to approach your senators and representatives while they’re home. Attend town hall meetings and in-district fundraisers. Remind your representatives that we put them in office, and that we can also vote them out!
Since energy plays a pivotal role in our national economy – impacting the cost of absolutely everything else – candidates should have “energy” listed on their “issues” webpage.
Good candidates will support an “All of the Sensible” energy policy, as opposed to the “All of the Above” energy policy which President Obama has been pushing on behalf of the “green” movement. “Sensible” alternative energy options are those that are backed up by scientific and economic proof that they provide net societal benefits. Industrial wind fails this test miserably!
For more information, refer friends and elected officials to Robert Bryce’s excellent book, Power Hungry: The myths of “green” energy and the real fuels of the future.
Continue to call and write their offices, and encourage them to oppose any extension of the PTC and ITC! Write letters to your local newspapers, copy their district offices, and post information on their social media pages (e.g., Face Book & Twitter).
We must demand accountability from elected officials, or vote them out! Reliable, affordable energy is what has made America great. We need to keep it that way.
Examples of lower risk products include smokeless tobacco such as swedish style snus, increasingly popular e-cigarettes, and next generation products such as Philip Morris International’s HeatStick, (which heats but does not burn tobacco), due out in cities in Japan and Italy later this year. British American Tobacco is engaged with regulatory agencies around the world as they prepare to roll out a variety of lower-risk products. And small innovators around the world are developing better e-cigarettes, almost daily. Each of these products come with some degree of risk, but those risks pale in comparison to the well-established and overwhelming harm that comes from smoking cigarettes.
United States law allows companies selling lower risk products to point to that difference in risk. Those wishing to make the claim must first prove to the Food and Drug Administration (FDA) that the product is not only less harmful to the individual user, but to the population as a whole. At the heart of this regulatory approach is adherence to rigorous science. This approach promises to significantly reduce the harm from tobacco by giving consumers accurate information that could prompt them to switch to lower risk products, even if they don’t (or can’t) follow the best advice: quit all forms of tobacco.
Yet regulators in much of the rest of the world eschew the scientifically rigorous approach in favor of grandstanding, anti-business rhetoric, and bizarre theories that seek to punish tobacco companies rather than help smokers.
The harm reduction model works in Sweden, the only European country where snus is legal and widely used by men instead of cigarettes. Not coincidentally, Swedish men have strikingly lower rates of tobacco-related disease than other Europeans.
Last month, Swedish Match applied to the FDA for permission to tell users that it’s snus isn’t as harmful as smoking. The proposed language would accurately and simply state, “no tobacco product is safe, but this product presents substantially lower risks to health than cigarettes.“
The company backed up the “modified risk tobacco product” claim with some 120,000 pages packed with the very type of peer-reviewed research the law requires and that the FDA requested. That’s approximately 119,999 pages more than necessary to prove that cigarettes are more dangerous than a non-combustible product like snus.
A positive decision from the FDA would open the door to similar claims from other companies and spur investment in new lower-risk alternatives to smoking. This would be a win for public health. And by “public health,” I mean the health of the people we should be trying to help, not the activists who have co-opted the term and regularly oppose tobacco harm reduction.
Yet sadly, regulatory bodies in much the rest of the world are rushing to cut off long-existing products like snus, new products like e-cigarettes, and future products that are being developed using cutting edge science meant to deliver more satisfaction and less harm. Activist opposition to these newest products makes it evident that their problem isn’t with the harm, it’s with the satisfaction. If that’s the case, they aren’t advancing public health, they are advancing a form of public puratinism.
In the EU, with the exception of Sweden, snus is already banned as part of the Tobacco Product Directive. Now, according to reporting by the Financial Times, elements within the World Health Organization are trying to classify e-cigarettes as “tobacco: under the Framework Convention on Tobacco control (FCTC), which has 168 signatories. E-cigarettes contain nicotine derived from tobacco, but do not contain tobacco. Such a move would mean that the same strict advertising restrictions, public use bans, and possibly even sin taxes that apply to cigarettes, would automatically be applied to less harmful products, without any review of the scientific justifications or consideration of the unintended consequences of such rules.
Why would regulators treat dramatically less-harmful e-cigarettes the same way they treat actual cigarettes? They are reportedly concerned that the use of e-cigarettes will “normalise” smoking, according to published reports?
E-cigarettes “could result in a new wave of tobacco epidemic,” said top FCTC official Dr. Haik Nikogosian, in a meeting to set the agenda for a full FCTC gathering in Moscow in the fall. Dr. Nikogosian subscribes to the bizarre and undocumented theory that non-smokers will see former smokers now using e-cigarettes, and as a result from seeing it, decide themselves not only to start using e-cigarettes, but to start smoking cigarettes. This type of twisted thinking, if it finds its way into policy, is sure to inhibit smokers from switching to e-cigarettes, ironically doing the opposite of what countries who signed the FCTC wanted to accomplish, which was reduce smoking rates.
In fact, there’s a growing body of evidence that shows that e-cigarettes are helping smokers quit. In a study published this spring in the journal, Addiction, Professor Robert West found that e-cigarettes are 60 percent more effective than nicotine replacement therapies at helping smokers achieve their goal of quitting. Perhaps the FCTC should encourage more private sector investment in harm-reduction products. It could do so, in part, by establishing rules, much like those in place in the U.S. (not a party to the FCTC), where innovators know what scientific standards they’ll be held to.
The WHO approach is facing stiff opposition from scientists. In May, 53 leading researchers urged the WHO to think twice (or even once) about the wisdom of it’s ant-harm reduction approach. They wrote that “The 1.3 billion people who currently smoke could do much less harm to their health if they consumed nicotine in low-risk non-combustible form.”
They added that “we have known for years that people ‘smoke for the nicotine but die from the smoke…There are now rapid developments in nicotine-based products that can effectivelysubstitute for cigarettes but with very low risks.”
The EU, the WHO, and other bodies would serve the public well if they could garner the fortitude to put aside any preconceived notions about products of the private sector, and simply follow only the science.
The FDA should follow that science and apply already existing common sense regulations by swiftly approving Swedish Match’s application. Doing so would not only encourage smokers to quit, but it would give industry enough confidence in the regulatory system so that the private sector will continue to invest in other harm reduction approaches. As far as public health is concerned, the more non-cigarette options available, the better.
[Originally published at Pundicity]
Robert Draper’s piece on The Libertarian Moment in the New York Times magazine has been receiving a great deal of attention over the past week or so. Much of this attention has just illustrated that critics of the idea of a “libertarian moment” are misunderstanding a great deal about this movement, where it came from, and what it means for the future.
A friend in political science was recently asking me about this, and he echoed critics like David Frum and Paul Krugman, who have pointed to poll data which illustrate that Millennials are more liberal than ever.
“Aren’t Millennials just a bunch of socialists?” he asked.
“Of course!” I responded. “They’re that, and more libertarian, too.”
He seemed very confused for a moment. “Uh, what?”
How can this be? Well, I think that should be pretty obvious, as both political poles are responses to the same social trend: the atomization of the American people. One represents a populist reaction that demands more equal personal liberty; the other, a call to the ruling elite to enforce equality by solving the problems they claimed they would address. And which path the majority of Millennials choose will likely dictate the direction of our political scene for several decades to come.
Let’s dispense with Frum and Krugman first: I don’t think they understand what’s being argued here at all. The argument that a libertarian moment is happening is essentially an argument that there are more Millennial libertarians than there were in prior generations. Of course there are. We’re talking about the largest generation in American history here, dwarfing the Baby Boomers. There’s more of just about everything in it. No one is arguing that a majority of Millennials are libertarian – they’re arguing that there are more libertarians among the Millennial cohort. And there are probably more socialists, too (generations – how do they work?).
It is absolutely ludicrous to argue that the momentum in our political sphere among the younger generation is not more libertarian. It’s obvious to anyone who’s paying attention to politics on the ground. Why is that? Well, it’s not because of the Libertarian Party. It’s because there’s a host of younger people, the children of George W. Bush voters or Bush voters themselves, who realized that libertarianism speaks more to their worldview than modern day conservatism. It’s because Ron Paul worked to build an army of volunteers and took the message of libertarian ideas to a generation of voters, with a focus on slowly taking over the Republican Party. It’s because the views of Ron and Rand, Mike Lee, Justin Amash, and other libertarian-leaning Republicans on the issue of abortion made them more palatable to a Christian audience (as opposed to someone like former New Mexico Gov. Gary Johnson, who takes the opposite view on the abortion issue). Why is the Token Libertarian Girl, pro-life Christian Julie Borowski, not just a typical Republican? The Pauls evangelized libertarian ideas to a young audience ready to hear them and eager to make them a reality; and then, with the rise of the Tea Party, they expanded that appeal beyond the youngsters, too. That’s why.
If the Drug War made Generation X more libertarian than the Boomers, the War War has made Millennials even more libertarian than both. That doesn’t mean that the generation is libertarian as a whole, it just means it has more libertarians in it – libertarians who, given their parentage and lifestyle and churchgoing patterns, might have been expected to have more conventional views. They rejected the idea that the Republican Party was any less hypocritical than the Democrats, that the Ruling Class knew best about which direction to take the country, and accepted the idea that the Compassionate Conservative approach to policy has failed. In place of all these, they accept a view that liberty is better than paternalism from the left or right – even paternalism applied with good intentions.The Ruling Class And The Administrative State
The engine of this paternalism predates both the Millennials and their parents, of course. It was created by the Progressives and Woodrow Wilson, reinvigorated by Franklin D. Roosevelt, and reached its fulfillment with Lyndon B. Johnson. The Administrative State, constructed as an arbiter and implementer of social equality and expediency, was created to insulate the non-political and presumably superior academic and policy leaders from the vagaries of politics. The legislative branch was largely happy to assent to this, as it turns the process of legislation into one of delegating the power to decide things as opposed to having to decide them yourself (decisions being little more than political vulnerabilities, after all).
This Administrative State was also built on a new conception of rights, and the relationship of government to the citizenry. As Frank Goodnow, founding president of the American Political Science Association, put it:
“The rights which [an individual] possesses are, it is believed, conferred upon him, not by his Creator, but rather by the society to which he belongs. What they are is to be determined by the legislative authority in view of the needs of that society. Social expediency, rather than natural right, is thus to determine the sphere of individual freedom of action.”
Government must therefore adapt in order to seek the needs of society, as opposed to protecting the rights of individuals to freely associate, speak, and govern themselves. Wilson was even more clear about his perspective on what must be done: “All that progressives ask or desire is permission—in an era when “development,” “evolution,” is the scientific word—to interpret the Constitution according to the Darwinian principle; all they ask is recognition of the fact that a nation is a living thing and not a machine.” The expansion of the state, in this view, was designed to protect a people who did not know what was best for themselves.
