Posts tagged ‘United States’

US Poverty Rate

Tyler Cowen links to Lane Kenworthy Saying:

]Poverty comparisons across affluent nations typically use a "relative"
measure of poverty. For each country the poverty line "” the amount of
income below which a household is defined as poor "” is set at 50%
(sometimes 60%) of that country's median income. In a country with a
high median, such as the United States, the poverty line thus will be
comparatively high, making a high poverty rate more likely...

There is actually at least one study out there by a left-leaning think tank that sort of addresses this (though not exactly).  The study first shows US and European income of the bottom 10 percentile vs. the median income of that country.  Not surprisingly, since US median income is so high, the bottom 10 percentile have a low share.  BUT, they then do the numbers a second, time, showing the bottom 10 percentile income in each country all compared to US median income, ie all with the same denominator,  here, the US poor do at least as well as most European countries.  The comparison shows clearly that while the US has more income inequality, it is not because our poor are poorer but because our rich and middle class are richer.   Here is that second study:

Study2

The Health Care Housing Project

The looming federal government takeover of health care as proposed by most of the major presidential candidates will be far worse than anything we have seen yet from government programs.  Take this example:  In the 1960's, the federal government embarked on massive housing projects for the poor.  In the end, most of these projects became squalid failures.

With the government housing fiasco, only the poor had to live in these awful facilities.  The rest of us had to pay for them, but could continue to live in our own private homes.

Government health care will be different.  Under most of the plans being proposed, we all are going to be forced to participate.  Using the previous analogy, we all are going to have to give up our current homes and go live in government housing, or least the health care equivalent of these projects.

Think I am exaggerating
?

One such case was Debbie Hirst's. Her breast cancer had metastasized, and the health service would not provide her with Avastin,
a drug that is widely used in the United States and Europe to keep such
cancers at bay. So, with her oncologist's support, she decided last
year to try to pay the $120,000 cost herself, while continuing with the
rest of her publicly financed treatment.

By December, she had
raised $20,000 and was preparing to sell her house to raise more. But
then the government, which had tacitly allowed such arrangements
before, put its foot down. Mrs. Hirst heard the news from her doctor.
"He looked at me and said: "˜I'm so sorry, Debbie. I've had my wrists
slapped from the people upstairs, and I can no longer offer you that
service,' " Mrs. Hirst said in an interview...

Officials said that allowing Mrs. Hirst and others like her to pay
for extra drugs to supplement government care would violate the
philosophy of the health service by giving richer patients an unfair
advantage over poorer ones.

Patients "cannot, in one episode
of treatment, be treated on the N.H.S. and then allowed, as part of the
same episode and the same treatment, to pay money for more drugs," the
health secretary, Alan Johnson, told Parliament.

Here is the poll question I would still love to see asked:

Would you support a system of
government-run universal health care that guaranteed health care
access for all Americans, but would result in you personally getting
inferior care than you get today in terms of longer wait times, more
limited doctor choices, and with a higher probabilities of the
government denying you certain procedures or medicines you have
access to today.

Understanding What Going Green Means

This photo (via Maggie's Farm) shows life in the United States during a time when the US emitted more CO2 than Hillary Clinton, Barack Obama and other greens want to set as the new emissions cap.  In 1940, the US emitted about 33% of 1990 levels of CO2, vs. the green's target of 20%.
Cartandwagonga1940s

Unvarnished Technocracy

The New York Times editorial board had one of the most jaw-dropping pieces I have read in a long time.  In it, they are absolutely unapologetic in saying that they think the government can spend your money better than you can -- and the larger the government take, the happier we all will be.

The munificence of American corporate titans warms the heart, sort of.
The Chronicle of Philanthropy reports that the top 50 donors gave $7.3
billion to charity last year "” about $150 million per head....

Yet we'd be so much happier about all the good things America's
moneyed elite pay for if the government made needed public investments
.

The flip side of American private largess is the stinginess of
the public sector. Philanthropic contributions in the United States "”
about $300 billion in 2006 "” probably exceed those of any other
country. By contrast, America's tax take is nearly the lowest in the
industrial world.

Oh my God, does anyone actually believe that Congress does a better job spending your money than you do?  Apparently they do:

Critics of government spending argue that America's private sector does
a better job making socially necessary investments. But it doesn't.
Public spending is allocated democratically among competing demands.
Rich benefactors can spend on anything they want, and they tend to
spend on projects close to their hearts.

LOLOLOL.  Has anyone looked at the last highway bill?  How many tens of thousands of politically motivated earmarks were there?   

Philanthropic contributions are usually tax-free. They directly reduce
the government's ability to engage in public spending. Perhaps the
government should demand a role in charities' allocation of resources
in exchange for the tax deduction. Or maybe the deduction should go
altogether. Experts estimate that tax breaks motivate 25 percent to 30
percent of contributions.

At the end of the day, this is not about a better prioritization process for spending -- this is about the NY Times getting a bigger say for itself in said spending.  They know that Warren Buffet couldn't give a rat's behind what the NY Times thinks about how he spends his money, but Congressmen trying to get reelected do care.  The NY Times wields a lot of political, but little private, influence, so they want to see as much spending as possible shift to political hands where the Times wields clout.

Postscript: Boy, here is some quality journalism:

Federal, state and local tax collections amount to just more than 25.5
percent of the nation's economic output. The Finnish government
collects 48.8 percent. As a result, the United States spends less on
social programs than virtually every other rich industrial country,
according to the Organization for Economic Cooperation and Development.
The Finnish government probably has money to build children's health
clinics.

"Probably has money?"  What does that mean?  Do they have government-funded children's health clinics or not?  The Times couldn't work up enough energy to fact-check that?  And by the way, who, other than the NY Times, declared that the best marginal use of additional public funds is for children's health clinics?

Postscript #2: Many of the very rich have been funding schools that are competitive with government-monopoly schools.  In this and many other cases, wealthy people fund programs that work better and cheaper than government alternatives.  I am sure that not only would the feds be happy to have this money to spend themselves (on some fat earmarks for key donors, most likely) but they would additionally be thrilled to get rid of the competition.

Update:  I must be going senile.  I missed the most obvious logical fallacy of all.  The NY Times says that our democratic government is the best possible mechanism for allocating funds.  But doesn't that also mean its the best possible mechanism for setting spending levels?  How can it complain that our democratic government is doing a bad job in setting total spending levels but does a great job in allocating that spending?

Antarctica

On Sunday, CBS claimed that Antarctica is melting.  In fact, once small
portion of the Antarctic peninsula is warming and may be losing snow, while the
rest of Antarctica has not been warming and in fact has been gaining ice cover. 
The show visits an island off the Antarctic Peninsula which has about as much
weather relevance and predictive power to the rest of Antarctica as Key West has
to the rest of the United States.  Absolutely absurd.

Unfortunately, I have a real job and I don't have time to restate all the
rebuttals to the CBS show.  However, I took on the Antarctic
issue in depth here
, and this post at NC Media
Watch
has more.

Next Step for Author of AZ Employer Sanctions: Target the Babies

Russell Pearce is the Arizona legislator who authored the AZ employer sanctions law.  Remember, that's the law that requires, among other things, employers to check the immigration status of current employees using an INS system that has federal rules in place that make it illegal to use this system to... check the immigration status of current employees.  His plan is to reduce a major source of labor in the Arizona economy which, by the way, has a 3.5%-4.1% unemployment rate over the last year, the lowest level in 30 years. 

