Martin Feldstein, a professor of economics at Harvard University, president emeritus of the nonprofit National Bureau of Economic Research, and former chairman of the Council of Economic Advisers from 1982 to 1984 has concluded that the Waxman/Markey cap-and-trade legislation is a bad idea. He comes to that conclusion for a number of reasons.
First, his understanding of the legislation and its economic impact:
The leading legislative proposal, the Waxman-Markey bill that was recently passed out of the House Energy and Commerce Committee, would reduce allowable CO2 emissions to 83 percent of the 2005 level by 2020, then gradually decrease the amount further. Under the cap-and-trade system, the federal government would limit the total volume of CO2 that U.S. companies can emit each year and would issue permits that companies would be required to have for each ton of CO2 emitted. Once issued, these permits would be tradable and could be bought and sold, establishing a market price reflecting the targeted CO2 reduction, with a tougher CO2 standard and fewer available permits leading to higher prices.
Companies would buy permits from each other as long as it is cheaper to do that than to make the technological changes needed to eliminate an equivalent amount of CO2 emissions. Companies would also pass along the cost of the permits in their prices, pushing up the relative price of CO2-intensive goods and services such as gasoline, electricity and a range of industrial products. Consumers would respond by cutting back on consumption of CO2-intensive products in favor of other goods and services. This pass-through of the permit cost in higher consumer prices is the primary way the cap-and-trade system would reduce the production of CO2 in the United States.
Note that he doesn’t play any games when talking about where the cost of such permits will end up – passed through to consumers. He prefers the CBO’s lower estimate of the impact per family of about $1,600 per “typical” family to some of the higher estimates in the $3,000 t0 $4,000. But they’re all estimates and they all say, even at the low end, that the impact is going to be significant.
Feldstein then looks at the possible payoff and challenges Americans to ask a very pertinent question. He also calls the plan exactly what it is – a tax:
Americans should ask themselves whether this annual tax of $1,600-plus per family is justified by the very small resulting decline in global CO2. Since the U.S. share of global CO2 production is now less than 25 percent (and is projected to decline as China and other developing nations grow), a 15 percent fall in U.S. CO2 output would lower global CO2 output by less than 4 percent. Its impact on global warming would be virtually unnoticeable.
But its impact on the American economy? Well, you don’t have to be a Harvard economist to figure that out. And a quick glance at Europe and how quickly most of the countries there figured out a way to ignore Kyoto should tell you the rest of the story.
Feldstein may or may not believe the theory that says CO2 is a pollutant and the cause of “global climate change”. But what is clear is he certainly doesn’t believe our seeming desire to strap ourselves economically without the big emitters (China and India) doing the same is a) worth it economically and b) make a bit of difference in real terms. Doing it without those two and all others included is about as smart as committing to unilateral nuclear disarmarment.
Feldstein goes on to attack the pending cap-and-trade legislation for other reasons as well – mostly on a revenue and impact basis (and how revenue can soften the impact – yeah, subsidy – at the “payee” end – i.e. consumers. Of course, only a certain class of consumers would most likely be eligable and it will be up to the more well-to-do to pay their “fair share”). But the two big points of his criticism are the most important in my thinking.
1. It will, regardless of how it is structured, have a negative economic impact on every American household and thus our economy.
2. It won’t make a bit of real difference unless everyone is involved in such reductions. Exclusion of the big emitters makes our “economic sacrifice” literally worthless in terms of the supposed overall goal of cutting CO2 worldwide.
Because of those two points alone, we should demand that such legislation be voted down. I think the focus on CO2 is a load of unscientific nonsense, but politically that has no legs at this time. But what does have legs is the argument summed up in those two points and opponents of cap-and-trade should use them (and Feldstein’s name) to make the argument against the pending legislation.
Here’s a question for readers of all political stripes:
How big would a moral outrage have to be before you turned to violence?
Imagine that you live in a place in which what you perceive as a grave moral injustice–specifically violence against innocents–is enshrined in law. You may perceive your opponents as anywhere from mean-spirited to perfectly well-meaning, but either way they are determined to continue, and your prospects for overturning this outrage through the normal legal process any time soon are scarce or nil. In the meantime, you believe something horrific is happening on a massive scale.
For our purposes, try to think of different governments — direct democracy, representative democracy, oligarchy, monarchy, whatever.