So much for James Madison’s description that “The powers delegated by the proposed Constitution to the federal government are few and defined… exercised principally on external objects, as war, peace, negotiation, and foreign commerce”. The message here was that you need a powerful and infinitely adaptable state to protect the people in a time when they cannot trust business or the marketplace to serve their interests. A full 62 years before his reincarnation as Elizabeth Warren, Wilson wrote in 1887:
“The socialist does not disregard the obvious lessons of history concerning overwrought government: at least he thinks he does not. He denies that he is urging the resumption of tasks which have been repeatedly shown to be impossible. He points to the incontrovertible fact that the economic and social conditions of life in our century are not only superficially but radically different from those of any other time whatever. Many affairs of life which were once easily to be handled by individuals have now become so entangled amongst the complexities of international trade relations, so confused by the multiplicity of news-voices, or so hoisted into the winds of speculation that only powerful combinations of wealth and influence can compass them. Corporations grow on every hand, and on every hand not only swallow and overawe individuals but also compete with governments. The contest is no longer between government and individuals; it is now between government and dangerous combinations and individuals. Here is a monstrously changed aspect of the social world. In face of such circumstances, must not government lay aside all timid scruple and boldly make itself an agency for social reform as well as for political control?”
The problem, of course, is that the Administrative State has failed – not just in the War on Poverty, but in so many of its other promises in seeking to benefit American lives. Instead, it has turned into a Nanny State – one which is the real arbiter of rules and regulations on how we live, not our elected representatives (who spend an inordinate amount of their time complaining about the administrated outcomes of the authority they delegated).
No wonder Americans just don’t trust the government that has mismanaged wars and intelligence, emergency response and transportation security, spied on American citizens and invaded our privacy, violated our trust, lied to our faces, and dictated what we can and cannot eat and drink and smoke. And all the while, it has seized more control and power for itself in the name of the public good. It’s little wonder that four decades after Watergate, trust in the U.S. government is at an all-time low – in fact, trust in government is even lower than the business barons Wilson once railed against.
“Just 13% of Americans say the government can be trusted to do what is right always or most of the time, with just over three-quarters saying only some of the time and one in 10 saying they never trust the government, according to the poll. “The number who trust the government all or most of the time has sunk so low that it is hard to remember that there was ever a time when Americans routinely trusted the government,” CNN Polling Director Keating Holland said. “But polls conducted by the University of Michigan consistently found a majority of Americans in the 1960s and early 1970s saying that the government could be trusted all or most of the time – until Watergate. In 1972, 53% said they trusted the government always or most of the time. By 1974, that figure had plummeted to 36%, and except for a brief period of patriotic sentiment immediately after the 9/11 attacks, it has remained under 50% ever since,” Holland added. The survey indicates that skepticism doesn’t stop at the White House and Capitol Hill: Only 17% of Americans believe that big business can be trusted to do what is right always or most of the time.”
This is what happens when you have a Ruling Class and an Administrative State insulated from the people they are supposed to represent. As Dave Corbin and Matt Parks note:
“Progressive ideology requires the centralization of power in federal and then executive hands–not to protect rights, but to right (perceived) wrongs. The ruling class, divided only between intentional (generally Democratic) and accidental (generally Republican) Progressives, naturally assimilates with the culture and power structure of the City of Government.”
The typically insightful Alexander Hamilton predicted that this would not matter: “It ought also to be remembered that the citizens who inhabit the country at and near the seat of government will, in all questions that affect the general liberty and prosperity, have the same interest with those who are at a distance, and that they will stand ready to sound the alarm when necessary, and to point out the actors in any pernicious project.” Well, not so much. It took him a long time to be wrong, but now, he is wrong.
There is more than one understanding of insulated. The general sense among many Americans is that too many in Washington and on Wall Street live in a different country from the people they supposedly serve. And that’s right: there are two Americas, one where tenure and bailout and cartel and capture and contract make you unfirable and eliminate your ability to fail, and one where none of that is true. But in a far more important and dangerous sense, the word insulated really means “immune to judgment.”
The way our republic is supposed to work is that our would-be Ruling Class can neither seize power nor wealth, nor keep it, except by the active, ongoing consent of the people. So the congressman who goes native loses, the CEO who approves New Coke gets fired, and so on. The secret sauce of American exceptionalism is that in every sector of life, success depended on service, mostly service to each other. But today the elites have figured out how to mercantilize the economy, and deployed the Administrative State as a paternalistic substitute for civil society. Look at any law, and you’ll find that the Ruling Class consistently benefits, directly or indirectly, by severing the links between the elites’ success and public approval.
What Republicans have forgotten, or never really knew, is that the free market and constitutional republicanism and federalism (localism) were all specifically designed to empower the little people over the big. They can’t get it through their heads that, yes, the point of the Constitution and of America was to reject the remnants of mercantile feudalism and all its side effects. The point of America is not that a single mom in Nevada and a mechanic in Ohio are just as important as Harry Reid and John Boehner, but in the ways that matter most, they are more important. It is by their consent that they are governed, not the other way around.Toward a Coherent Millennial Politics
This is what the “libertarian moment” speaks to in ways its critics do not fully appreciate. The Millennial generation has not yet achieved a coherent political narrative, in part because the experiences of the older and younger Millennials are so different. For those born in the 1980s, social media has largely been a professional phenomenon – others were making YouTube videos when they were twelve. For some, 9/11 was a defining moment; for others, a vague memory, and the deaths of their friends all the more nonsensical. Some feel betrayed by Obama’s broken promises about the economy; others have never known an economy that was better than this.
You see that in the recent Reason-Rupe YouGov survey on Millennial attitudes toward politics, which indicates the degree to which they are struggling with this reality. While Millennials may endorse the general vague idea that cutting taxes and regulations and increasing government efficiency would help the economy, a majority are also completely opposed to basic policy aims of fiscal conservatives. According to the poll, 57 percent of Millennials say they favor a smaller government with less services… but 74 percent think it’s government’s job to feed and house every single person in the country. (So the 57 percent is basically lying: they want less services only in the sense that those services don’t go to a sympathetic group.) As for other policy positions: 71 percent of Millennials favor raising the federal minimum wage to 10.10 an hour and 68 percent favor a government-mandated “living wage”; 69 percent say it is government’s responsibility to provide everyone with health care insurance (though only half approve of Obamacare); 66 percent say raising taxes on the wealthy would help the economy; 63 percent say spending more on job training would help the economy; 58 percent say the government should spend more on assistance to the poor even it means higher taxes; 57 percent favor spending more money on infrastructure; and 53 percent want government to guarantee everyone in America gets a college education.
Needless to say, this is not Rand Paul’s fiscal agenda, or even Chris Christie’s. The majority of Millennials may claim they would support a fiscally conservative and socially liberal candidate: the problem is that they’re describing Hillary Clinton. That’s why the “libertarian moment” is also about more than just ditching social conservatism. If a mere nine percent more Millennials are self-identified fiscal conservatives compared to the number of social conservatives, becoming socially liberal doesn’t help you much at all. And these two questions alone put the lie to that social liberal/fiscally conservative message: “Government should promote traditional values in our society: 38% Government should not favor any particular set of values: 47%” vs. “Government regulation of business is necessary to protect the public interest: 46% Government regulation of business usually does more harm than good: 37%”.
Now, this could change as Millennials get older – or, rather, as they grow up, which is a different proposition entirely – and get married, and buy houses, and have kids (something they have delayed to a greater degree than prior generations, for both economic and social reasons). And as I said, I’m absolutely convinced there’s a higher percentage of libertarians in this generation and a rising skepticism about government which animates a not-insignificant portion of Millennial voters, and a higher portion than in prior generations. But what this poll indicates is the potential danger for Millennials who have not heard an alternate message about government and its promises and its relationship with us. This lack of an alternative message is entirely in the interest of the progressives and the Administrative State, of course: it was not enough that birth control was cheap and accessible everywhere – it must beguaranteed as a human right. Think of James Poulos’s Pink Police State as the logical end of SandraFlukism: what is government but the thing that keeps us safe, warm, and happy? What is the price of tampons but a patriarchal tax on femininity?
The Millennial motivation to provide equality for all can have a solution in more freedom or in more government. This “moment” could turn into something that accepts the permanent atomization of individuals via the Pink Police State model or something similar (see Mexico’s societal breakdown and acceptance of a Hobbesian leviathan as noted by Jorge Castañeda) – which trades individual freedom for the government guarantee of health and safety by new agencies and powers – or one which empowers individuals by returning to them power seized by the Ruling Class and the Administrative State.The Hopefulness of Liberty
Our future politics is going to depend on this decision: whether we reject the solution of the state and instead turn with confidence toward the natural communitarianism of freedom. This is the case for liberty and federalism based on an understanding of the value of self-government, that the best policy is locally grown in your community, made for you and by you, not by the Ruling Class or the Administrative State, not by the elites of Wall Street or the Ivory Tower or the Beltway Bureaucrats who actually run things.
Alexis de Tocqueville wrote frequently about the challenge of the atomized populace in a democracy, bereft of the ordered understanding of aristocracy, and he was clear on what offsets it: “Local freedom, then, which leads a great number of citizens to value the affection of their neighbors and of their kindred, perpetually brings men together, and forces them to help one another, in spite of the propensities which sever them.” The question we don’t have any kind of answer for yet is how a generation totally immersed on online life as the definition of community will come to understand and define all of these terms. But there are positive signs. One of my favorite Millennial writers, Gracy Olmstead, cites this Tocqueville quote and compares the civil society of the past to the farmer’s market of today:
So where do we congregate? How can we gather across party lines, in a way that helps us flourish as a community? How can we rebuild the “severed chain”? There probably isn’t one perfect answer—there are a variety of associations that, hopefully with time, will begin to cultivate a wider array of community attention and support. One hopes that churches will discover new ways to build rapport amongst their communities. Maybe tools like Facebook can actually draw citizens back to town meetings and civic involvement, by connecting them in a way they understand and identify with.
But when I attend the Saturday market—eat my breakfast alongside newfound friends, buy heirloom tomatoes and homemade granola at Becky’s recommendation from other vendors, pet friendly dogs and admire newborn babies—I get a taste of a community that I once thought was fading, something that seemed antiquated and rare in modern society. I wonder whether the private associations of the future may look different from the ones of our past. But that doesn’t mean they’re going extinct—we just have to look for them, nurture them, and even sacrifice our own comforts to keep the rituals alive.
Now, libertarian political scientist Charles Murray may have a reply to Gracy Olmstead on this front. Who goes to farmers markets, after all? Who has thus far navigated the reality of Ruling Class and Administrative State governance and found new ways of expressing and maintaining communitarian bonds? To put it bluntly: upper class white Americans. Why is this? Because, as Murray has noted for years, the problem of the nanny state is that rich and talented people can still find ways to pursue happiness and live lives of meaning without church, neighborhood, family and kids, and the other traditional outlets. They are happy to leave the lower classes to their better Soma, engulfed and managed by the Administrative State, so long as they can pursue their own ends.
The warning of responsible conservatives against the libertarian moment is that this movement will perpetuate and reinforce the current stratification and bifurcation of “coming apart.” Imagine a decade from now, when rich cognitive elites are still marrying like Ozzie and Harriet and communitying it up like Little House on the Prairie with a Tesla while the unwashed masses sit in Walmart parking lots at midnight on the first day of the month waiting for their food stamp debt cards to replenish (with Citi taking their cut, of course!), with doors locked, afraid of being jumped on the way back to the car. There will be many words to describe such a moment, but “libertarian” will not be one of them.