Anyway, now Mr. Pearce has decided to target babies:

The newest front in the battle over illegal immigration is dragging health-care workers into the fray.

The Arizona Hospital and Healthcare Association is trying to kill a
proposal by Rep. Russell Pearce, R-Mesa, that would require its members
to check the citizenship of patients who deliver babies at Arizona
facilities.

If neither of the parents can prove citizenship, the hospital would be barred from issuing a regular birth certificate.

Babies of parents who are here legally but not citizens also would be denied regular birth certificates.

Beyond the obvious concerns about driving moms away from medical care for their deliveries, Mr. Pearce has a teeny-tiny Constitutional issue he must deal with in the 14th Amendment:

All persons born or naturalized in the United States, and subject to
the jurisdiction thereof, are citizens of the United States and of the
State wherein they reside.

Mr. Pearce is hoping that "subject to the jurisdiction thereof" can be stretched to say that such persons do not include immigrants.  In fact, the Supreme Court does not seem to have ruled on this specific issue (corrections welcome in comments) but historically they have been extremely loath to place limits on this.  And no one except Mr. Pearce and perhaps a few of his immediate family members believes that barring citizenship to children of legal immigrants will pass Constitutional muster.  And I am pretty sure that no matter how these questions come out, disallowing birth certificates would never survive a court challenge.  I don't think the immigrants' home country would issue a birth certificate in such a case so we would be creating people without a country.

The Libertarian Foreign Policy Problem

Outside of trade policy and climate treaties, I very seldom discuss foreign policy.  First, because it is not my first interest.  Second, because I am not an expert and do not spend the time to keep myself sufficiently informed on the issues to have useful insights.  Third, because of exactly this problem stated so well my Megan McArdle:

I periodically flirt with isolationism, or if you prefer,
"non-intervention". Like most libertarians, I'm attracted to "high
concept" political philosophy: simple rules that can be stated in a
sentence or less. No arguments about causus belli, blowback, or
ultimately unknowable political ramifications; just a simple "yes or
no" test. Did a foreign army invade the United States? For "Yes", press
one; for "No", press two, and go back to arguing about what should
replace child welfare laws in the coming anarcho-capitalist society.

Besides, all the foreigners hate having us there. Why not leave, and
see if absence makes the heart grow fonder? (I suspect that many
nations which have come, over long decades, to regard regional peace as
some sort of natural law, will get a rather nasty surprise. This might
make our influence look, in retrospect, rather appealing.)

But anyone who thinks at all seriously about libertarianism will,
fairly early on, be faced with a very high hurdle. There are a handful
of wars in which American intervention unambiguously halted gross
abuses of human liberty. World War II is one, though many end up going
around, rather than over . . . arguing that the Nazis were the direct
result of American intervention in World War I; or that it was
justified because Japan attacked us1; or that Russia and Britain would have defeated Hitler anyway2.  The American Civil War, however, is by far the highest leap; and the hardest to dodge.

In theory, every state has the right to secede, and the stated
Federal rationale for the Civil War--preserving the union--was the
vilest tyranny. In practice, chattel slavery was a barbarism even
viler.

And so we killed 20-30% of the Confederate Army, not a few of our
own, and uncounted numbers of civilians. That's not counting the
wounded, who probably outnumbered the dead. All we managed to achieve,
at this horrendous cost, was a corrupt and brutal occupation, followed
by the "freedom" of Jim Crow, sharecropping, and "separate but equal". And it was worth it.
The good guys won. We didn't do everything we wanted to, or even
everything we could have, or should have. Jim Crow was putrid. But it
was nonetheless so much better than slavery that it was worth the
horrendous cost--in my opinion, and that of almost everyone in the
world.

For me, a big part of the problem is one of information -- generally, most of the information one might find useful in deciding if X is a good war to pursue is from the government, an institution that demonstrably cannot be trusted based on past history when it makes this case.  Non-interventionism seems the right way to go, except for the
(relatively few) times it is not.  The problems is, to paraphrase the
famous dictum about advertising money, "half (or more) of our wars are
a waste -- we just don't know in advance which half."  Megan uses the
example of the Civil War, saying that that war was worth it because we
got rid of slavery.  But the war by no means began that way.  It wasn't
really until well into the war that both sides were pretty much in
agreement that the war was about ending or retaining slavery. I would argue that in advance, that war looked like an awful, terrible, horrible proposition.  The initial value proposition was "let's go to war so the Feds can have a bigger empire to run."  Only later did it become, "let's go to war to free a large part of our population."  There was a female professor, I forget her name, who made the point that the Emancipation Proclamation changed the war from a bloody waste of time to a moral positive.  But that came years into the fight.

The other problem I have is that the war is fought by, well, the government, the institution for which I have no trust.  One way of thinking about it is that every time we go to war, we put our lives and treasure and very future as a country in the hands of the Post Office.  Eeek.

Update on Kwanzaa

A few posts ago I wrote my annual rant against Kwanzaa as a seven step program to socialism.  I concluded that if blacks in America wanted to stay poor and under the power of others, they could take no better step than to pursue the seven values in Kwanzaa. 

In a stunning gap in my reading, I have never read PJ O'Rourke's "Eat the Rich."  However, David Boaz reports this interesting snippet from the book:

In Tanzania he gapes at the magnificent natural beauty and the
appalling human poverty. Why is Tanzania so poor? he asks people, and
he gets a variety of answers. One answer, he notes, is that Tanzania is
actually not poor by the standards of human history; it has a life
expectancy about that of the United States in 1920, which is a lot
better than humans in 1720, or 1220, or 20. But, he finally concludes,
the real answer is the collective "ujamaa" policies pursued by the sainted post-colonial leader Julius Nyerere. The answer is "ujaama"”they planned it. They planned it, and we paid for it. Rich countries underwrote Tanzanian economic idiocy."

For those not familiar with Kwanzaa, Ujamaa is one of the seven principals celebrated in Kwanzaa.

I am a Crank

As defined by Kevin Drum:

Well, since you asked, the reason I
think Ron Paul is a crank is because he wants to repeal the 16th
amendment, eliminate the personal income tax, abolish the minimum wage,
deep six the Federal Reserve, and return the United States to some kind
of weird quasi-gold standard.

Why Campaign Spending Will Continue to Rise

Because the government has put itself in the job of redistributor-in-chief, and there is just too high of a financial return from influencing who are to be the beneficiaries, and who are to be the sacrificial lambs.  This is particularly the case when Congress can aim dollars at a small group who will give back generously in return, and where the costs are dispersed across large numbers of people, generally consumers or taxpayers or both:

Dan Morgan has another excellent Washington Post report
on our tangled web of farm subsidies, tariffs, government purchases,
and so on. This time he examines the sugar industry's political
contributions"“"more than 900 separate contributions totaling nearly
$1.5 million to candidates, parties and political funds" in 2007 alone.
Most of the money went to Democrats, apparently, which might explain
why Democrats opposed more strongly than Republicans an amendment
to strike the sugar subsidy provisions from the bill. Morgan delights
in pointing out members of Congress such as Rep. Carolyn Maloney of
Queens and Manhattan and Rep. Steven Rothman of bucolic Hackensack and
Fort Lee, New Jersey, who received funds from the sugar magnates and
voted to protect their subsidies despite the fact that they would seem
to have more sugar consumers than sugar growers in their districts....