At what point do you decide to act against law, by an alternative code? And specifically, I mean turning to violence: threats, destruction of property, assault, assassination, even terrorism* and revolution.
What prevents you from acting violently up to that point?
- The high personal cost?
- The low probability of success?
- The fear that things will turn out worse than simply allowing the grave injustice to continue?
- Simple aversion to personally engaging in violence, despite your belief that the status quo is violence under color of law?
I’m trying to get at what flips a switch in someone to get them to turn to political violence. Can you imagine a situation in which you would turn to such violence?
I suppose this turned into more of a thought experiment than a question. But your input is welcome.
* I prefer Philip Bobbitt’s definition of terrorism in Terror and Consent as “the pursuit of political goals through the use of violence against noncombatants in order to dissuade them from doing what they have a lawful right to do,” so remember, you oppose these noncombatants for supporting laws.
I believe that we have a replacement for MK-Ultra showing up in the comments section. It might even be MK-Ultra, since the commenter Dude09 seems similarly dense enough to have a noticeable gravitational field. Apparently, he was all upset that no one mentioned the wack-job who killed the abortion doctor in Kansas today, and we didn’t put it up on the board as a topic of conversation for the Podcast today.
Since it apparently seems that we have to occasionally re-explain the facts of life to morons, I will do so again.
1. We set up the Podcast topics on Friday. For the most part, if we didn’t discuss it on Friday, it doesn’t go on the air on Sunday. It’s not a daily news show. It’s a discussion about things that have caught our eye over the past week.
2. We will not always create a post on your pet news story. Why? Maybe we didn’t know enough about it. Maybe we haven’t heard the story yet. Maybe we’re busy. Or, maybe we just don’t care. For instance, let’s take a look at my day. When I got up today, I got dressed and went for breakfast, and then to the grocery store. Upon my return, I trimmed hedges and bougainvillea, sprayed Roundup on some weeds, and picked up dog crap in the back yard. Then, I went directly into my office to record the Podcast. Immediately after that, I worked for 1.5 hours on a client web site. I scarfed down a quick dinner, during which I first saw an actual news report on the shooting. I then worked until 9PM on another client web site. So, here’s a clue, maybe I didn’t blog on your pet story because I have a life, and responsibilities that preclude me from doing so. I mean, really, do you think we sit around all day cruising the internet and news sites to latch on to your pet story as soon as it appears. Cripes, most of the time, Bruce writes the stories you see on the blog on the night before they appear.
3. Sometimes, your pet story just isn’t compelling. Someone went unhinged and shot an abortionist. So what? I mean, it’s a terrible tragedy, but what does it tell us about…well…anything? What conclusions are we supposed to draw? It’s not like abortionists are getting bumped off on a regular basis. The last one of these that occured was 11 years ago, back in 1998. What lessons am I supposed to draw from the fact that some lunatic thinks God told him to kill an abortionist that are in any way substantively different than those I would derive when a crackpot kills his pharmacist because the Venusians sent him a command to do so via the transmitter secreted in his skull?
4. I really hate peer pressure. Even if I was inclined to write about a story at some point, having you kite in here and call me an ass because I haven’t done it yet is a sure-fire way to get me to ignore the story completely. I’ll ignore it just to spite you.
5. I don’t care what you want to hear about. I didn’t open up a request line when I started blogging. I did to write about things that interest me, and beleive me, the abortion issue is way down near the bottom of the list of things that interest me. If you send me a story, and it interests me, and if I have time, I might write about it. Or not.
I hope that clears things up.
Yet another statistical analysis of the Chrysler dealership closings has been conducted, although this one appears to be both much more thorough (albeit preliminary) and concentrated on the correct data (my emphasis):
To start with, we pulled raw donor data from The Center for Responsive Politics / OpenSecrets.org for the 2008 election cycle and extracted ~865 megabytes of 2008 individual contribution (“IC”) cycle table entries.
… this particular output is the widest available dataset on contributions. We matched this data against two Chrysler dealer lists:
First, Docket #797 “Document #3″ “Schedule of Designated Domestic Dealer Agreements and Cure Costs Related Thereto” (a list of dealers expected to survive).
Second, the famous “Exhibit A” document of dealers to be closed.
We ran binary logistic regressions across the variables. The results are interesting but the most dramatic was saved dealers v. donations by candidate and/or party.