That’s why the connection between federalism, localism, civil society and personal happiness is so important, something that the Founders understood. Even though Americans’ lives were locally based, they were grateful for a national government that enabled them to enjoy lives like that. As Murray notes in In Pursuit of Happiness and Good Government, just as food is a resource necessary to meet the human need for nourishment, challenge is a resource to meet the human need for happiness. The Administrative State seeks to remove this challenge, as they do all challenges, from life, and in doing so inculcate an understanding of the relationship between the citizen and the state which leads to an unending series of damaging outcomes. For the high school graduate trying to find a job who discovers government will pay him not to work, gives his girlfriend and his child money and housing, and treat his public education as a disability, it’s not surprising how his life will turn out. And the Ruling Class and Administrative State are perfectly content with that.
This is the last thing the critics of the “libertarian moment” are missing: that this is a fundamentally hopeful message, based on a higher view of what free communities can achieve in the absence of the Administrative State. This massive generation has more individuals friendly to liberty and also more who are open to socialism. If the progressive view prevails, the “libertarian moment” will only be a moment – it will be crushed by the call by a permanently atomized people for government mandated equality via the Administrative State, at the behest of the Ruling Class. But if the view that favors human liberty prevails, it will be more than a moment – and we could be on the cusp of an amazing resurgence of the very values that made America exceptional in the first place. David Frum believes that the rise of libertarianism amounts to an expression of hopelessness and despair on the part of conservatives, that it amounts to surrender in the battle over “competing to govern the state”. No, it’s not – it is merely an acknowledgement that the policies he favors have failed, and that the next generation would rather try something different. It is driven by an understanding that as dangerous as it sounds, there is nothing better than when free people govern themselves.
[First published at The Federalist.]
Americans are obsessed with fat; either with eating it or being it. We’ve been told that we’re too fat and we’re told that eating fat is bad for you. Being fat is your own business. You’ll feel better if you lose a few pounds, but you will enjoy your next meal if it has a fat content rather than being a bland cereal…which explains why so many cereals today have some sugary covering or content.
The fact is you can eat almost anything you like and remain a healthy weight if you just don’t eat too much of it. It’s not rocket science.
For politicians, however, controlling what we eat has become an obsession. A demented Democratic Representative, Rosa DeLauro, from Connecticut, has proposed a bill—the Sugar-Sweetened Beverages Tax Act—SWEET for short, that would penalize people one-cent for every teaspoon of sugar used in their drink of choice. It’s none of her business, let along the government’s, what you want to drink.
This obsession with what we eat has been personified by First Lady Michelle Obama who championed the 2010 Healthy, Hunger-Free Kinds Act that overhauled nutrition standards affecting more than thirty million children in schools around the nation.
It authorized the U.S. Department of Agriculture to set standards for all food and beverages sold during the school day. The law includes vending machines, snack cards, and daytime fundraisers. That now means that campus bake sales, the most popular fundraiser, now has to pay heed to a federal law that forbids selling cakes, cupcakes, or cookies.
Laws like this are a perfect example of how intrusive into the ordinary lives of Americans of all ages are laws that are slowly killing the concept of personal choice and personal freedom. They also demonstrate how wrong such laws are when they are written and passed by people who are clueless about nutrition.
A recent Gallup poll on “consumption habits” revealed that “Nearly twice as many Americans say they are actively trying to avoid fat in their diet (56%) as say they are actively avoiding carbohydrates (29%). However, fewer Americans are avoiding fat now more than a decade ago.”
Over the years as a book reviewer and avid reader, I have read “You Must Eat Meat” by Max Ernest Jutte, MD and Frank Murray, and “The Cholesterol Delusion” by Ernest N. Curtis, MD. Both books authoritatively debunk what Americans have repeatedly been told about meat and cholesterol, but my earliest advisor on these and other food related topics was Rebecca Caruba,my Mother, who taught gourmet cooking for three decades in local adult schools and who authored two cookbooks. She was a keen student of nutrition and early on warned students against margarine, telling them to use real butter and to enjoy all manner of meats, cheeses, and other foods we are constantly told are not good for us.
At this point I want to add Nina Teicholz to the list of heroes like my Mother and the authors of the two books mentioned above. A skilled journalist, she has written a 479-page book, “The Big Fat Surprise: Why Butter, Meat, and Cheese Belong in a Healthy Diet” ($28.99, Simon & Schuster). The fact that it includes nearly 140 pages of tiny, single-spaced notes regarding every detail in the book tells you why it took some nine years to write it.
Simply stated, everything Americans think they know about our diets is wrong, the result of a deliberate campaign to convince us that eating fat is bad for us when, in fact, creamy cheeses and sizzling steaks are the key to reversing the obesity, diabetes, and heart disease that affect too many Americans.
As William Davis, MD, author of “Wheat Belly: Lose the Wheat, Lose the Weight and Find Your Path Back to Health” said, “A page-turner story of science gone wrong…Misstep by misstep, blunder by blunder by blunder, Teicholz recounts the statistical cherry-picking, political finagling, and pseudoscientific bully that brought us to yet another of the biggest mistakes in health and nutrition, the low-fat and low-saturated fat myth for heart health.”
The myth began in the 1950s with Ancel Benjamin Keys, a biologist and pathologist at the University of Minnesota. He was searching for the causes of heart disease. The nation was extremely fearful about it and the heart attack that President Eisenhower had while in office only added to their fears. Keys concluded that cholesterol was a major factor, but as Teicholz points out “It is a vital component of every cell membrane, controlling what goes in and out of the cell. It is responsible for the metabolism of sex hormones and is found at its highest concentration in the brain.”
Keys and other researchers, however, noting that cholesterol was the primary component of atherosclerotic plaques, assumed it to be “one of the main culprits in the development of coronary disease…This vivid and seemingly intuitive idea,” says Teicholz, “has stayed with us, even as the science has shown this characterization to be a highly simplistic and even inaccurate picture of the problem.” Keys would devote his life to advocating his misinterpretation of cholesterol and fat.
The problem with the word “fat” is that it has two very different meanings. One is the fat we eat and the other is the fat on our bodies. A book worth reading is “Fat: It’s Not What You Think” by Connie Leas, published in 2008 by Prometheus Books. As Ms. Teicholz notes, “A large number of experiments have since confirmed that restricting fat does nothing to slim people down (quite the reverse, actually), yet even so, the idea that there could be such a thing as ‘slimming fat’ will probably always seem to us like an oxymoron.”
I know that few will read Ms. Teicholz book, but you will surely welcome knowing that “saturated fat has not been demonstrated to lead to an increased risk of heart attacks for the great majority of people, and even the narrowing of the arteries has notbeen shown to predict a heart attack.”
The problem for all of us is that the American Heart Association and the National Institutes of Health both adopted the incorrect analysis of Keys et all, institutionalizing the diet-heart hypothesis and thus are setting the nutrition agenda.
My Mother cooked the most wonderful meals every day and more so on Sundays. She lived to 98 and my Father to 93, eating all manner of meat dishes along with fish and other choices. We all ate cheeses with gusto. And, yes, we loved pasta and Mother’s fabulous home baked breads and desserts. I am coming up soon on age 77 and my diet reflects what kept them alive and disease-free for all of their years.
If you or someone you know is seriously obsessed with their weight and health, recommend “The Big Fat Surprise” to them. I recommend it to you!
© Alan Caruba, 2014
[Originally published at Warning Signs]
Peter Blair has a piece at The American Interest on the anti-statist alliance that wasn’t. It’s worth a read:
Perhaps sensing an opportunity, social conservatives have used these libertarian fears to make the case for strengthening local communities. They argue that the disappearance of strong neighborhoods and towns created a void into which the overbearing hand of the state has entered. In this way, a roughly overlapping vocabulary of concerns has developed between the two groups. … Social conservatives are right to point out that traditional forms of social trust and community have eroded. There is a real sense of loss and tragedy to all this. But one shouldn’t let a desire to construct a bigger tent for Americans concerned about the growing power of the state lead one to the unwise conflation of two different views of human flourishing.
I am not convinced by Blair’s argument, which strikes me as premature. The overlap of civil libertarianism and the modern libertarian and federalist perspective on limited government is not merely due to shared vocabulary, but to an increasingly shared perspective on the encroachments of life under the ever-expanding scope of a nationalized and unrepresentative government. People with a shared understanding of government’s outsized power can absolutely be at odds over what a good American life looks like. City mice and country mice can both love liberty and understand the appeal of local government over the rule of distant administrators.
Today, progressives want everything locally grown except government. Why is this? In part, it’s because self-government proves the failure of the Administrative State. As a rule, responsible self-governing neighborhoods and communities thrive and foster virtues which lead to close-knit communities and strong civil institutions. Ideally, they turn into little Lake Woebegons, where all the women are strong, all the men are good looking, and all the children are above average. The urban elites may mock the little pink houses with their picket fences, the soccer moms making grocery runs in the SUVs, the Vacation Bible Schools … but these are the communities where people actually live good wholesome American lives. The stronger these communities are, the more they form a hedge against the encroachments of government.
Consider the death of the suburbs, which has been predicted eagerly (and inaccurately) by the left for decades. Today just one out of ten Americans live in a square mile of more than 10,000 people. And while just a third of Millennials are the heads of their own households and only 1 in 4 are married, they overwhelmingly say that they want to get married and have a family – 70% for men and 78% for women. The desire of Millennials to own their own home is actually stronger than prior generations. And having a kid accelerates that desire even more, with the cohort with young children the likeliest to move to the suburbs or to small towns. Why is this? Because of the incentives of economy and community – the obvious benefit of neighborhood and homeownership and good schools and churches and community. Many Millennials won’t choose this life, but many more will. The presence of Yelp does not eliminate the lure of this approach.
The progressive left and the technocratic right want the whole world to look like the political machines they know and love. They cannot tolerate the idea that self-governing communities outside their approach to dealmaking and spoils-centered politics could give people an attractive alternative. That’s why it’s so essential to them that the major decisions about our economy, policing, health care, education, transportation funding, and more be made in Washington, where the order they seek to impose on people’s lives can be dictated by administrators beholden to no one except the stakeholders, the political and business interests who have a seat at the table.
The appeal of the self-governing community, which can decide for itself what is encouraged or discouraged, what is banned or made legal, is one directly at odds with this approach. The issue is not whether we all agree about the definition of the life well-lived. The issue remains, as Ronald Reagan framed it a half-century ago, “whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can plan them ourselves.”
[First published at The Federalist.]
Over the past decade, we’ve witnessed a decline in the level of trust in government, and a rise in distrust, to levels unprecedented in American history. But to think this is an entirely new phenomenon is a mistake: trust in government has steadily declined since the Great Society and the Vietnam War under Lyndon Johnson.
This graph from Pew with data running through the fall of 2013 shows how people answer the question: “How much of the time do you trust the government in Washington?” The answer is pretty clear: not much at all.