So $1.5 million is a lot of money, and it seems to have done the trick.
But . . . is it really so much money? According to Morgan, the sugar
provisions in the farm bill are worth $1 billion over 10 years. That's
a huge return on investment. In what other way could a business invest
$1.5 million to reap $1 billion?

The real campaign finance reform that is needed is to get the government out of the business of naming winners and losers.

Update:  More on the sugar fiasco here.

Under the current system, the government guarantees a price floor for
sugar and limits the sugar supply "” placing quotas on domestic
production and quotas and tariffs to limit imports. According to the
Organization for Economic Cooperation and Development, sugar supports
cost American consumers "” who pay double the average world price "” more
than $1.5 billion a year. The system also bars farmers in some of the
poorest countries of the world from selling their sugar here.

The North American Free Trade Agreement is about to topple this
cozy arrangement. Next year, Mexican sugar will be allowed to enter the
United States free of any quotas or duties, threatening a flood of
imports. Rather than taking the opportunity to untangle the sugar
program in this year's farm bill, Congress has decided to bolster the
old system.

Both the House bill, which was passed in July, and the Senate
version, which could be voted on as early as this week, guarantee that
the government will buy from American farmers an amount of sugar
equivalent to 85 percent of domestic consumption "” regardless of how
much comes in from abroad. To add insult to injury, both also increase
the longstanding price guarantee for sugar.

The bills encourage the government to operate the program at no cost
to the budget, by selling the surplus sugar to the ethanol industry.
That's not likely. Ethanol makers will never accept paying anywhere
near sugar's guaranteed price. According to rough estimates from the
Congressional Budget Office, supports for sugar in the House bill could
cost taxpayers from $750 million to $850 million over the next five
years.

We Just Don't Have Enough Taxes

I propose a survey.  We will ask 500 CEO's of large company's and 500 small business owners just one question

1.  Do you agree/disagree with the following statement:  In order to make my business more competitive in international markets, the federal government needs to raise taxes and expand its scope

How many out of the 1000 would answer "Agree?"  Well, at least the number won't be zero, as long as you ask the NY Times:

"¦the taxes collected last year by federal, state and local governments in the
United States amounted to 28.2 percent of gross domestic product. That
rate was one of the lowest among wealthy countries - about five
percentage points of GDP lower than Canada's, and more than eight
points lower than New Zealand's. "¦the meager tax take leaves the United
States ill prepared to compete. From universal health insurance to
decent unemployment insurance, other rich nations provide their
citizens benefits that the U.S. government simply cannot afford.
"¦revenue will prove too low to face the challenges ahead.

I love the part about unemployment insurance particularly -- other countries are more competitive than we are because they pay their citizens more not to work.  Huh?  Daniel Mitchel responds:

The editorial conveniently forgets to explain, though, how America is
less competitive because of supposedly inadequate taxation. Is it that
our per capita GDP is lower than our higher-taxed neighbors in Europe?
No, America's per capita GDP is considerably higher. Is it that our disposable income is lower? It turns out that Americans enjoy a huge advantage in this measure. Is our economy not keeping pace? Interesting thought, but America's been out-performing Europe for a long time. Could higher rates of unemployment be a sign of American weakness? Nice theory, but the data show better job numbers in the United States.

I also would point out the general direction of net immigration, which has always been towards the US from nearly every country in the world rather than the other direction.

The favorite argument du jour for more taxes is that the US has more income inequality than other countries.  Well, that is sort of true.  Our rich are richer than theirs.  But are our poor poorer?  In fact, as I posted here, the data (from a liberal think tank) shows that they are not.   The poor in European countries have a higher percentage of a lower median wage.  When you normalize European income distribution numbers to percentages of the US median wage, you can see our poor do at least as well as those in Europe, while our middle class and rich do better.

Study2

The US poor still trail countries like Switzerland, but that is because of very different immigration realities.  The US numbers for the bottom quartile are weighed down by tens of millions of recent immigrants (both legal and not) whereas those of Switzerland and Norway are not.  If you left out recent immigrants, my guess is that the US poor would be the richest in the world.

Environmental Preservation of a Man-Made Lake

Environmentalists are working to preserve another priceless natural treasure, one that has been on this earth supporting its habitat for, uh, decades.  From the Save the Salton Sea web site:

The
proposed transfer of water from the Imperial Valley to San Diego as
part of the reduction of California's Colorado River use, the possible
reclamation of New River water by Mexico, and the increased evaporation
from the Sea's restoration all threaten to reduce lake levels.  The
proposed transfer of the 300,000 acre feet alone, if inflows are not
replaced, is estimated to drop lake levels by over 16 feet, exposing
almost 70 square miles of sediments.  The result could be potential air
quality problems caused by blowing dust, seaside homes stranded far
from the Sea, and greatly accelerated concentrations of salts and
nutrients.

Of course its freaking drying up.  In a sense, this lake represents the United States' largest industrial spill, as early in the 20th century a couple of Colorado River aqueducts broke and poured water into the Salton basin, creating a brand new sea.  By usual environmentalist arguments, this lake is supposed to dry up, having been an artificial creation of man.  (By the way, as an extra credit task, I challenge you to find anywhere in the web site linked above where they mention that the lake is a man-made accident that is barely 100 years old).

HT:  Maggies Farm

But No One Shops for Health Care

For a while, I have been trying to highlight that the real problem with health care is that consumers who receive the service do not have any incentive to shop for the best price or to make trade offs on marginal procedures based on price.  The only people who have any incentive to shop are 1) people without insurance and 2) people with high deductibles (like me).  Politicians are trying to eliminate the former group, even if they don't want insurance, and programs like Romney's in Massachusetts actually ban high deductible insurance.

Now, Obama is worried about anti-trust:

The consequences of lax enforcement for consumers are clear. Take
health care, for example. There have been over 400 health care mergers
in the last 10 years. The American Medical Association reports that 95%
of insurance markets in the United States are now highly concentrated
and the number of insurers has fallen by just under 20% since 2000.
These changes were supposed to make the industry more efficient, but
instead premiums have skyrocketed, increasing over 87 percent over the
past six years. As president, I will direct my administration to
reinvigorate antitrust enforcement. It will step up review of merger
activity and take effective action to stop or restructure those mergers
that are likely to harm consumer welfare, while quickly clearing those
that do not.

How can these mergers harm consumers when consumers don't shop for the service and don't care about price in the first place?  Candidates like Obama and Clinton are threatening to create single payer systems that use monopsony power combined presumably with the coercive power of government to hammer suppliers.  Is it any wonder that they are joining together to try to gain some sort of bargaining position for themselves?  In the context of what Obama wants to do with health care buying, this can be thought of more as unionizing than merging.

By the way, does anyone else note the irony of Obama, who wants to create a single supplier for health care (the US Government) lamenting concentration in the health care field?

Atlas Shrugged at 50

Apparently Ayn Rand's novel Atlas Shrugged is turning 50, a fact I know only because my fairly libertarian-tilted feed reading list has been deluged of late with retrospectives. 