The results of the analysis suggest that donors to Hillary Clinton in the recent presidential race received some preferential treatment. That does not mean that anyone has proven anything, nor that the statistical analysis makes any sort of unassailable case. It merely raises a concern that, given the probabilities, Clinton donors appear to have survived the dealership closings surprisingly well.
This puzzled us. Why would there be an
significantnoticeable (we have rightly been called out for using significant here) and highly positive correlation between dealer survival and Clinton donors? Granted, that P-Value (0.125) isn’t enough to reject the null hypothesis at 95% confidence intervals (our null hypothesis being that the effect is due to random chance), but a 12.5% chance of a Type I error in rejecting a null hypothesis (false rejection of a true hypothesis) is at least eyebrow raising. Most statistians would not call this a “find” as 95% confidence intervals are the gold standard for this sort of work. Nevertheless, it seems clear that something is going on here. Specifically, the somewhat low probability that the Clinton data showing higher survivability of Clinton donors could result just from pure chance. But why not better significance with any of the other variables? Why this stand out?
Then we got to thinking. Steven Rattner, the Car Czar, is married to Maureen White, one-time national finance chairman of the Democratic National Committee. What does Maureen do now? From her website:
Maureen White is currently Chairman of the Board of Overseers of The International Rescue Committee (IRC), a member of the North American Advisory Board for the London School of Economics, and a National Finance Chair of the Hillary Clinton for President Campaign. (emphasis ours)
That website looks dated, but you get the idea.
Again, we want to point out that our findings are preliminary and subject to change. But whatever the result, the Administration has made themselves very vulnerable by taking charge of the dealership closing decisions.
I’m still not sure if there’s anything to the allegations, but there seems to be more than enough anomalies to warrant some questions being asked of the Obama administration. It should be noted that the theory regarding potential shenanigans has morphed from Obama creating a Republican hit list with the closings, to Obama benefiting Democrat donors by allowing their dealerships to survive (and thrive), to Obama’s “Car Czar” rewarding donors to his wife’s favorite political candidate (Hillary Clinton). When the theory moves that much, often it’s a sign that one is fishing for a villain. And despite the evidence amassed in this case showing that an unusual number of Democrat donors are set to prosper from the closing decisions, that may be the case here.
However this all turns out, one thing is certain: by involving itself so deeply in the fate of Chrysler (and GM), the Obama administration invited scrutiny concerning its decision-making processes. Furthermore, in being so opaque about how the government is picking winners and losers (not to mention that it is making these decisions at all), the Obama administration has left itself open to attacks of favoritism. That has nothing to do with Obama or partisanship in particular, but with the fact that unaccountable power rightfully raises fears and suspicions of favoritism. If Chrysler had been left to fend for itself in bankruptcy, none of these questions would have been raised.
The government arrogated to itself tremendous amounts of power over what would normally be private business decisions. In the process, the Obama administration blatantly used its power and influence to reward a favored constituent group (the UAW). Now that statistical evidence suggests more favoritism may have been in play, it’s a little late to cry “conspiracy theory.” Instead, the Obama administration should start opening the books and answering questions.
In this podcast, Bruce, Michael, Billy, and Dale discuss the economy and the Sotomayor nomination.
The direct link to the podcast can be found here.
The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.
Amir Taheri broaches a subject that I’m sure will sound over-the-top to many. He asks, “Is England on the verge of revolution?”
Given the way the British government increasingly treats their citizens as serfs, I’ve wondered if serious resistance to such treatment would build to significant levels. I’ve only had one brief visit to Britain, so I’m in no position to venture an informed opinion. But Taheri finds some evidence that a tipping point may have been reached:
“I do sense a revolutionary mood,” David Starkey, one of Britain’s foremost historians, told the BBC. “I won’t be surprised if we did end up having a revolution.”
The current scandals of British MPs are one of the main drivers of the mood. They seem to be blatantly abusing their offices to feather their own nests (shades of John Murtha, et. al.), and simultaneously becoming increasingly irrelevant and hapless to do anything constructive because of the shift of power to the EU. Taheri thinks this has a pretty dramatic effect on the British:
Every nation has a number of founding myths. Britain’s principal myth is that it is the birthplace of modern democracy and a land where the law is supreme. The shocking realization that “the mother of parliaments” may have been acting as the rudest of street sluts is not easy to stomach. Some of the same politicians who go around the world lecturing others, especially in the “developing world”, against corruption, have been exposed as practioners of petty larceny.