There are many reasons that this phenomenon has accelerated despite the promises of one presidential candidate after another to restore our faith in government. But there is one reason in particular which runs through the political stories of the past year – the IRS scandals, the unanticipated failure of Obamacare’s implementation, the broad expansion of the administrative discretion and “the-secretary-shall” lawmaking, executive actions on amnesty and DACA, deleted emails right and left, and, most recently, the indictment of Texas Gov. Rick Perry for vetoing funding for a unit of legal bureaucrats after it became obvious they were headed by a drunk driver who refused to resign. On the whole, it presents a picture of how far the Administrative State is willing to blatantly ignore any checks on their ability to enact their whims.
Government has always been frustrated by any checks on their power. The Founders believed that you can check that power with the mob, either democratic or anarchic, for only so long before government would turn to despotism. So their solution was to deliberately balance the forces of power against each other, to tie the governors’ hands via limited, enumerated powers of national government. The Constitution made the action of government – in nearly all areas outside of waging war – deliberately difficult, and that was on purpose. It was supposed to be hard to pass new laws, not because the Founders were opposed to new laws, but because they wanted to make it impossible for those laws to oppress the people.
What the Founders did not anticipate was the degree to which those invested by the Constitution with the power to make law would find it politically advantageous over the course of a century to steadily cede their power to unelected governmental bodies of vast size and with an ever-enlarged mission. Representative government, it turns out, is very difficult. Better and wiser to shift the responsibility for such decisions to someone else – to tell the frustrated citizen that it is beyond your control to address their concern, and isn’t there an agency for that? This new unchecked branch of government has seized the power it wants along the way: the power to reward friends and grant waivers and special privileges to people and firms who they like or who play by their rules, to abuse their power in the course of punishing those who they don’t, the power to live large and cover up mistakes without that difficult legislative process.
That’s why they are so willing to go to such great lengths to hold on to their jobs. When bad things happen in the real world, heads roll. But in the world of the Administrative State, resignation is the worst possible thing you can demand of someone. So political appointees are given taxpayer funded vacations, cops who break the law are put on leave, and district attorneys who drive out-of-their-minds drunk demand they keep their job. Life in the bureaucracy is too sweet to lose, no matter what – and those who hold those positions know how good a deal they have and won’t give it up under any conditions.
What we’re talking about here is really just human nature, of course. Government employees want just what everyone else wants. The only difference is they think they have the power to make good on their whims. Consider this the right’s corollary to the Green Lantern theory of the presidency. In the era of the Administrative State, big government has been giving out too many rings to too many would-be Sinestros. And when it comes to trust in Washington, it’s the fact that this power is centralized in the Administrative State, rather than localized via federalism, which creates the special class of modern ringbearers. It allows them to work together in common purpose, as the progressives intended, as opposed to balancing and checking each other, as the Founders always understood to be essential.
The progressive view that checks and balances must be eliminated, that things should be organized by wise neutral administrators and we should just make things easier for the government to get things done (even Nuclear Option style), is motivated by the belief that the government can then make things a lot better for the people. But of course, in reality, the Administrative State is most interested in making things better for the people in government. And that’s where little things like trust start to break down.
[First published at The Federalist.]
On June 2nd of this year the Obama administration announced new regulations from the Environmental Protection Agency (EPA) with a goal of reducing carbon emissions over the next 15 years. These goals as outlined by the EPA in the Clean Power Plan impose significant restrictions on power plants already in existence, even natural gas plants. Power plants are cited by the EPA as the largest source of carbon pollution in the U.S., accounting for roughly on-third of all domestic greenhouse gas emissions.
The reasons given by the EPA for its new regulations are in keeping with blaming man’s emission of CO2 as the cause for runaway global warming, yet the global temperature has remained flat over the past 17 years. History tells us that natural climate variability has happened over the centuries; i.e. the Medieval Warm Period was warmer than today. In 2009 some prominent alarmists are on record saying that if temperatures remained flat for 15-20 years, the scientific community needs to re-evaluate the theory. Three years later in 2012 a report in the UK Daily Mail revealed the following from a quietly released Met Office report:
The figures reveal that from the beginning of 1997 until August 2012 there was no discernible rise in aggregate global temperatures
- This means that the ‘pause’ in global warming has now lasted for about the same time as the previous period when temperatures rose, 1980 to 1996
It’s 2014 and we’re now near the twenty-year time frame to re-evaluate the theory of global warming, but will it be possible to stop the new EPA regulations with the powerful force of government behind them?
According to the EPA, its Power Plan proposal will put Americans to work, make the U.S. electricity system less polluting and our homes and businesses more efficient, and shrink electricity bills by 8% in 2030. If this sound too good to be true, it is! According to an article by Katie Pavlich, “What you need to know about Obama’s new EPA regulations,” the regulations will negatively impact the economy in the following ways:
-New regulations will kill 226,000 American jobs.
-New regulations will cost the U.S. economy $51 billion per year.
-Even with new regulations, carbon is only expected to decrease by 1.8 percent by 2030.
-Despite EPA claims new regulations will reduce the cost of power, electricity rates are expected to go up, as coal-fired plants, the dominant source of cheap power, shut down in response to environmental regulations, further making new coal power plants impossible to build.
Later this year the EPA will decide whether it should tighten the air-quality standard for ground level ozone. In 2008 the EPA set ozone standards for air quality at 75 parts per billion (ppb). Even before states have fully implemented the 2008 standards, the EPA is expected to propose revising it to as low as 60 ppb. A new study for the National Association of Manufacturers by NERA Economic Consulting, finds that “the new ozone standard could cost Americans $170 billion annually, put millions of jobs at risk, and drastically increase energy prices for consumers and manufacturers.”
The Heartland Institute is circulating a “Citizen’s Petition to Rein in the Environmental Protection Agency.” You can read and sign the online petition below, download a hard copy of the petition, or contact The Heartland Institute at 312/377-4000 and ask that a petition be sent to sign, or for multiple copies to distribute to your family and friends.
Thorner first learned about Heartland’s call to action petition to reign in the EPA when receiving it as a handout at the The Ninth International Conference on Climate Change which took place from July 7-9, 2014 in Las Vegas. Some 650 scientists, economists, policy experts, and guests attended the ICCC9 conference, all willing to question whether man-made global warming is a problem worth addressing. The ICCC9 schedule can be viewed here. Videos (and PowerPoint presentations, when available) from every presenter can be seen here.
The nine statements in The Heartland Institute’s petition are capsules of knowledge gained through hard scientific data and observations as documented through published reports by the NIPCC (Nongovernmental International Panel on Climate Change), which counter the reports put forth by the IPCC (Intergovernmental Panel of Climate Change). Given the devastating consequences of the proposed EPA regulation, an urgency exists for deep cuts in the size, power and cost of the EPA. Below are the nine petition statement, each of which is proceeded by “Whereas”:
1. For decades an unprecedented campaign has been waged to scare the American people into believing their health, safety and even survival was at stake because of manmade global warming.
2. We were told that CO2, which makes up less than one-half of one-tenth of one percent of our atmosphere, is acting like a blanket, keeping the heat in, and it was going to cause the baking of the Earth.
3. The hard scientific data now show that the predicted rise in global temperatures just plainly did not happen.
4. Sea ice in the Arctic is rebounding and continues to expand in the Antarctic, despite predictions of the opposite, polar bears are thriving, and sea levels are not rising.
5. Deaths due to extreme weather are radically declining and global tropical cyclone activity is at near record lows.
6. It is now clear that the global warming alarmists are wrong and a large majority of Americans now understand it was a hoax. It’s false that man reducing CO2 emissions — especially the U.S. virtually alone — will have any effect on the global temperature.
7. Regulators at the EPA, having lost their war to scare America into giving them legislation that would allow them to seize control of virtually all energy production and use, are perverting the Clean Air law to give themselves unprecedented powers to regulate American society.
8. The toll the EPA is now taking on this country is staggering, putting hundreds of thousands of Americans out of work.
9. The only way a new president or a new Congress will undo the terrible damage being inflicted by the EPA after the election is if we make it a major issue NOW, BEFORE THE ELECTION, so that after the election even those who support the EPA’s reckless regulations will understand it is political suicide to support them.
First revealed at The Ninth International Conference on Climate Change in Las Vegas in July, was a plan by Jay Lehr, Ph.D, science director at The Heartland Institute to replace the EPA. Dr. Lehr’s plan, “Replacing the Environmental Protection Agency,” was posted on July 15 at Heartland as a policy document. Click to read the full text of this document59.97 KB
In Congress Rep. Vicky Hartzler (R-Mo.) has called for legislation that would ban the EPA from issuing rules through the proposed EPA’s Waters of the United States program, which would wreak havoc on farmers and possibly drive up food prices.
The E.P.A. says the new rules are needed to clarify which bodies of water it must oversee under the federal Clean Water Act.
The EPA has outlived its usefulness. Don’t delay by downloading and signing The Heartland Institute petition as a citizen concerned about the overreach of the EPA and its proposals which point to economic disaster for this nation.
When Rachel Carson’s book, “Silent Spring”, was published, filled with totally false claims about DDT, the Environmental Protection Agency looked it over and concluded she had used manipulated data. They concluded that DDT should not be banned, but its first administrator, William Ruckleshaus, overruled the agency and imposed a ban.
Ruckleshaus was a lawyer, not a scientist. He was also politically connected enough to hold a variety of government positions. He got the nod for the EPA job from John Mitchell, Nixon’s Attorney General who later went to jail for his participation in the Watergate cover-up.
Wikipedia says, “With the formation of EPA, authority over pesticides was transferred to it from the Department of Agriculture. The fledgling EPA’s first order of business was whether to issue a ban of DDT. Judge Edmund Sweeney was appointed to examine the case and held testimony hearings for seven months. His conclusion was that DDT “is not a carcinogenic hazard to man” and that “there is a present need for the essential uses of DDT”. However, Ruckelshaus (who had not attended the hearings or read the report himself) overruled Sweeney’s decision and issued the ban nevertheless, claiming that DDT was a ‘potential human carcinogen.’” In 2008, having returned to the practice of law, he endorsed Barack Obama.
I cite this history from the 1970s because most people believe that the EPA operates on the basis of science and, from the beginning, that could hardly have been less true. It has evolved over the years into a totally rogue government agency issuing thousands of regulations with the intent to control virtually every aspect of life in America, from agriculture to manufacturing, and, in the case of pesticides, the effort to ban them all, always claiming that it was to protect public health.
Not killing pests, insects and rodents, is a great way to put everyone’s health in jeopardy. New York City announced a new war in May against rats and will spend $600,000 to hire new inspectors to deal with an increased population. Lyme disease and West Nile Fever are just two of the diseases that require serious insect pest control. A wide variety of insects spread many diseases from Salmonella to Hantavirus. Termites do billions in property damage every year.
Thanks to the EPA ban on DDT and the nations that followed the USA action, an estimated 60 million people have died from malaria since 1970 because it was and is the most effective way to control the mosquitoes that spread it, particularly in Africa. In the West, malaria had been eliminated thanks to the use of DDT before the ban.