One of the oddities of posts on Ayn Rand is that every author seems to feel required to say something like "I like her work but I am not in total agreement with everything she says."  Uh, OK.  I'm not clear why this proviso seems so necessary.  I have never heard someone saying "I am a big fan of Mozart" and then following up with "but I don't like all of his works."  I am sure that is true, but they don't bother saying so.   I am a big fan of Ayn Rand, in particular with her non-fiction essays, but of course there are parts of her writing I don't agree with.  For example, I would be less likely to take her advice on managing my love life than I would to eat out of Hannibal Lecter's cookbook.

What Rand did so well in Atlas Shrugged was to take collectivist and anti-rational philosophy and play it forward in practice in a very compelling way. She demonstrated with almost mathematical precision the end results of collectivist philosophy.   The entropic United States in Atlas Shrugged, running down under the weight of socialism, has turned out to be repeatedly prescient.  For this reason, I find her anti-heros to be more memorable.  I see analog's to the Jim Taggerts and Lee Hunsackers and Starnes children nearly every day in the news.  Through these analogs, Rand still helps me place current events in their philosophical context. 

By the way, if you enjoyed her novels but have never read her essays, I encourage you to do so.  The Virtue of Selfishness is a reasonable place to start.  She was not the first person to voice many of these messages (Hayek and others were saying many of the same things) but because of her novels, I, like many others, heard them first from her.

Worst Law I Have Seen In A While

From San Francisco, of course! via Market Power

Prop. G obligates the
Planning Commission to conduct a hearing for any chain store (also
known as "formula retail") proposed in neighborhood commercial
districts.

Formula retail is defined as any retail sales establishment with 11
or more stores in the United States that maintains two or more
standardized features, including decor, facade, color scheme, uniforms,
signage or a trademark.

Incredibly, freaking 58% of the voters passed this turkey.  It's hard to know where to start, but here are a few thoughts:

  • Equal protection?  Anyone?  Buehler? 
  • One of the most obvious punishments of success I have ever seen.  If you only have one store, you are fine.  But if you are succesful and your concept flourishes and you have many stores, then you are automatically penalized.
  • One of the single most anti-consumer pieces of legislation I have ever seen.  Stores using a proven formula that has been succesful in other areas have a sort of consumer good housekeeping seal of approval.  They are by definition retail establishments where many consumers have already voted with their wallet "we like this."  So in effect, proven customer favorites are penalized vs. less proven concepts.  What an odd zoning concept when you put it that way -- we don't want anyone doing business here that has already proven themselves to be succesful with customers.  We only want you if you have no proof customers want what you are selling.

The other night I was staying in Arcadia, CA (a suburb of LA near Pasadena) on what I was told was the old Route 66.  There were a ton of restaurant choices, many of which I did not recognize, and there was a Chile's, which I grew up with in Texas.  I am positive some of those restaurants would have provided me a more satisfying meal than Chile's.  I am also sure some would have been worse.  Sometimes I am in the mood to find something new, but that night I just wanted a predictable experience.  All that stuff San Francisco is trying to penalize -- those standardized features -- bring real value to many consumers.

Environmentalism and the Division of Labor

Opposition to the world-wide division of labor, which creates so much wealth, is not new.  Ghandi, for example, was a strong proponent of maintaining home-based weaving and manufacturing in a wrong-headed defense of individual "self-sufficiency" against the rising tide of division of labor.  It was a philosophy that would keep Indians poor for another several generations, until they finally began entering the modern economy.  Anti-Globalization advocates, famous for trying to destroy downtown Seattle, have also tried to halt the global division of labor.

Most recently, reversing the global division of labor has become an environmental cause, with buy-local movements springing up all over.  Of course, the success of these efforts would be the express train to poverty -- there is a reason we don't manufacture clothing in every county in America, and it is demonstrated in part by this mess.

The argument these buy-local advocates use is that the global cross-transportation of goods is creating environmental problems, including more CO2.  They also argue that keeping production close to consumers would cause consumers to bear whatever environmental costs there are in manufacturing.  These arguments are absurd.  This might be true, if everything else were held constant, most particularly manufacturing efficiency (but probably not even then).  But of course these other elements would not be held constant.  The efficiency losses from loss of scale alone would dwarf savings in manufacturing costs.  And much of transportation costs are incurred moving extractive resources (eg coal, iron) and these transport costs would only go up if manufacturing destinations were more dispersed.  And all of this is without even discussing division of labor.

Today I saw a story about trash that really hammered home this point:

Contrary to current wisdom, packaging can reduce total rubbish produced. The average household in the United States generates one third
less trash each year than does the average household in Mexico,
partly because packaging reduces breakage and food waste. Turning a live chicken into a meal creates food waste. When chickens are processed commercially, the waste goes into marketable products
(such as pet food), instead of into a landfill. Commercial processing of 1,000 chickens requires about 17 pounds of packaging, but it also recycles at least 2,000 pounds of by-products.

When you push animal-slaughter down to the household level, there is a huge loss in efficiency and increase in environmental impact.  Note how industrial farming, a huge bete noir of modern environmentalists, greatly improves recycling and reduces waste.  Yes, industrial farming seems to have a large environmental impact, but that is in many cases just because it is all in one place and visible.  Blowing these operations up does not reduce the damage, it just spreads it around and makes it less visible.  This kind of narrow-focus static analysis has become fairly typical of today's environmentalists.

Environmentalism and the Division of Labor

Opposition to the world-wide division of labor, which creates so much wealth, is not new.  Ghandi, for example, was a strong proponent of maintaining home-based weaving and manufacturing in a wrong-headed defense of individual "self-sufficiency" against the rising tide of division of labor.  It was a philosophy that would keep Indians poor for another several generations, until they finally began entering the modern economy.  Anti-Globalization advocates, famous for trying to destroy downtown Seattle, have also tried to halt the global division of labor.

Most recently, reversing the global division of labor has become an environmental cause, with buy-local movements springing up all over.  Of course, the success of these efforts would be the express train to poverty -- there is a reason we don't manufacture clothing in every county in America, and it is demonstrated in part by this mess.

The argument these buy-local advocates use is that the global cross-transportation of goods is creating environmental problems, including more CO2.  They also argue that keeping production close to consumers would cause consumers to bear whatever environmental costs there are in manufacturing.  These arguments are absurd.  This might be true, if everything else were held constant, most particularly manufacturing efficiency (but probably not even then).  But of course these other elements would not be held constant.  The efficiency losses from loss of scale alone would dwarf savings in manufacturing costs.  And much of transportation costs are incurred moving extractive resources (eg coal, iron) and these transport costs would only go up if manufacturing destinations were more dispersed.  And all of this is without even discussing division of labor.

Today I saw a story about trash that really hammered home this point:

Contrary to current wisdom, packaging can reduce total rubbish produced. The average household in the United States generates one third
less trash each year than does the average household in Mexico,
partly because packaging reduces breakage and food waste. Turning a live chicken into a meal creates food waste. When chickens are processed commercially, the waste goes into marketable products
(such as pet food), instead of into a landfill. Commercial processing of 1,000 chickens requires about 17 pounds of packaging, but it also recycles at least 2,000 pounds of by-products.

When you push animal-slaughter down to the household level, there is a huge loss in efficiency and increase in environmental impact.  Note how industrial farming, a huge bete noir of modern environmentalists, greatly improves recycling and reduces waste.  Yes, industrial farming seems to have a large environmental impact, but that is in many cases just because it is all in one place and visible.  Blowing these operations up does not reduce the damage, it just spreads it around and makes it less visible.  This kind of narrow-focus static analysis has become fairly typical of today's environmentalists.