I’m no expert on the British character, but I would not expect such behavior by itself to drive a revolution. However, it has a synergistic effect with a shrinking economy and significantly higher unemployment, which Britain is suffering. No one likes it when they suffer while their political elites are prospering by playing fast and loose with the rules.
Taheri points to the unpopularity of the wars in Iraq and Afghanistan as additional factors. Given that we have plenty of war opponents here, and that Britain was one level removed from the responsibility for those wars, I suppose they probably have more.
But to me, the main point was captured in the quote I used for the title. Revolutions can only happen when a sufficient numer of the people no longer believe their government is legitimate. It’s very unlikely for one single incident to cause such a shift in thinking. It more of a water-torture, drip, drip, drip process. Items such as the apparent politically-motivated dropping of charges against a serious example of voter intimidation are examples of incidents that don’t look that major on their own, but every one of them risks convincing another small set of citizens that their government isn’t playing by their own rules, and no longer cares about the welfare of the nation as a whole.
I choose that particular incident because erosion of confidence in the rules surrounding the ballot box are particularly damaging to the legitimacy of the government. I’ve talked to people who are convinced that our elections are a sham and participating in them is not only a waste of time, but actually bad because it gives a facade of legitimacy to what they perceive as an illegitimate process.
I’m not advocating revolution, but it’s worthwhile to point out that the ultimate check on an abusive, out-of-touch government is revolution. I don’t see it as a bad thing for our political elites to understand that their authority and ability to abuse us is not infinite. Since Britain is a few steps further along the path that Obama seems determined to take us, I hope our elites pay some mind to what might lie at the end of that path.
(Found via Instapundit)
While at a conference in Singapore with Asian defense leaders, Sec. Gates did a little podium thumping about North Korea’s recent nuclear test:
“We will not stand idly by as North Korea builds the capability to wreak destruction on any target in Asia — or on us,” Mr. Gates told a major defense conference here that has been dominated by North Korea’s test this week of a nuclear device and the firing of at least six short-range missiles, all in defiance of international sanctions.
It took a foreign journalist to point out to Sec. Gates that while the US may not recognize North Korea as a nuclear weapons state, it was, in fact, already a “defacto nuclear weapons state.”
And, of course, it was important that Gates do a little apologizing to the assembled group as well, since this seems to now be an integral part of any foreign visit:
Mr. Gates concluded that the United States, “in our efforts to protect our own freedom, and that of others” had “from time to time made mistakes, including at times being arrogant in dealing with others.” Mr. Gates did not name names, but then said, “We always correct course.”
Other nations in the region weighed in on the North Korea nuclear test as well:
In Moscow, the Kremlin issued a statement saying President Dmitri A. Medvedev and Prime Minister Taro Aso of Japan had agreed on the need for a serious response to the nuclear test, Reuters reported.
As is usually the case in these sorts of situations, no one has any idea of what might constitute a “serious response” . In essence, the most “serious response” discussed thus far at the conference has been tightening sanctions. And we know how well sanctions have worked in NoKo and Iran.
Unofficially, about all that’s gone on is this:
“There’s no prescription yet on what to do,” said a senior American defense official who asked for anonymity because he was not authorized to speak publicly. The official said that one “prudent option” was “what should we be thinking about in the event that we need to start enhancing our posture, our defenses?” But the official said that it was premature to talk of building up American forces in the region — an echo of comments from Mr. Gates on Friday that the United States had no plans to reinforce some 28,000 American troops based in South Korea.
Well there you go. China also had a few words to say as well:
“We are resolutely opposed to nuclear proliferation,” General Ma said, adding that “we hope that all parties concerned will remain cool-headed and take measured measures to address the problem.”
China is resolutely opposed to nuclear proliferation only after NoKo. That means it wants no nukes in Japan. And its admonishment to all to remain “cool-headed” and take “measured measures” means it is in no hurry to do much of anything about the present problem. Of course, China holds the key(s) to dealing with NoKo and everyone knows it.