In the 1980s I worked with the company that produced an extraordinary pesticide, Ficam that was applied with nothing more than water. Although it had gone through the costly process of securing EPA registration, the agency told the manufacturer it would have to do so again. Because the cost could not justify re-registration it was taken off the market in the USA, but continues to be used successfully for malaria control in more than sixteen nations in Sub-Saharan Africa and against the spread of Chagas, a tropical parasitic disease in Latin American nations. Ficam can be used to control a wide variety of insect pests. But not in the USA.
In 2000, the EPA, during the Clinton-Gore administration, announced that “a major step to improve safety for all Americans from the health risks posed by pesticides. We are eliminating virtually all home and garden use of Dursban—the most used household pesticide in the United States.” It was widely used because it did a great job of controlling a wide variety of insect pests, but the EPA preferred the pests to the human species it allegedly was “protecting.” The ban was directed against chlorpyrifos which the EPA noted was “the most commonly used pesticide in homes, buildings, and schools.” It was used in some 800 pest control products.
Recently I have been receiving notices from Friends of the Earth (FOE) announcing “a new effort to help save bees. “We need to ban bee-killing pesticides now!” says one of their emails, claiming that “A growing body of science shows that neonicotinoid (neonic) pesticides are a key contributor to bee declines.” This is an outright lie. As always, FOE’s claims are accompanied by a request for a donation.
Dr. HenryI. Miller, a physician and molecular biologist, a fellow at Stanford University’s Hoover Institution, was a founding director of the FDA’s Office of Biotechnology. Recently he disputed the White House’s creation of a Pollinator Health Task Force and a directive to the EPA to “assess the effect if pesticides, including neonicotinoids, on bee and other pollinator health and take action, as appropriate.” This is the next step—a totally political one—that will deny one of the most important pesticides to protect crops from being used. “This would have disastrous effects on modern farming and food prices,” warns Dr. Miller.
“Crafted to target pests that destroy crops, while minimizing toxicity to other species, neonics,” said Dr. Miller, “are much safer for humans and other vertebrates than previous pesticides…there is only circumstantial or flawed experimental evidence of harm to bees by neonics.”
“The reality is that honeybee populations are not decline,” noted Dr. Miller, citing U.N. Food and Agricultural Organization statistics. If anything is affecting bee populations worldwide it is the increasingly cold weather than has been occurring for the past 17 years as the result of a natural cooling cycle which is the result of less solar radiation from the Sun. The other threat to bee is Varroa mites and the “lethal viruses they vector into bee colonies.”
“A ban on neonics would not benefit bees, because they are not the chief source of bee health problems today.
But the Friends of the Earth who are no friends of the humans that live on it want to ban neonics and it is clear that the White House and the EPA are gearing up, for example, to induce a major reduction in crops such as Florida’s citrus industry which is subject to the Asian citrus psyllid, an insect that spreads a devastating disease of citrus trees. Other food crops are similarly affected by insect pests and the end result of a ban would severely damage the U.S. economy.
In every way possible the environmentalists—Greens—continue to attack the nation’s and the world’s food supply and the result of that will kill off a lot of humans. The EPA’s pesticide bans are not about protecting health. They are an insidious way of increasing sickness from an ancient enemy of mankind, insect and rodent pests.
© Alan Caruba, 2014
They either have absolutely no idea what any of this is – or they are lying through their printing presses.
The Times calls for the federal government to illegally commandeer control of the entirety of the World Wide Web – so as to then impose Net Neutrality. Guess with whom they are in agreement?
The hardcore Media Marxist Left wants President (Barack) Obama’s Federal Communications Commission to unilaterally change – for the worse – how the government regulates the Internet. Which would be an egregious violation of existing law – the 1996 Telecommunications Act.
This law classified the Internet as Title I – a very light-touch regulatory regime. As happens when the government largely leaves something alone, the Internet has become a free speech, free market Xanadu. Arguably no endeavor in human history has grown so big, so well, so fast.
If ever there was an example of “if it ain’t broke, don’t fix it” – this is it. Yet the perpetually broken government is listening to these Leftist loons – and considering the move to Title II.
Title II is the uber-regulatory superstructure with which we have strangled landline phones – you know, that bastion of technological and economic innovation. Which do you find more impressive – your desktop dialer or your iPhone?
Title II regulations date back to the 1930s – so you know they’ll be a perfect fit for the ultra-modern, incredibly dynamic, expanding-like-the-universe World Wide Web.
This would be the most detrimental of all Information Superhighway road blocks. Rather than the omni-directional, on-the-fly innovation that now constantly occurs, Title II is a Mother-May-I-Innovate, top-down traffic congest-er.
Imagine taking a 16-lane Autobahn down to just a grass shoulder.
The Times’ editorial wrongness begins in their title.
There will be no “fast lanes.” There will be what there have been since just about the Internet’s inception – innovative ways to make uber-bandwidth hogs, like video merchants, easier to deliver. Which keeps the traffic for everyone flowing smoothly.
The Web would have long ago ground to a halt had not these innovations been developed and continuously enhanced. The bandwidth hogs are looking to have the government mandate that the Internet Service Providers (ISPs) build, maintain and grow them – and give the hogs free, unlimited access.
Guess who would then get to pick up that gi-normous, ever-growing, ongoing tab? Hint: You saw him or her this morning brushing your teeth.
The Times then gets the first half of their very first sentence wrong.
The Federal Communications Commission, which could soon allow phone and cable companies to block or interfere with Internet content,….
Actually, ISPs have always and forever been able to do that. But they haven’t. Why? Because they are in the customer service business – if they intentionally fail to service their customers, they will no longer have customers.
It’s called the free market, Times. You should look into it – instead of looking to end it.
And there are already existing laws and an existing government entity – the Federal Trade Commission (FTC) – to address this if it ever does happen. Which it won’t.
The F.C.C. is trying to decide whether telecommunications companies should be able to strike deals with powerful firms like Netflix and Amazon for faster delivery of videos and other data to consumers.
As Amazon grew and their package tally exponentially increased, it didn’t demand the various delivery services keep their shipping rates exactly the same. That would be absurd.
And I’m sure the government-run Postal Service would have been very accommodating of that request.
Small and young businesses will not be able to compete against established companies if they have to pay fees to telephone and cable companies to get content to users in a timely manner.
Small and young businesses don’t and won’t have to pay – because they are but a blip on the Internet radar screen. Netflix and Google’s YouTube are at peak times more than half of all U.S. Internet traffic – they should pay a little something, you know, for the effort.
If you leave the grocery store with twenty steaks, you pay more than if you walk around a little and leave with nothing – is that so complicated?
Tom Wheeler, the chairman of the F.C.C. who was appointed by Mr. Obama, has proposed troubling rules that would allow cable and phone firms to enter into specials with companies like Facebook and Google as long as the contracts are “commercially reasonable.”
Apparently it is, in fact, too complicated for the Times. Which wants to mandate grocery stores allow someone to fill up an eighteen-wheeler with steaks – and pay the store nothing. Which isn’t “commercially reasonable”- it is supermarket death by government.
Which is exactly what the Media Marxists want for the Internet.
“(T)he ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.”
How very Hugo Chavez of them. And, of course, the New York Times.
[Originally published at NewsBusters]
Most of us who have grown up with the Internet have watched it do amazing work. Companies that are idea-driven and whose sources of income come from “users” have even started going public with major IPOs. Whatever has been going on seems to be working. Freedom surges online; anyone can start a Facebook page, a Tumblr blog, a PayPal account, a Twitter, or a YouTube account and gain millions of followers with as little capital as a phone or a PC. Even the much ridiculed Justin Bieber was found by Usher on YouTube, where the young star is now worth $200 million—all in just seven short years.
For much of the time that this extreme growth occurred, the government was careful not to hamper innovation. The recent debate has been about the Internet Tax Freedom Act (ITFA) that is set to expire on November 1st. First created in 1998, it has been renewed three times, preventing state and local taxation of Internet access and electronic commerce. It also allows seven states who were taxing Internet access prior to the law to be grandfathered in so they can continue unabridged.
It seems at first glance that the federal government should not be telling states and municipalities what they can and can’t tax, but undue taxes naturally hinder the flow of the marketplace to begin with. Looking at current cell phone taxes provide some insight as to how Internet access taxes could look if the law expires. The national average on cell phone taxes is over 16.3%! My $80/month “unlimited everything” plan from Sprint sounds good in a Spotify ad or on a billboard, but it’s deceiving. It’s actually closer to $100 with all the extra taxes. A similar phenomenon could happen and put accessing the Internet out of reach for people who can barely afford it now.
A bipartisan group in the Senate has been working on a proposal called the Marketplace and Internet Tax Fairness Act, which would ban Internet access taxes for another 10 years, but allow states to collect sales taxes from out-of-state companies, and still allow grandfathered states to charge Internet access taxes. It is unclear whether or not sales taxes from Internet purchases would also be up for expiration after 10 years like the Internet access tax ban would be, but it seems unlikely.
Since the Internet itself has no one “location,” it would be difficult to create a simple set of tax rules for items bought and sold. Rather than make it complex and add to the mix of confusing tax policies that already dominate American life, we should continue to shop and sell unabridged from government interference. Because the Internet can facilitate private marketplace transactions easily and efficiently, profits can be spent on investments that can lead humanity further into the future. Imagine if the government taxed the Internet. They could tax individual apps, how much data you use, the words you type in an email or a blog… Considering there are state taxes that apply to altered bagels in New York, toilet-flushing in Maryland, or holiday decorations in Texas, it isn’t far-fetched that certain states would come up with odd ways to suck out as much money as they could from the Internet…and for counties and cities that have home rule, and thus, their own taxes, multiple taxes by multiple bodies of government could begin appearing.
This proposal is ludicrous, especially since we still operate under federalism. If the Internet is inherently borderless and knows no location, then it should not have any state or local tax applied to its use. Imagine the arguments between states on who should be able to tax what. Should the states that house the servers for the seller’s website get any of the revenue? How about the state where the seller lives? What about the state that the seller’s items get shipped out of? These, along with many other variables, seem not to be an option when it comes to Internet sales taxes.
When taxes are first explained to us—probably when most of us were young—they made it sound all well and good. “Taxes are used for roads and schools and to defend our country!” We repeatedly hear these statements throughout our lives. However, as we grow up, we realize how wasteful governments of all sizes are. The surplus of social security income is not kept in a nice “pot” for us to all go back and draw from (plus, it’s a forced retirement plan), and tolls we pay in most states (with exorbitant fines if you don’t pay, often marked up 1000% or more than the original price)—contrary to popular belief—do not all go to repairing and building new highways. The documented waste, tax increases, new tax proposals all keep growing and growing while the good service we’re promised for our schools and our roads and our defense continually seems neglected. Do not add Internet taxes of any kind—sales or access—to this list that will only fuel the government fire of irresponsibility and waste for decades to come.
Pro-regulation interests often resort to highly misleading arguments to advance their cause. Fortunately that kind of deception ultimately exposes the weakness of their underlying argument and public policy position.
To promote Netflix’ “strong” version of net neutrality regulation and to oppose the Comcast-TWC acquisition, Consumerist just framed a very deceptive whopper competition argument: “Comcast says mobile data is competitive, but it costs $2k to stream Breaking Bad over LTE.”