Chapter 8: Kyoto and Policy Alternatives (Skeptics Guide to Global Warming)

The table of contents for the rest of this paper, . 4A Layman's Guide to Anthropogenic Global Warming (AGW) is here Free pdf of this Climate Skepticism paper is here and print version is sold at cost here

Kyoto Treaty

In the mid-1990's, a number of western nations crafted a CO2-reduction
treated named Kyoto for the city in which the key conference was held.
The treaty called for signatory nations to roll back their CO2 emissions to
below 1990 levels by a target date of 2012.  Japan, Russia, and many
European nations signed the treaty; the United States did not.  In fact,
the pact was ratified by 141 nations, but only calls for CO2 limits in 35 of
these (so the other 106 were really going out on a limb signing it).
China, India, Brazil and most of the third world are exempt from its limits.

We will discuss the costs and benefits of CO2 reduction a bit later.
However, it is instructive to look at why Kyoto was crafted the way it was, and
why the United States refused to sign, even when Al Gore was vice-president.

The most obvious flaw is that the entire developing world, including China,
SE Asia, and India, are exempt. These countries account for 80% of the world's
population and the great majority of growth in CO2 emissions over the next few
decades, and they are not even included. If you doubt this at all, just look at
what the economic recovery in China over the past months has done to oil
prices. China's growth in
hydrocarbon consumption will skyrocket over the coming years
, and China is
predicted to have higher CO2 production than the United States by 2009.

The second major flaw with the treaty is that European nations cleverly
crafted the treaty so that the targets were relatively easy for them to make,
and very difficult for the United States to meet.  Rather than freezing
emissions at current levels at the time of the treaty, or limiting carbon
emission growth rates, the treaty called for emissions to be rolled back to
below 1990 levels. Why 1990? Well, a couple of important things have happened
since 1990, including:

a. European (and Japanese) economic growth has stagnated since 1990, while
the US economy has grown like crazy. By setting the target date back to 1990,
rather than just starting from day the treaty was signed, the treaty
effectively called for a roll-back of economic growth in the US that other
major world economies did not enjoy.

b. In 1990, Germany was reunified, and Germany inherited a whole country
full of polluting inefficient factories from the old Soviet days. Most of the
dirty and inefficient Soviet-era factories have been closed since 1990, giving
Germany an instant one-time leg up in meeting the treaty targets, but only if
the date was set back to 1990, rather than starting at the time of treaty
signing.

c. Since 1990, the British have had a similar effect from the closing of a
number of old dirty Midlands coal mines and switching fuels from very dirty
coal burned inefficiently to more modern gas and oil furnaces and nuclear
power.

d. Since 1990, the Russians have an even greater such effect, given low
economic growth and the closure of thousands of atrociously inefficient
communist-era industries.

It is flabbergasting that US representatives could allow the US to get so
thoroughly out-manuevered in these negotiations. Does anyone in the US really
want to roll back the economic gains of the nineties, while giving the rest of
the world a free pass? Anyway, as a result of these flaws, and again having
little to do with the global warming argument itself, the Senate
voted 95-0 in 1997 not to sign or ratify the treaty unless these flaws (which
still exist in the treaty) were fixed
.  Then-Vice-President Al Gore
agreed that the treaty should not be signed without modifications, which were
never made and which Europeans were never going to make.

By the way, enough time has elapsed that we have data on the
progress of various countries in meeting these targets.  And if you leave
out various accounting games with offsets of dubious value, most all the
European nations, despite all the advantages described above, are still missing
their targets.  The political will simply does not exist to hamstring
their economies to the extent necessary to roll back CO2 growth.  Actual
growth rates for CO2 emissions have been (source UN):

 

 

 

 

 

 

 

 

 

 

 

 

United States

Europea Union

1990-1995

6.4%

-2.2%

1996-2000

10.1%

2.2%

2001-2004

2.1%

4.5%

You can see that the Europeans positioned themselves well in
the 1990's to make their targets.  Realize that as the treaty was negotiated,
they already had a good idea of these numbers for 1990-1995 and even a few
years beyond.  They knew that by selecting a 1990 baseline, they were
already on target to meet the goals and the US would be far behind.
Again, realize that the 1990-2000 EU performance on CO2 production had nothing
to do with post-Kyoto regulatory responses and everything to do with the
economic fundamentals we outlined above that would have existed with or without
the treaty.

Since 2000, however, it has been a different story.
European emissions have increased as their economies have recovered, at the
same time the US experienced a post-9/11 slowdown.

By the way, the US is generally the great Satan in AGW
circles because its per capita CO2 production is the highest in the
world.  But this is in part because our economic output per capita is
close to the highest in the world.  The US is about in
the middle of the pack in efficiency
, though behind many European countries
which have much higher fuel taxes and heavier nuclear investments.

As an interesting side note, the US per capita CO2
emissions, as show below, have actually been flat to down since the early
1970's.  To the extent that Europe is doing better at CO2 reduction than
the US, it may actually be more of an artifact of their declining populations
vs. America's continued growth.

Finally, if you get really tired of the US-bashing, you can
take some comfort that though the US is the #1 per capita producer of CO2, of
which we are uncertain is even harmful, we have done a fabulous job reducing
many other pollutants we are much more certain are harmful.  For example,
the US has much lower SO2
production
than most European nations and the
water quality is better
.  One could argue that the US has spent its
abatement dollars on things that really matter.

Cost of the
Solutions vs. the Benefits:  Why Warmer but Richer may be Better than
Colder and Poorer

If you get beyond the hard core of near religious believers in the massive
warming scenarios, the average global warming supporter would answer this paper
by saying: "Yes there is a lot of uncertainty, but though the doomsday
warming scenarios via runaway positive feedback in the climate can't be proven,
they are so bad that we need to cut back on CO2 production just to be on the
safe side."

This would be a perfectly reasonable approach if cutting back on CO2
production was nearly cost-free.  But it is not.  The burning of
hydrocarbons that create CO2 is an entrenched part of our lives and our
economies. Forty years ago we might have had an easier time of it, as we were
on a path to dramatically cut back on CO2 production via what is still the only
viable technology to massively replace fossil fuel consumption -- nuclear
power.  Ironically, it was environmentalists that shut down this effort,
and power industries around the world replaced capacity that would have gone
nuclear mostly with coal, the worst fossil fuel in terms of CO2 production (per
BTU of power, Nuclear and hydrogen produce no CO2, natural gas produces some,
gasoline produces more, and coal produces the most).

Just halting CO2 production at current levels (not even rolling it back)
would knock several points off of world economic growth.  Every point of
economic growth you knock off guarantees you that you will get more poverty,
more disease, more early death.  If you could, politically, even make such
a freeze stick, you would lock China and India, nearly 2 billion people, into
continued poverty just when they were about to escape it.  You would in
the process make the world less secure, because growing wealth is always the
best way to maintain peace.  Right now, China can become wealthier from
peaceful internal growth than it can from trying to loot its neighbors.
But in a zero sum world created by a CO2 freeze, countries like China would
have much more incentive to create trouble outside its borders.  This
tradeoff is often referred to as a cooler but poorer world vs. a richer but
warmer world.  Its not at all clear which is better.
 

What impact, warming?