So? So as usual, North Korea does what it chooses to do and nothing of significance is being done to “punish” it for doing so. I’m sure, as is the MO of the Obama administration, that the blame for all of this will be laid at the previous administration’s feet, but a quick perusal of history going back later than 8 years will show than no US administration has actually dealt effectively with North Korea and the present one isn’t going to be any different – despite its apology.
From the White House Blog in an entry written by Norm Eisen, special counsel to the president for ethics and government reform in “the spirit of transparancy”:
… [T]he President’s March 20, 2009 Memorandum on Ensuring Responsible Spending of Recovery Act Funds. Section 3 of the Memorandum required all oral communications between federally registered lobbyists and government officials concerning Recovery Act policy to be disclosed on the Internet; barred registered lobbyists from having oral communications with government officials about specific Recovery Act projects or applications and instead required those communications to be in writing; and also required those written communications to be posted on the Internet.
However, a couple of changes have been made, among them:
First, we will expand the restriction on oral communications to cover all persons, not just federally registered lobbyists. For the first time, we will reach contacts not only by registered lobbyists but also by unregistered ones, as well as anyone else exerting influence on the process. We concluded this was necessary under the unique circumstances of the stimulus program.
So thinking this through, could “anyone” include a TV or print reporter asking an oral question to a government official concerning Recovery Ac Policy? Or a particular Recovery Act project that might impact their viewership or readership? Is it possible the information provided, if government officials are subjected to such oral scrutiny, might end up “exerting influence on the process”?
How about a concerned citizen who happens to be a blogger?
Doesn’t this give government officials the cover to duck such oral inquiries? How does that enhance transparency?
And ultimately, doesn’t this smack of a wee bit of a conflict with the 1st Amendment (free speech, free press, the right to petition government)?
And if “the unique circumstances of the stimulus program” are enough to limit 1st Amendment rights, per this paragon of “ethics and government reform, what other “unique circumstances” might be cited in the future to do the same sort of thing, given the precedent this sets?
This is the Camel’s nose under the tent, being poked because of special circumstances.
“Lobbyists and organizations that lobby complained that the White House’s restrictions on lobbying on stimulus fund projects were discriminatory and unfair because the same restrictions didn’t apply to people like corporate executives or officials. So these memorandumly noted changes address that fairness issue by expanding the ban on orally petitioning the government or expressing one’s views through speech. In the interests of transparency the First Amendment must be sacrificed.
“The restrictions are also ambiguous enough that a lobbyist or other petitioner won’t be sure how to fully comply. So if someone runs afoul of White House officials, a phone call to a news outlet or a friendly prosecutor can punish the offender. Ambiguous rules plus capricious application equals negative rule of law.”
The only transparency in this process is the fact that the White House is telling you the rule. But the rule then precludes oral questioning which might make the process even more transparent. If even the remote possibility exists that such communication might “exert influence on the process” then it is prohibited.
The White House’s apparent intent is to run a transparent process. The result is overreaching by the executive branch with poorly thought through restrictions on speech that are seemingly unconstitutional. The problem is they obviously don’t feel that to be the case. Or if they do, they think they should have the right to restrict certain forms of communication between government and anyone they decide if “unique circumstances” are existent (guess who get’s to determine whether they are or not?).
Frankly that should bother you.
However, fear not – I’m sure those that continually cited the Bush administration for alleged expansion of executive power will be among the first to address this obvious abuse of Constitutional power and call for an immediate revocation of the rule.
Recently, while listening to the Opie and Anthony show, I heard an interview with Loius CK, the comedian. And he said something that struck me as quite profound. And quite true.
Back in olden times–i.e., prior to the 1930s–our paper money wasn’t actually money, as such. Instead, it was a receipt for the real money–gold, or silver–that we had stored in the bank. And the amount of gold we had determined how many of those receipts we could get. The gold or silver we held had an intrinsic value, and the paper currency we carried was simply a representation of that intrinsic value.
Then, in the 1930s, we simply got rid of the metal, and kept the receipts. Ever since then, the paper money we carry around with us has no intrinsic value. And the value of that receipt is worth whatever the government says it’s worth. It is a medium of exchange, and nothing more.
You may have $1,000,000 in the bank. And if the government says that it’s only worth a cup of coffee in exchange, then that’s exactly what it’s worth. It doesn’t matter if acquiring that million bucks was the work of a lifetime. The government can, if it wishes or is unwise, reduce the stored value of your life’s work to a trip to Starbucks.
Just something to think about.