Consumerist: “Since Netflix is the driver of so much internet traffic, and the center of so many of the conversations around home broadband, TV seemed to be the way to go. The question we decided to answer is: How much will you pay for the data it takes to watch the entire series run of Breaking Bad in one month?” Consumerist’s contrived calculation was $1,200 – $2,200 for a billing cycle.
Consumerist cynically uses a classic deceptive straw man argument, hoping that most people will not catch their bogus premise that Comcast does not have broadband competition from 4 national mobile LTE OTT competitors, because it is exceptionally more expensive to binge-watch premium video programming on mobile LTE plans than it is on cable.
Let’s deconstruct this clearly unreasonable straw man argument.
First, no good deed goes unpunished. Consumerist turns the great benefit of Comcast-TWC’s high-bandwidth/usage broadband offerings that enable binge-watching of premium programming, into a problem!
Second, one can easily buy all seasons of Breaking Bad on DVD at Best Buy and other retail outlets, or on iTunes and Amazon.
Third, one can binge-watch Breaking Bad on cable or DBS — with or without a DVR. These technologies are designed, in infrastructure and economic model, to enable mass binge-watching economically.
Fourth, almost no one uses mobile LTE Consumerist’ straw man way. That’s because people know how to routinely use free WiFi to watch video on their LTE phones. Most LTE providers enable and encourage offloading high-bandwidth video content like Breaking Bad onto WiFi to more-economically manage their data usage. In addition, cable broadband providers offer their subscribers free WiFi in hundreds of thousands of spots in America so they also could binge-watch in those widely-available locations if they wanted to.
Fifth, in what common sense world is it bad for people to binge-watch video programming on technologies actually designed for viewing mass volumes of video by millions of people? Any engineer will tell Consumerist that distributing large volumes of video programming daily to many millions of people is highly economic and efficient via over-the-air broadcast, cable, or DBS technologies.
Sixth, Consumerist’s straw-man argument rests on an even more bogus straw-man core-assumption: competitors must have near identical offerings to consumers in order to be considered competitive substitutes. That is not a consumer-focused view of competition, because consumers know they have a diversity of wants, needs, demands, and means that need to be matched with a diversity of technologies, infrastructures, services, amounts, and prices. Diversity of choice, availability of innovative offerings, and robust investment are all hallmarks of dynamic market competition, and which are all generously present in America’s world-leading broadband and video distribution markets.
Lastly, Consumerist is implicitly promoting the Netflix argument for maximal broadband regulation and blocking the Comcast-TWC acquisition by assuming that the high-end markets that offer the highest prices for the most cutting-edge or market-leading services can be separated from the underlying basic mass market — for antitrust purposes. The fallacy here is similar to thinking that the market for luxury cars is separate from the market for non-luxury cars – when one can understand that the distinction of what car or feature is considered a “luxury” when the products and features in high-end markets are highly-fluid, with easily-disputed market boundaries.
In sum, apparently NetFlix, Consumerist and other broadband-regulation maximalists, need to resort to deceptive straw man arguments to try and somehow justify their extreme position for maximal broadband regulation and blocking the Comcast-TWC merger.
Importantly, one of the things that make the FCC an expert agency is that they can see through fallacious straw men arguments, and FCC-reviewing courts certainly can as well.
[First published at the Precursor blog.]
President Obama on Wednesday slightly delayed his afternoon tee time to speak about the monstrous beheading of American journalist James Foley by ISIS. It was an underwhelming address from the Leader of the Free World who finds the crown so heavy and bothersome that he puts it down aside the putting green.
In his address, Obama did well in the “sympathy-in-chief” role. I do believe that Obama is horrified and saddened, as all Americans are, about the tragic fate of James Foley. But Obama failed in his actual job — that of a leader who must express genuine and righteous anger about this act of barbarism against all people who cherish liberty.
Obama has displayed more passion and employed sharper rhetoric when talking about Republicans in Congress — who, last I heard, are not in the business of sawing off heads to make their point clear. Maybe we’ll get a better performance from our president if ISIS makes fun of the Obamacare website.
Read the whole transcript of Obama’s remarks here, but this is the excerpt that matters to me:
People like this ultimately fail. They fail because the future is won by those who build and not destroy. The world is shaped by people like Jim Foley and the overwhelming majority of humanity who are appalled by those who killed him.
Obama’s phrasing — “people like this ultimately fail” — is passive and weak. It’s akin to Obama’s frequent rhetorical tic about anyone in America who opposes his agenda being on the “wrong side of history.” It’s a throw-away line. It’s meaningless, especially from him. Our semi-retired president just doesn’t get it.
An ideology, a movement, or a nation ultimately fails because someone put them on the wrong side of history. The history-writers are the ideological victors — almost always via war. The people of those nations sacrificed many lives and much treasure to present the “right side of history,” to ensure that “people like this ultimately fail.” At the end of the 20th Century, a history in favor of liberty was written by the West, the inheritors of the Enlightenment. Despite Obama’s rhetoric, such results did not, and will not, happen passively — and certainly not because The One merely states it.
It took the West’s leadership and action to ensure the Nazis would “ultimately fail.” It took the West’s leadership and action to ensure Soviet Communism would “ultimately fail.” It was the West’s reluctance for total victory in Korea allowed the Kim clan to write their own “right side of history,” which has starved and enslaved millions of innocents. The Democrats’ betrayal of its South Vietnamese allies allowed the murderous communists to write its own “right side of history.” So far, at least, many oppressors and murderers in the world — for decades — are not counted among those who will “ultimately fail.”
And if the West doesn’t fully rise to the challenge of Islamic Fascism, centuries of Enlightenment progress for the betterment of liberty will be wiped away in a new history written by these Islamist Fascist monsters.
Two articles today show how the Internet economy tends to be like the overall economy but much, much faster. Innovation is faster, the rise of new companies is faster, and maturing and death of those firms is likewise faster than in the industrial and service sectors that preceded it and remain in place beside it.
Almost a third of smartphone users do not download any apps for their devices in a typical month, according to a report by Deloitte that predicts the volume of app store sales is hitting a ceiling.
The average number of apps downloaded on a monthly basis has decreased considerably in 2014, the firm found in a survey of people in the UK. As smartphones saturate mobile markets in the US and Europe, developers must rely on customers continuing to download new apps for their businesses to grow.
A variety of problems—including concentration of sales among a few companies and the difficulty of marketing apps in an overcrowded market—indicate that the smartphone app sector has matured and is heading down:
The number of smartphone users who do not download any apps has reached 31 per cent, a steep increase from less than fifth in a similar survey last year. For those that have, the mean number of apps downloaded has fallen to just 1.82, from 2.32 last year.
“Each additional new smartphone [owner] has less inclination to download apps, either out of apathy or, at a more global level, affordability,” Mr Lee said.
Identifying an example of a Web phenomenon that is currently on a rapid rise and hastening the pace of change in the web sector, Gene Marks notes in Forbes that a new web-based “sharing economy” is already having a huge effect and is poised to grow much bigger and have a significantly greater effect on our lives, for both good and ill:
[T]his sharing economy is going to change the world. It’s not cars or tasks or rooms or groceries. It’s data. Today’s cloud based software companies are building enormous troves of data. And the smarter ones are doing this because they see the future. And their future is sharing.
Your location is being tracked. Your purchase history is being stored. Your user profile has been collected. You are prompted to save your passwords. You are asked to confirm your personal details. You must submit an email address. You are required to provide your mother’s maiden name. Every hour more bits of data about you are being gathered, stored, categorized, and archived.
For the forward thinking software service, it’s not just about user licenses. It’s not just about selling boxes or books or tablets or shoes. It’s not merely a mobile app that lets you just buy concert tickets, listen to music or take a note. It’s about the data that’s being collected. It’s why Facebook purchased What’sApp or why Amazon recently announced it was going into the mobile payments business to compete with the likes of Square and PayPal. The current fees from these services are not what’s important. In the long term, the data is what’s important.
Noting that we are currently in only “the very early days of the data sharing economy,” Marks tells readers they shouldn’t worry about this accumulation of information about them:
We are entering a world where the trillions of terabytes of data collected by software companies will soon be put to beneficial use. This world will make them a lot of money. And in return, the world will be a better place for you and me.
Companies will use this information, Marks says, to make life easier for you, and the fact that they will make money from the process should not bother us, he argues. There is some merit to that. After all, that’s what businesses do: give you things you want in exchange for things they want (usually money); it’s a mutually beneficial process. As an example of how it works, Marks quotes David Barrett, CEO of Expensify (a mobile expense reporting service):
“When you forward a travel itinerary to us, we identify it as such and build a travel profile with flight status updates and other features. With this we know not just your past preferences, but your future plans.” . . .
“Imagine you add in another player to this scenario: the OpenTable API (Application Programming Interface ).” Barrett continued. “With this we could say ‘hey there, it’s dinnertime and you’re in a town you don’t know. There’s a great Thai food restaurant next to your hotel and Bob, another one of our users who traveled to this town, ranked this Thai restaurant 5 stars saying ‘So hot I cried!’ Do you want me to make a reservation?’ Or perhaps withGrubHub, we just order your favorite dish and have it waiting for you at the hotel. Or add in the Uber API: ‘I see you just landed, would you like a ride to the hotel? Or maybe a detour to this great Thai restaurant first?’”
“Then imagine you added a simple star-rating and review system onto the expense when you submit it. Now we have a business-travel focused Yelp, except “authenticated” via the credit card purchase (e.g. no reviewing someplace you didn’t go) and “weighted” by how much you spent there (someone who spends $100 should be more trusted than someone who spent $10).”
Later in the article, Marks quotes Barrett extending the example further:
“Want to get really crazy? How about: ‘Hey, this is a bit weird, but there’s another business traveler nearby in town for a bit who loves Thai food as much as you do, and I see from her calendar that she’s free; would you like to meet up at Bob’s favorite Thai place for some curry? If this isn’t your thing, let me know and I’ll never mention it again.’”
As that somewhat tongue-in-cheek but ultimately serious and plausible example shows, the personal-data-sharing economy is beginning to hit its economic prime years, as the technology could indeed be powerfully useful to consumers. We’ve gotten used to amazon.com and other online retailers making recommendations based on our past buying and browsing habits, and there is nothing different in kind about the advanced sort of data-sharing Marks and Barrett describe.
There is a big difference, however, between this kind of economy and conventional economic transactions. In the latter, the exchange is a straightforward trade of goods and services for money, which is merely a means of purchasing the former. In a personal-data-sharing economy, the exchange is, on the surface, strictly of information: the consumer lets the business collect his data, and the business then sells that data to other businesses or uses it itself to generate more business from that consumer and others. The consumer then gets information—about restaurants, transportation options, and even potential companions—in return for letting their data be mined.
The exchange, however, seems to give a much greater amount of power to the business than to the consumer, as is evident in the example of the dating recommendation cited above. When strangers are able to make dating recommendations without even being asked, they clearly have a good deal more power than the individual consumer in such a transaction. Such power could, as Marks notes, do much good. I am far from convinced, however, that most independent-minded people would prefer to live in such a world.