We've already discussed just how much the popular media has overblown the
effect of warming.  Sea levels may rise, but only by 15 inches in one
hundred years, and even that based on arguably over-inflated IPCC models.
There is no evidence that weather patterns will be more severe, or that
diseases will spread, or that species will be threatened by warming.  And,
since most of the warming has been and will be concentrated in winter and
nights, we will see rising temperatures more in a narrowing of temperature
variability rather than a drastic increase in summer high temperatures.
Growing seasons, in turn, will be longer and deaths from cold, which tend to
outnumber heat-related deaths, will decline. 

What impact, Intervention?

While the Kyoto treaty was a massively-flawed document, with current
technologies a Kyoto type cap and trade approach is about the only way we have
available to slow or halt CO2 emissions.  And, unlike the impact of
warming on the world, the impact of such a intervention is very well understood
by the world's economists and seldom in fact disputed by global warming
advocates.  Capping world CO2 production would by definition cap world
economic growth at the rate of energy efficiency growth, a number at least two
points below projected real economic growth.  In addition, investment
would shift from microprocessors and consumer products and new drug research
and even other types of pollution control to energy. The effects of two points
or more lower economic growth over 50-100 years can be devastating:

  • Remember the power of compounded growth rates we discussed earlier.  A world real economic growth rate of 4% yields income fifty times higher in a hundred years.  A world real economic growth rate two points lower yields income only 7 times higher in 100 years.  So a two point reduction in growth rates reduces incomes in 100 years by a factor of seven!  This is enormous.  It means, literally, that on average everyone in a cooler world would make 1/7 what they would make in a warmer world.
  • Currently, there are perhaps a billion people, mostly in Asia, poised to exit millennia of subsistence poverty and reach the middle class.  Global warming intervention will likely consign these folks to continued poverty.  Does anyone remember that old ethics problem, the one about having a button that every time you pushed it, you got a thousand dollars but someone in China died.  Global warming intervention strikes me as a similar issue - intellectuals in the west
         feel better about man being in harmony with the Earth but a billion Asians get locked into poverty.
  • Lower world economic growth will in turn considerably
    shorten the lives of billions of the world's poor
  • A poorer
    world is more vulnerable to natural disasters
    .  While AGW
    advocates worry (needlessly) about hurricanes and tornados in a warmer
    world, what we can be certain of is that these storms will be more devastating and kill more people in a poorer world than a richer one.
  • The unprecedented progress the world is experiencing in
    slowing birth rates, due entirely to rising wealth, will likely be
    reversed.  A cooler world will not only be poorer, but likely more populous as well.  It will also be a hungrier world, particularly if
    a cooler world does indeed result in lower food production than a warmer
    world
  • A transformation to a prosperous middle class in Asia will
    make the world a much safer and more stable place, particularly vs. a cooler world with a billion Asian poor people who know that their march to progress was halted by western meddling.
  • A cooler world would ironically likely be an
    environmentally messier world.  While anti-growth folks blame all
    environmental messes on progress, the fact is that environmental impact is
         a sort of inverted parabola when plotted against growth.  Early
    industrial growth tends to pollute things up, but further growth and
    wealth provides the resources and technology to clean things up.  The
         US was a cleaner place in 1970 than in 1900, and a cleaner place today
    than in 1970.  Stopping or drastically slowing worldwide growth would
    lock much of the developing world, countries like Brazil and China and
    Indonesia, into the top end of the parabola.  Is Brazil, for example, more likely to burn up its rain forest if it is poor or rich?

The Commons Blog
links to this
study
by Indur Goklany on just this topic:

If global warming is real and its effects will one
day be as devastating as some believe is likely, then greater economic growth
would, by increasing greenhouse gas (GHG) emissions, sooner or later lead to
greater damages from climate change. On the other hand, by increasing wealth,
technological development and human capital, economic growth would broadly
increase human well-being, and society's capacity to reduce climate change
damages via adaptation or mitigation. Hence, the conundrum: at what point in
the future would the benefits of a richer and more technologically advanced
world be canceled out by the costs of a warmer world?

Indur Goklany attempted to shed light on this
conundrum in a recent paper presented at the 25th Annual North American
Conference of the US Association for Energy Economics, in Denver (Sept. 21,
2005). His paper "” "Is a
richer-but-warmer world better than poorer-but-cooler worlds?"
"” which can
be found here,
draws upon the results of a series of UK Government-sponsored studies which
employed the IPCC's emissions scenarios to project future climate change
between 1990 and 2100 and its global impacts on various climate-sensitive
determinants of human and environmental well-being (such as malaria, hunger,
water shortage, coastal flooding, and habitat loss). The results indicate that
notwithstanding climate change, through much of this century, human well-being
is likely to be highest in the richest-but-warmest world and lower in
poorer-but-cooler worlds. With respect to environmental well-being, matters may
be best under the former world for some critical environmental indicators through
2085-2100, but not necessarily for others.

This conclusion casts doubt on a key premise
implicit in all calls to take actions now that would go beyond "no-regret"
policies in order to reduce GHG emissions in the near term, namely, a
richer-but-warmer world will, before too long, necessarily be worse for the
globe than a poorer-but-cooler world. But the above analysis suggests this is
unlikely to happen, at least until after the 2085-2100 period.

Policy Alternatives

Above, we looked at the effect of a cap and trade scheme, which would have
about the same effect as some type of carbon tax.  This is the best
possible approach, if an interventionist approach is taken.  Any other is
worse.

The primary other alternative bandied about by scientists is some type of
alternative energy Manhattan project.  This can only be a disaster.
Many scientists are technocratic
fascists at heart
, and are convinced that if only they could run the
economy or some part of it, instead of relying on this messy bottom-up
spontaneous order we call the marketplace, things, well, would be better.
The problem is that scientists, no
matter how smart they are, miss with their bets
because the economy, and
thus the lowest cost approach to less CO2 production, is too complicated for
anyone to understand or manage.  And even if the scientists stumbled on
the right approaches, the political process would just screw the solution
up.  Probably the number one alternative energy program in the US is
ethanol subsidies, which are scientifically insane since ethanol
actually increases rather than reduces fossil fuel consumption
.
Political subsidies almost always lead to investments tailored just to capture
the subsidy, that do little to solve the underlying problem.  In Arizona,
we have thousands of cars with subsidized conversions to engines that burn
multiple fuels but never burn anything but gasoline.  In California, there
are hundreds of massive windmills that never turn, having already served their
purpose to capture a subsidy.  In California, the state bent over
backwards to encourage electric cars, but in fact a different technology, the
hybrid, has taken off.

Besides, when has this government led technology revolution approach ever
worked?  I would say twice - once for the Atomic bomb and the second time
to get to the moon.  And what did either get us?  The first got us
something I am not sure we even should want, with very little carryover into
the civilian world.  The second got us a big scientific dead end, and
probably set back our space efforts by getting us to the moon 30 years or so
before we were really ready to do something about it or follow up the efforts.

If we must intervene to limit CO2, we should jack up the price of fossil
fuels with taxes, or institute a cap and trade scheme which will result in
about the same price increase, and the market through millions of individual
efforts will find the lowest cost net way to reach whatever energy consumption
level you want with the least possible cost.  (The only real current
alternative that is rapidly deploy-able to reduce CO2 emissions anyway is nuclear
power
, which could be a solution but was killed by...the very people now
wailing about global warming.)

The table of contents for the rest of this paper, . 4A Layman's Guide to Anthropogenic Global Warming (AGW) is here Free pdf of this Climate Skepticism paper is here and print version is sold at cost here

The open comment thread for this paper can be found here. 

Universal Health Care Trojan Horse

For quite a while, I have been arguing that universal health care is a Trojan horse for freedom-robbing government interventions into our personal habits (and micro-habits).  Suddenly activities that used to be personal choices that affected only ourselves (e.g. unhealthy diet) become public interest questions affecting government-funded health care costs.

Jonah Goldberg, via Ronald Bailey, seems to agree:

The British government recently unveiled
plans for a massive crackdown on "excessive drinking," particularly
among the middle class. It will include all of the familiar tactics of
public health officials: dire new warnings on wine bottles,
public-awareness campaigns, scolding from men and women in lab coats...

Britain
still subscribes to a system where health care is for the most part
socialized. When the bureaucrat-priesthood of the National Health
Service decides that a certain behavior is unacceptable, the
consequences potentially involve more than scolding. For example, in
2005, Britain's health service started refusing certain surgeries for
fat people. An official behind the decision conceded that one of the
considerations was cost. Fat people would benefit from the surgery
less, and so they deserved it less. As Tony Harrison, a British
health-care expert, explained to the Toronto Sun at the time, "Rationing is a reality when funding is limited."

But
it's impossible to distinguish such cost-cutting judgments from moral
ones. The reasoning is obvious: Fat people, smokers and "” soon "”
drinkers deserve less health care because they bring their problems on
themselves. In short, they deserve it. This is a perfectly logical
perspective, and if I were in charge of everybody's health care, I
would probably resort to similar logic.

But I'm not in charge
of everybody's health care. Nor should anyone else be. In a free-market
system, bad behavior will still have high costs personally and
financially, but those costs are more likely to borne by you and you
alone. The more you socialize the costs of personal liberty, the more
license you give others to regulate it.

Universal health care,
once again all the rage in the United States, is an invitation for
scolds to become nannies. I think many Brits understand this all too
well, which is one reason why they want to fight the scolds here and
now.

I like his term "socializing the costs of personal liberty."  Its a good description of much of what is wrong with government today.

Socialism in an Engineering Article

I am writing a paper on climate models, and an important part of that discussion is on positive feedback (most climate models get large changes in future climate through the liberal use of positive feedback assumptions).  I was looking around the Internet for a nice pithy explanation of positive feedback.  This one on Wikipedia was fine, until I got wacked in the face with the last line (emphasis added)

The end result of a positive feedback is often amplifying
and "explosive." That is, a small perturbation will result in big
changes. This feedback, in turn, will drive the system even further
away from its own original setpoint, thus amplifying the original perturbation signal, and eventually become explosive because the amplification often grows exponentially
( with the first order positive feedback), or even hyperbolically (with
the second order positive feedback). An intuitive example is "the rich
get richer, and the poor get poorer."

Wow, intuitive?  How can a statement that is wrong in at least two major ways be intuitive?  First, the poor generally do not get poorer.  In fact, the poor in the United States are in many ways better off than the richest men of the mid-nineteenth century (particular example linked is for the middle class, but many of the same arguments hold for the poor), and better off than the middle class of many nations.  Second, while it might be arguable that there is a positive feedback loop that helps the rich get richer, no such loop is even possible with the very poorest.  Without going into too much detail, the simplest explanation is that with income you can't go below zero.  What people really mean by this statement is that the poor get poorer relative to the rich, rather than on an absolute scale.  Which of course has little to do with positive feedback.  By the way, the rest of the article is equally bizarre, giving more examples of social phenomena that are only weakly linked to positive feedback (Internet echo chamber effect?) rather than physical processes.  It looks like a physics article written by a politics major.

Here are some alternative non-socialist examples of positive feedback from the physical world that actually have the virtue of being true:  Nuclear fission, some exothermic chemical reactions, and acoustic feedback.  In actuality, since positive feedback reactions are so explosive and unstable, they are very uncommon in nature, which is part of the argument against how climate models are constructed.

If you don't know the connection between climate models and positive feedback, see here

A Nation of Slaveholders

With the northern victory in the Civil War, and the subsequent passage of the 13th amendment, slavery was formally ended in this country.  Specifically, the 13th amendment stated:

Neither slavery nor involuntary servitude, except as a punishment for
crime whereof the party shall have been duly convicted, shall exist
within the United States, or any place subject to their jurisdiction.

Unfortunately, over a century later, slavery has returned to the United States.  Today, through the exercise of political power and the redistribution of wealth that should never have been Constitutional, 55% of Americans hold the other 45% in bondage, living off the product of their efforts just as surely as the white plantation owners of the Old South lived off the sweat of their African slaves.  The basis for this new servitude, however,  is not race, or religion, or national origin, but productivity. (via TJIC)

From the Christian Science Monitor:

Slightly over half of all Americans - 52.6 percent - now receive
significant income from government programs, according to an analysis
by Gary Shilling, an economist in Springfield, N.J. That's up from 49.4
percent in 2000 and far above the 28.3 percent of Americans in 1950. If
the trend continues, the percentage could rise within ten years to pass
55 percent, where it stood in 1980 on the eve of President's Reagan's
move to scale back the size of government.

Meanwhile, Ari Fleischer writes in today's WSJ (sub req) that the
top 1% of income earners pay 37% of total income taxes, the top 10% of
income earners pay 71% of total income taxes, and the top 40% of income
earners pay 99% of total income taxes.

The latter analysis is a bit off because it does not include payroll taxes, but if you include these taxes you still have under 50% of Americans paying virtually all the taxes (table at top of this page includes payroll taxes

The second greatest failing of the Constitution as originally drafted (the first being legality of slavery) is the lack of clear protections for property and commerce.  As a result, the only protection we have against full confiscation of everything we own is the whim of the electorate.  Now that a clear majority of voters are on the receiving end of money confiscated from a minority of voters, how good is this last protection? 

We have become a nation of slaveholders, with the majority holding the productive minority in bondage.  Inserting government in the middle of this process as an agent, so the recipients of this slave labor don't have to get their own hands dirty, does not change the nature of the relationship one bit.  It just pretties things up for our conscience.

Update:  Is the word "slavery" over the top?  Maybe, and I guess I could be accused of trivializing the true horrors of African slavery in the 19th century.  So substitute the word "serfdom" for "slavery". 

"Privilege" to Conduct Commerce

Almost every piece of government waste paper I have to fill out has the power to irritate me  (and doing business in 13 states, I get a lot of such garbage).  But the one thing that sets me off more than any other is when I get forms from a state government that say I owe a tax for the "privilege" of conducting commerce.  Arizona calls their sales tax a "transaction privilege tax" and Texas calls their franchise tax a "privilege" tax.  In fact, the Texas form is covered with the word "privilege" -- for example, the form I am looking at covers the "privilege period" of January-December 2007.

By calling commerce, and by extension property, a privilege that can only be exercised with a license from the government, the government is saying that the right to trade and make transactions with other people flows not from our humanity, but from the government.  These "privilege" taxes and licenses are based on the theory that man does not have any inherent right to trade freely with other men, and that ability can only be granted (or taken away) at the whim of our masters in the state government. 