It appears, of course, that we probably won’t have much choice in the matter. Nonetheless, the example of the smartphone apps, noted above, may provide some hope for those who prefer privacy over convenience. In addition, widespread problems tend to bring forth commercial available solutions, which seems likely to happen in regard to the personal-data-sharing economy. To paraphrase Mark Twain, the reports of the death of privacy may have been greatly exaggerated.
[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. Read the first part of this series here. This piece was first published at The American Thinker.]
Children today are much more comfortable using information technology than are those of previous generations. Many grow up playing video games offering strong visual and audio stimulation, instant feedback on decisions, and nonfinancial rewards for achievement, such as winning competitions, accumulating points, and being able to move to the next level of a game. The popularity of such games confirms what parents and good teachers know instinctively: children can acquire knowledge and learn new skills at seemingly phenomenal speeds when they are fully engaged in the learning experience.
Technology applied to learning, also known as digital learning or online adaptive instruction, has vast potential to transform schooling. Either by itself or “blended” with traditional classroom teaching, digital learning is building a record of results substantially superior to traditional teaching and potentially far cheaper when used on a large scale.
Online adaptive instruction can provide in one package the goals, activities, tests, and incentives needed to accelerate student learning. Students receive feedback as they move through a set of activities that the program customizes to their individual abilities. Many programs utilize algorithms grounded in psychological research on common errors students have made in face-to-face settings. Such research makes it possible to offer detailed cues for what to do next and prompt the user to move on to more difficult levels, or to repeat a lesson, perhaps from another perspective, when appropriate.
While there are obstacles to the spread of digital learning, cost is not one of them. The per-pupil costs of online schooling, which requires fewer teachers, have only recently been compared to that of traditional classroom instruction. According to a study by the Thomas B. Fordham Institute, full online learning on average costs about $4,300 annually less than traditional schooling, while the blended model saves about $1,100 per student per year . These cost savings are likely to increase over time as the technology improves and as educators gain experience in its use. Requiring nine rather than 12 years of schooling would reduce costs substantially more.
Digital learning is spreading quickly as parents, students, and educators recognize its transformative potential. Some obstacles need to be overcome, such as certification requirements that block entry into the teaching profession by talented and motivated individuals, seat-time and class-size requirements that make school schedules rigid and unable to accommodate computer lab sessions, and opposition from teachers’ unions . A rapidly growing community of educators with experience using digital learning tools and literature describing best practices are available to reformers who want to accelerate this progress.
The Digital Learning Council, a nonprofit organization launched in 2010 to integrate current and future technological innovations into public education, has produced a series of publications (all of them available online) to help parents, educators, and policymakers find and use the best practices for digital learning. The council has proposed “10 Elements of High Quality Digital Learning,” which it describes as “actions that need to be taken by lawmakers and policymakers to foster a high-quality, customized education for all students. This includes technology-enhanced learning in traditional schools, online and virtual learning, and blended learning that combines online and onsite learning.”
In 2011, the American Legislative Exchange Council (ALEC), a respected membership organization for state legislators, adopted a model resolution endorsing the “ten elements” approach. In 2012, ALEC created and endorsed model legislation, the Statewide Online Education Act, that provides a detailed template for states to follow to remove roadblocks to expanding digital learning. The National Conference of State Legislatures (NCSL), another organization of state legislators, also has endorsed expanding the use of digital learning and provides case studies of its successful implementation .
The Clayton Christensen Institute for Disruptive Innovation, formerly the Innosight Institute, is another good source of best practices. The nonprofit think-tank was founded by Harvard professor Clayton M. Christensen, author of the 2008 bestseller Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns. The organization conducts original research on the cutting edge of digital learning, consults with elected officials, and provides speakers for public events. Researchers affiliated with the organization have created a “blended-learning taxonomy” that distinguishes among the various ways of blending digital learning with traditional schooling, such as Station Rotation, Lab Rotation, Flipped Classroom, Flex, A La Carte, Enriched Virtual, and Individual Rotation models.
Digital learning – the combination of online adaptive testing and instruction made possible by new technologies, software, and the internet – is beginning to transform K-12 education. It accelerates learning for a number of reasons, but an important one is because it makes rewards for learning more accurate, timely, and attuned to the interests and abilities of students. It promises to deliver the “creative destruction” required to substantially improve America’s failing elementary and high-school system.
ClassDojo, Goalbook, and Funnix are three examples of the rapidly growing number of software programs available to educators to bring digital learning into the classroom. Rocketship Education, Khan Academy, Coursera, andUdacity illustrate the variety of new institutions that are using digital learning to transform traditional teaching methods. Given the pace at which software is improving and institutions are evolving, these examples may seem out of date in a few years.
Research shows substantial positive achievement effects of online education in pre-internet days and larger effects in recent years. More advanced technologies used on a much wider scale promise even larger achievement effects, lower costs, and a greater variety of incentives, curricula, and teaching methods from which parents, students, and educators can choose. Obstacles in the path to increased use of digital learning can be removed by parents and policymakers working together to adopt the policies recommended by pioneering leaders in the field, the Digital Learning Council, and other groups supporting this disruptive innovation – which will likely lead to far more effective education.
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). This article is excerpted from Chapter 10, “Rewards and Digital Learning.”
[First published at the American Thinker.]
Notes Tamara Butler Battaglino, Matt Haldeman, and Eleanor Laurans, “The Costs of Online Learning,” in Chester E. Finn, Jr. and Daniela R. Fairchild, eds., Education Reform for the Digital Era (Washington, DC: Thomas B. Fordham Institute, 2012), pp. 55–76.  Chester E. Finn, Jr. and Daniella R. Fairchild, “Overcoming the Obstacles to Digital Learning”; Paul T. Hill, “School Finance in the Digital-Learning Era”; and John E. Chubb, “Overcoming the Governance Challenge in K-12 Online Learning,” all in Chester E. Finn, Jr. and Daniela R. Fairchild, eds.,ibid., pp. 1–11, 77–98, and 99–134.  Sunny Deyé, “K-12 Online Learning Options,” National Conference of State Legislatures, Legisbriefs 21, no. 16 (April 2013).
The Twentieth was the Century of the Welfare State. Governments the world over built and then continuously grew their domestic aid money delivery apparatuses. Tens of trillions of dollars were spent in attempts to raise poor people up and out.
It’s been disastrous.
Much of the planet was dominated by the Soviet Union – whose satellites and clients were just welfare states under the Red umbrella. Communism is the Welfare State in full bloom – and to say it doesn’t work is the century’s greatest understatement. One hundred million people died – and billions more lived nasty, brutish and short lives in abject desolation and destitution.
The United States has on welfare spent more than $7 trillion – just in the last fifty years.
And President Barack Obama has failed utterly to learn the last century’s lessons. He is in his mere eight years set to more than double our disastrous outlay.
Some remain steadfastly impervious to facts.
That’s just domestic. Nations around the world – led by the U.S. – have spent trillions more making other nations around the world into Welfare States. Which has for them been just as disastrous as it has been for us domestically.
Africa has largely become a Welfare Continent. It has received tons of free coin – and has been for the most part been mired in perpetual, dire malaise.
Time for a rethink indeed – not just in Africa, but throughout the world.
U2 singer Bono – a decades-long global Welfare State promoter and believer – certainly thinks so.
“So some of Africa is rising – and some of Africa is stuck. The question is whether the rising bit will pull the rest of Africa up – or whether the other Africa will weigh the continent down. Which will it be?
“The stakes here aren’t just about them. Imagine for a second this last global recession – but without the economic growth of China and India. Without the hundreds of millions of newly-minted middle class folks who now buy American and European goods. Imagine that. Think about the last five years.
“Rock star preaches capitalism. Shh…wow. Sometimes I hear myself and I just can’t believe it. But commerce is real. What you’re about here – it’s real.
“Aid is just a stop gap. Commerce, entrepreneurial capitalism takes more people out of poverty than aid. Of course we know that.”
I wish we all did. Global Welfare Statesmen – take note of the Rocker.
Commerce and entrepreneurial capitalism practiced inter-nationally – between nations – is called free trade. Utterly unfettered by the “assistance” of government.
You know who’s learning it? More and more of Africa.
“Trade lanes in Africa have increased significantly as a result of relieved trade barriers, which have had a positive impact on many local businesses. A key driver of this growth has been the African Growth and Opportunity Act (AGOA), which has stimulated trade and investment between Africa and the United States….
“Africa is the ‘last frontier’, the more we collectively focus on connecting it with the world, the more sustainable its economies will be and the more jobs we will create – creating a virtuous cycle of success.”
Rather than the 20th Century vicious cycle of Welfare State poverty.
Free trade allows peoples everywhere to lead exponentially better lives.
Governments need to do less – less free money-ing, taxing, tariff-ing, subsidizing and protectionism-ing.
And simply get out of the way – and let the magic of the marketplace clean up their messes.
[Originally published at PJ Media]
Since the economic crisis of 2008-2009, the Federal Reserve – America’s central bank – has expanded the money supply in the banking system by over $4 trillion, and has manipulated key interest rates to keep them so artificially low that when adjusted for price inflation, several of them have been actually negative. We should not be surprised if this is setting the stage for another serious economic crisis down the road.
Back on December 16, 2009, the Federal Reserve Open Market Committee announced that it was planning to maintain the Federal Funds rate – the rate of interest at which banks lend to each other for short periods of time – between zero and a quarter of a percentage point. The Committee said that it would keep interest rates “exceptionally low” for an “extended period of time, which has continued up to the present.
Federal Reserve Policy and Monetary Expansion
Beginning in late 2012, the then Fed Chairman, Ben Bernanke, announced that the Federal Reserve would continue buying U.S government securities and mortgage-backed securities, but at the rate of an enlarged $85 billion per month, a policy that continued until early 2014. Since then, under the new Federal Reserve chair, Janet Yellen, the Federal Reserve has been “tapering” off its securities purchases until in July of 2014, it was reduced to a “mere” $35 billion a month.
In her recent statements, Yellen has insisted that she and the other members of the Federal Reserve Board of Governors, who serve as America’s monetary central planners, are watching carefully macro-economic indicators to know how to manage the money supply and interest rates to keep the slowing general economic recovery continuing without fear of price inflation.
Some of the significant economic gyrations on the stock markets over the past couple of months have reflected concerns and uncertainties about whether the Fed’s flood of paper money and near zero or negative real interest rates might be coming to an end. In other words, borrowing money to undertake investment projects or to fund stock purchases might actually cost something, rather than seeming to be free.
When the media has not been distracted with the barrage of overseas crises, all of which seem to presume the need for America to play global policeman and financial paymaster to the world at U.S. taxpayers’ expense, the resumption by news pundits and too many economic policy analysts is that Federal Reserve’s manipulation of interest rates is a good, desirable and necessary responsibility of the central bank.
As a result, virtually all commentaries about the Fed’s announced policies focus on whether it is too soon for the Federal Reserve to raise interest rates given the state of the economy, or whether the Fed should already be raising interest rates to prevent future price inflation.
What is being ignored is the more fundamental question of whether the Fed should be attempting to set or inﬂuence interest rates in the market. The presumption is that it is both legitimate and desirable for central banks to manipulate a market price, in this case the price of borrowing and lending. The only disagreements among the analysts and commentators are over whether the central banks should keep interest rates low or nudge them up and if so by how much.