The Supreme Court is acknowledged to have the power to strike down laws it deems to be in conflict with our Constitution.  But what about laws that violate something more fundamental than the Constitution?  What about laws that violate the very theory of government on which the United States was founded?    We often think about the Constitution as the top of the legal hierarchy, but I would suggest that sitting even higher than the words of the Constitution is the idea that our rights flow from God, or in a more secular interpretation, from the very fact of our humanity, and what power government has is given to it (and can be taken away) by its citizens, NOT THE OTHER WAY AROUND.

The more correct statement, then, would be that we citizens have given government officials the privilege of regulating and taxing commerce  (a privilege, I might add, that they have abused and we should take away).

Update: 

"Freedom is not a gift bestowed upon us by other men, but a right that belongs to us by the laws of God and nature."  --- Ben Franklin

Fixating on the Wrong Thing

For the last couple of years, much of the debate about detention at Gitmo has focused  on silly arguments about torture.  Flushing a Koran -- Torture!  Showing a picture of a naked girl -- Torture!  The comfy chair  -- Torture!  As I wrote in this post,

Here is my fervent hope:  If I ever find myself imprisoned by hostile
forces, I pray that they will torture me by sitting me in a chair and
having me watch them flush books down the toilet.

If I bought into the theory of Rovian infallibility, I might argue that this was all a clever trick to distract the country with the left hand while the right was really doing the damage.  Whether planned or not, the media certainly fixated on the left hand, while the right was doing this:

In a series of probing and sometimes testy exchanges with a government
lawyer, two of three judges on a federal appeals court panel here
indicated Thursday that they might not be prepared to accept the Bush
administration's claim that it has the unilateral power to detain
people it calls enemy combatants....

"What would prevent you from plucking up anyone and saying, "˜You are
an enemy combatant?' " Judge Roger L. Gregory of the United States
Court of Appeals for the Fourth Circuit asked the administration's
lawyer, David B. Salmons.

Mr. Salmons said the executive branch
was entitled to make that judgment in wartime without interference from
the courts. "A citizen, no less than an alien, can be an enemy
combatant," he added.

The real threat to freedom and the American way here was always the Bush administration's incredible theory that it had a right to name anyone a combatant and then detain them forever, without any sort of independent review or appeal.  Particularly in a "war" with no defined enemy.  It's incredible to me that the Congress and courts have let this slide as long as they have, and good to see some scrutiny may finally be applied.  Hat tip: Reason.  More here, here, here.  Looking back through my archives, I seem to have made this same point months ago:

One of the problems I have making common cause with many of the
civil rights critics of the Bush administration is that they tend to
hurt legitimate civil rights by exaggerating their claims into the
ridiculous. 

A good example is detentions at Gitmo.  I believe strongly that the
Bush administration's invented concept of unlimited-length detentions
without trial or judicial review is obscene and needed to be halted.
But critics of Bush quickly shifted the focus to "torture" at Gitmo, a
charge that in light of the facts appears ridiculous
to most rational people, including me.  As a result, the
administration's desire to hold people indefinitely without due process
has been aided by Bush's critics, who have shifted the focus to a
subject that is much more easily defended on the facts.

Oops, Our Bad. Sorry.

I thought this was pretty funny, via TJIC.  The Fed apologizes for the Great Depression:

Ben Shalom Bernanke (born December 13, 1953)"¦ is an American
macroeconomist who is the current Chairman of the Board of Governors of
the United States Federal Reserve ("the Fed")"¦

On Milton Friedman's Ninetieth Birthday, Nov. 8, 2002 he
stated: "Let me end my talk by abusing slightly my status as an
official representative of the Federal Reserve. I would like to say to
Milton and Rose: Regarding the Great Depression. You're right, we did
it. We're very sorry. But thanks to you, we won't do it again.""¦

The quote is from Wikipedia, so I take it with a huge grain of salt.  Anyone have a link to another source, because the quote is pretty funny.  Good to see the government take responsibility for the economic messes it creates, even if 75 years late.  Of course, 75 years after the Hawley-Smoot tariffs helped throw a recession into the Great Depression, Congress is about to launch us down the same protectionist path, so don't give the feds too much credit.

Manufacturing Jobs Myth

From TJIC:

"America cannot be great if most of its workers are in the service
sector"¦" Senator Byron Dorgan (D-North Dakota) declares in his book
"Take This Job and Ship It,""¦

This typical reading of historic manufacturing and service jobs stats is ignorant.  My first rule of quoting a statistic, which I admit I sometimes violate, is to make sure you understand how it is calculated.  Nothing could be truer than with manufacturing jobs statistics.

The best way to illustrate this is by example.  Let's takean automobile assembly plant circa 1955.  Typically, a large manufacturing plant would have a staff to do everything the factory needed.  They had people on staff to clean the bathrooms, to paint the walls, and to perform equipment maintenance.  The people who did these jobs were all classified as manufacturing workers, because they worked in a manufacturing plant.  Since 1955, this plant has likely changed the way it staffs these type jobs.  It still cleans the bathrooms, but it has a contract with an outside janitorial firm who comes in each night to do so.  It still paints the walls, but has a contract with a painting contractor to do so.  And it still needs the equipment to be maintained, but probably has contracts with many of the equipment suppliers to do the maintenance.

So, today, there might be the exact same number of people in the factory cleaning bathrooms and maintaining equipment, but now the government classifies them as "service workers" because they work for a service company, rather than manufacturing workers.  Nothing has really changed in the work that people do, but government stats will show a large shift from manufacturing to service employment.

Is this kind of statistical shift really worth complaining about?  By complaining about the shift of jobs from manufacturing to services, you are first and foremost complaining about a chimera that is an artifact of how the statistics are compiled.  So if we were to correct for this, would manufacturing jobs be up or down?  I don't know, but given on the wailing about "shrinkage" of manufacturing in the US, I bet you would not have guessed this:

Considering total goods production (including things like mining and
agriculture in addition to manufacturing), real goods production as a
share of real (inflation-adjusted) Gross Domestic Product (GDP) is
close to its all-time high.

  • In the second quarter of 2003, real goods
    production was 39.2 percent of real GDP; the highest annual figure ever
    recorded was 40 percent in 2000. See the Figure.

  • By
    contrast, in the "good old days" of the 1940s, 1950s and 1960s, the
    United States actually produced far fewer goods as a share of total
    output, reaching 35.5 percent in the midst of World War II.

So manufacturing is close to an all time high as a percentage of the economy.  There is absolutely no way anyone who looks at this graph can, with a straight face, talk about the "shrinking" of America's manufacturing sector.   If manufacturing employment is somehow down vs. some historical "norm", then that means that manufacturing productivity has gone up faster than service productivity.  So what?  And to the extent there has been a shift, as TJIC writes, who cares?

Yeah, we hates the service sector.

Who needs lawn care, child care, food preparation, legal
services, stockbrokers, professors, blogs, actors, and contract
software engineers ?

Let's get everyone involved in good 19th century atoms-and-mortar activities like raising corn and smelting iron.

Sure, some flakes argue "those are jobs for machines", but we
aim to recapture the glory of our national greatness, when men were
men, women were women, America was strong, and the average life lasted
50 years and ended with pneumonia, a threshing accident, or a crushing
injury.

The same populists who complain today about the shift from manufacturing to services complained a hundred years ago about the shift from agriculture to manufacturing.  And I am sure all of us would much rather be waking up with the sun each day to push a plow.