Market-Based Interest Rates have Work to Do
In the free market, interest rates perform the same functions as all other prices: to provide information to market participants; to serve as an incentive mechanism for buyers and sellers; and to bring market supply and demand into balance. Market prices convey information about what goods consumers want and what it would cost for producers to bring those goods to the market. Market prices serve as an incentive for producers to supply more of a good when the price goes up and to supply less when the price goes down; similarly, a lower or higher price inﬂuences consumers to buy more or less of a good. And, ﬁnally, the movement of a market price, by stimulating more or less demand and supply, tends to bring the two sides of the market into balance.
Market rates of interest balance the actions and decisions of borrowers (investors) and lenders (savers) just as the prices of shoes, hats, or bananas balance the activities of the suppliers and demanders of those goods. This assures, on the one hand, that resources that are not being used to produce consumer goods are available for future-oriented investment, and, on the other, that investment doesn’t outrun the saved resources available to support it.
Interest rates higher than those that would balance saving with investment stimulate more saving than investors are willing to borrow, and interest rates below that balancing point stimulate more borrowing than savers are willing to supply.
There is one crucial difference, however, between the price of any other good that is pushed below that balancing point and interest rates being set below that point. If the price of hats, for example, is below the balancing point, the result is a shortage; that is, suppliers offer fewer hats than the number consumers are willing to buy at that price. Some consumers, therefore, will have to leave the market disappointed, without a hat in hand.
Central Bank-Caused Imbalances and Distortions
In contrast, in the market for borrowing and lending the Federal Reserve pushes interest rates below the point at which the market would have set them by increasing the supply of money on the loan market. Even though savers are not willing to supply more of their income for investors to borrow, the central bank provides the required funds by creating them out of thin air and making them available to banks for loans to investors. Investment spending now exceeds the amount of savings available to support the projects undertaken.
Investors who borrow the newly created money spend it to hire or purchase more resources, and their extra spending eventually starts putting upward pressure on prices. At the same time, more resources and workers are attracted to these new investment projects and away from other market activities.
The twin result of the Federal Reserve’s increase in the money supply, which pushes interest rates below that market-balancing point, is an emerging price inﬂation and an initial investment boom, both of which are unsustainable in the long run. Price inﬂation is unsustainable because it inescapably reduces the value of the money in everyone’s pockets, and threatens over time to undermine trust in the monetary system.
The boom is unsustainable because the imbalance between savings and investment will eventually necessitate a market correction when it is discovered that the resources available are not enough to produce all the consumer goods people want to buy, as well as all the investment projects borrowers have begun.
Central Bank Produces Booms and Busts
The unsustainability of such a monetary-induced investment boom was shown, once again, to be true in the latest business cycle. Between 2003 and 2008, the Federal Reserve increased the money supply by at least 50 percent. Key interest rates, including the Federal Funds rate and the one-year Treasury yield, were either zero or negative for much of this time when adjusted for inflation. The rate on conventional mortgages, when inflation adjusted, was between two and four percent during this same period.
It is no wonder that there emerged the now infamous housing, investment, and consumer credit bubbles that burst in 2008-2009. None of these would have been possible and sustainable for so long as they were if not for the Fed’s flood of money creation and the resulting zero or negative lending rates when adjusted for inflation.
The monetary expansion and the artificially low interest rates generated wide imbalances between investment and housing borrowing on the one hand and low levels of real savings in the economy on the other. It was inevitable that the reality of scarcity would finally catch up with all these mismatches between market supplies and demands.
This was, of course, exacerbated by the Federal government’s housing market creations, Fannie Mae and Freddie Mac. They opened their financial spigots through buying up or guaranteeing ever more home mortgages that were issued to a growing number of uncredit worthy borrowers. But the financial institutions that issued and then marketed those dubious mortgages were, themselves, only responding to the perverse incentives that had been created by the Federal Reserve and by Fannie Mae and Freddie Mac.
Why not extend more and more loans to questionable homebuyers when the money to fund them was virtually interest-free thanks to the Federal Reserve? And why not package them together and pass them on to others, when Fannie Mae and Freddie Mac were subsidizing the risk on the basis of the “full faith and credit” of the United State government?
More Monetary Mischief in the Post-Bubble Era
What was the Federal Reserve’s response in the face of the busted bubbles its own policies helped to create? Between September 2008 and June 2014, the monetary base (currency in circulation and reserves in the banking system) has been increased by over 440 percent, from $905 billion to more than $4 trillion. At the same time, M-2 (currency in circulation plus demand and a variety of savings and time deposits) grew by 35 percent during this time period.
Why haven’t banks lent out more of this huge amount of newly created money, and generated a much higher degree of price inflation than has been observed so far? Partly it is due to the fact that after the wild bubble years, many financial institutions returned to the more traditional credit worthy benchmarks for extending loans to potential borrowers. This has slowed down the approval rate for new loans.
But more importantly, those excess reserves not being lent out by banks are collecting interest from the Federal Reserve. With continuing market uncertainties about government policies concerning environmental regulations, national health care costs, the burden of the Federal debt and other government unfunded liabilities (Social Security and Medicare), as well as other possible political interferences in the marketplace, banks have found it more attractive to be paid interest by the Federal Reserve rather than to lend money to private borrowers. And considering how low Fed policies have pushed down key market lending rates, leaving those excess reserves idle with first Ben Bernanke and now Janet Yellen has seemed the more profitable way of using all that lending power.
Even under the heavy-handed intervention of the government, markets are fundamentally resilient institutions that have the capacity to bounce back unless that governmental hand really chokes the competitive and profit-making life out of capitalism. Any real recovery in the private sector will result in increased demands to borrow that would be satisfied by all of that Fed-created funny money currently sitting idle. Once those hundreds of billions of dollars of excess reserves come flooding into the market, price inflation may not be far behind.
Central Banking as the Problem, Not the Solution
At the heart of the problem is that fact that the Federal Reserve’s manipulation of the money supply prevents interest rates from telling the truth: How much are people really choosing to save out of income, and therefore how much of the society’s resources – land, labor, capital – are really available to support sustainable investment activities in the longer run? What is the real cost of borrowing, independent of Fed distortions of interest rates, so businessmen could make realistic and fair estimates about which investment projects might be truly profitable, without the unnecessary risk of being drawn into unsustainable bubble ventures?
Unfortunately, as long as there are central banks, we will be the victims of the monetary central planners who have the monopoly power to control the amount of money and credit in the economy; manipulate interest rates by expanding or contracting bank reserves used for lending purposes; threaten the rollercoaster of business cycle booms and busts; and undermine the soundness of the monetary system through debasement of the currency and price inflation.
Interest rates, like market prices in general, cannot tell the truth about real supply and demand conditions when governments and their central banks prevent them from doing their job. All that government produces from their interventions, regulations and manipulations is false signals and bad information. And all of us suffer from this abridgement of our right to freedom of speech to talk honestly to each other through the competitive communication of market prices and interest rates, without governments and central banks getting in the way.
[Originally published at EpicTimes]
Here in America and elsewhere around the world, Greens continue to war against any energy other than the “renewable” kind, wind and solar, that is more costly and next to useless. Only coal, oil, natural gas, and nuclear keeps the modern and developing world functioning and growing.
The most publicized aspect is Obama’s “War on Coal” and, thanks to the Environmental Protection Agency, it has been successful; responsible for shutting down several hundred coal-fired plants by issuing costly regulations based on the utterly false claim that carbon dioxide emissions must be reduced to save the Earth from “global warming.”
The EPA is the government’s ultimate enemy of energy, though the Department of the Interior and other elements of the government participate in limiting access to our vast energy reserves and energy use nationwide. By government edict, the incandescent light bulb has been banned. How insane is that?
The Earth has been cooling for seventeen years at this point, but the Greens call this a “pause.” That pause is going to last for many more years and could even become a new ice age.
A study commissioned by the National Association of Manufacturers (NAM) on the impact of the proposed new EPA regulation of emissions found that, as CNSNews reported, it “could be the costliest federal rule by reducing the Gross National Product by $270 billion a per year and $3.4 trillion from 2017 to 2040” adding $2.2 trillion in compliance costs for the same period. Jay Timmons, CEO and president of NAM, said, “This regulation has the capacity to stop the manufacturing comeback in its tracks.”
As Thomas Pyle, the president of the Institute for Energy Research(IER), said in June, “President Obama is delivering on his promise to send electricity prices skyrocketing.” Noting a proposed EPA regulation that would shut more plants, he said “With this new rule, Americans can expect to pay $200 more each year for their electricity.” Having failed to turn around the nation’s economy halfway into his second term, Obama is adding to the economic burdens of all Americans.
America could literally become energy independent given its vast reserves of energy sources. In the case of coal, the federal government owns 957 billion short tons of coal in the lower 48 States, of which about 550 billion short tons—about 57 percent—are available in the Powder River Basin. It is estimated to be worth $22.5 trillion to the U.S. economy, but as the IER notes, it “remains unrealized due to government barriers on coal production.” It would last 250 years, greater than Russia and China. When you add in Alaska, the U.S. has enough coal to last 9,000 years at today’s consumption rates!
In 2013 the IER estimated the worth of the government’s oil and coal technically recoverable resources to the economy to be $128 trillion, about eight times our national debt at the time.
There isn’t a day that goes by that environmental groups such as Friends of the Earth and the Sierra Club, Greenpeace, the National Resources Defense Council, and the Union of Concerned Scientists, along with dozens of others, do not speak out against the extracting and use of all forms of energy, calling coal “dirty” and claiming Big Oil is the enemy.
In the 1970s and 1980s, the Greens held off attacking the nuclear industry because it does not produce “greenhouse gas” emissions. Mind you, these gases, primarily carbon dioxide, represent no threat of warming and, indeed, as the main “food” of all vegetation on Earth, more carbon dioxide would be a good thing, increasing crop yields and healthy forests.
Events such as the 1979 partial meltdown at Three Mile Island and the 1986 Chernobyl disaster raised understandable fears. The Greens began opposing nuclear energy claiming that radiation would kill millions in the event of a meltdown. This simply is not true. Unlike France that reprocesses spent nuclear fuel, President Carter’s decision to not allow reprocessing proved to be very detrimental, requiring repositories for large quantities.
To this day, one of the largest, Yucca Mountain Repository, authorized in 1987, is opposed by Greens. Even so, it was approved in 2002 by Congress, but the funding for its development was terminated by the Obama administration in 2011. Today there are only four new nuclear power plants under construction and, in time, all one hundred existing plants will likely be retired starting in the mid-2030s.
The Greens’ attack on coal is based on claims that air quality must be protected, but today’s air quality has been steadily improving for years and new technologies have reduced emissions without the need to impose impossible regulatory standards. As the American Petroleum Institute recently noted, “These standards are not justified from a health perspective because the science is simply not showing a need to reduce ozone levels.”
The new EPA standards are expected to be announced in December. We better hope that the November midterm elections put enough new candidates into Congress to reject those standards or the cost of living in America, the capacity to produce electricity, the construction and expansion of our manufacturing sector will all worsen, putting America on a path to decline.