Sunday, November 29, 2009

Jobs Summit: 20% Unemployment- No Surprise

This week our leaders in DC held a job summit, but I'm not sure how open they were to the current evidence about unemployment. Last October the Wall Street Journal reported that teenage unemployment in September was at 25.9%. (link). As reported this is very close to what economist David Neumark of the University of California predicted would happen with the increase in minimum wages.

A recent Washington Post story (link) notes that unemployment for 16-24 year olds was at 19.1% in October while it was at 34.5% for African Americans in the same age group.

Again, this is not surprising and is consistent with the evidence (see references below).

Of course we have to take into consideration that we are in the worst recession since the Carter years, and that would obviously have an impact on unemployment in addition to the effects of raising the minimum wage. However, we have to ask, since we are in the worst recession in 30 years, why has noone discussed repealing the recent increases when they are know to be so harmful to low income earners? As the Washington Post story above noted, the problem is not just the temporary issue of not having a job:

"Jobless teens are more likely to be jobless twenty-somethings. Once forced onto the sidelines, they likely will not catch up financially for many years. That is the case even for young people of all ethnic groups who graduate from college. "

We also have to consider the other polices coming down the pipeline. With the near trillion dollar stimulus package, we still have over 10% unemployment overall. The world's best economists predicted that the stimulus would be ineffective,(Cole & Ohanion, Prescott, Barro, Becker, Rizzo, Mankiw, Sargent) and it seems we are repeating the same mistakes made during the Great Depression that gave us 25% unemployment.

With the expiration of the Bush tax cuts, small businesses and farms are set for huge tax increases. ( see Taxing our Farms and Businesses via AgWeb). Add to this the uncertainty of increased energy and health care taxes as well as out of control deficits and it doesn't provide much incentive for creating jobs. We saw under both Reagan and Bush that cutting marginal tax rates can help stimulate the economy and reduce deficits ( see Evidence on Tax Cuts via Agweb) Recent research from Harvard University concludes that ' Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases.' (link via Greg Mankiw) It also concludes that deficits are better handled through spending cuts than tax increases.

Some in D.C. remain stubborn. Recently when Texas representative Michael Burgess suggested that we offer tax relief to business and have government get out of their way, Treasury Secretary Timothy Geithner responded:

“That broad philosophy helped produce the worst financial crisis and the worst recession we’d seen in generations.”


This shows either ignorance or rejection of the current evidence, or it shows that Geithner's priorities are more concerned with philosophical and theoretical ideals than results.

With climate gate, it might have been possible to keep the evidence about climate change behind closed doors. But with the economy, everything is out in the open and the evidence is freely available. This makes more government spending and regulation a very hard sell, and it is surprising that some policy makers continue to try to make the case for it. What's not surprising is the continued high rates of unemployment.

References:

Geithner’s Crisis Sleepwalk Is Reason He Must Go: Kevin Hassett

Nov. 23 (Bloomberg)

The Young and the Jobless Wall Street Journal Oct 3, 2009

Blacks hit hard by economy's punch. Washington Post Staff Writer
Tuesday, November 24, 2009 (link)

Behrman, Jere R.; Sickles, Robin C.; and Taubman, Paul. 1983. The Impact of Minimum Wages on the Distributions of Earnings for Major Race-Sex Groups: A Dynamic Analysis. American Economic Review, vol. 73 (September): 766-778.

Linneman, Peter. 1982. The Economic Impacts of Minimum Wage Laws: A New Look at an Old Question. Journal of Political Economy, vol. 90 (June): 443-469.

Hashimoto, Masanori. 1982. Minimum Wage Effects on Training on the Job. American Economic Review, vol. 72 (December): 1070-1087.

Climategate

Recently, a lot of headlines have been made about hacked emails that involved questionable exchanges between climate scientists. Reading between the lines, the emails imply that there was a conscious effort among climate scientists to massage data (possibly omitting data that would weaken their conclusions) as well as blackball authors of peer reviewed research that came to conclusions questionable of climate change. Taking this a step forward, one might even speculate that human influence on climate change, and evidence for taking strong action to stop it has been largely fabricated. (for a more detailed discussion of this see "Rigging a Climate 'Consensus'" from the Wall Street Journal and here from the Telegraph)

However, as I pointed out before, the 'consensus' itself was already pretty shaky.( See my post 'Defining Consensus' for more info).If we accept the IPCC 4th Assessment Report as consensus,(which is the subject of the climategate emails mentioned above) we get the basic conclusion that 9/10 experts believe that humans have a net warming effect on the climate, but when it comes to conclusions about the impact of this warming, they are only 50-66% certain that this will lead to drastic climatic events, droughts, etc.

It is actually appalling, that even pre-climategate, leaders would be willing to take drastic control of our daily lives to prevent climate change, based on such weak conclusions. Little effort is made by those in the media, or politicians, to point out the distinction between forecasts by scientists and 'scientific' forecasts. The controversial 'consensus' has been based largely on 'forecasts by scientists', not necessarily scientific forecasts. As pointed out by Green and Armstrong, in the journal Energy and Environment, ( regarding the IPCC's WG1 Report on climate change):

"The forecasting procedures that were described violated 72 [out of 140 established scientific forecasting principles] principles. Many of the violations were, by themselves, critical. The forecasts in the Report were not the outcome of scientific procedures. In effect, they were the opinions of scientists transformed by mathematics and obscured by complex writing. Research on forecasting has shown that experts’ predictions are not useful in situations involving uncertainly and complexity. We have been unable to identify any scientific forecasts of global warming. Claims that the Earth will get warmer have no more credence than saying that it will get colder."

But, even if we dismiss the climate gate email, and forget about restoring science to its proper place in public policy deliberations, even if we accept the 'consensus' as it is, we still have very little basis for drastic and timely action regarding climate change. Even taking the science as given, there is no consensus among economists about what the price of carbon should be. Two of the more prominent economists in the field of climate change, have reached drastically different results.

Nordhaus ( Using the DICE-2007 model, and based on the science of the IPCC Fourth Assessment)prices carbon at about $30/ ton, with the average person in the US generating about 5tons/yr, for a total of about $150/year, or .09 /gallon of gas and .01/kwh for electricity. However, the Stern Proposal( proposed by another economist in the U.K) estimates the damage from global warming to be closer to $300/ton carbon for the next two decades. In this case we are looking at increasing gas prices by about $1.20/gallon.

There is just too much uncertainty at all levels of analysis to recommend major changes to combat climate change, especially given the sacrifices that would have to be made in terms of jobs and economic growth. A better approach for dealing with climate change or any environmental problem is to develop resilient market based economies that are able to invest in the technology necessary to adapt to ever changing resource constraints.

Reference:

GLOBAL WARMING: FORECASTS BY SCIENTISTS VERSUS SCIENTIFIC FORECASTS
Kesten C. Green and J. Scott Armstrong
ENERGY &
ENVIRONMENT
VOLUME 18 No. 7+8 2007

Friday, November 27, 2009

Thanksgiving or Ingratitutde

The First Thanksgiving offered a great lesson in how free markets and private property can lead to agricultural abundance. In many ways we have done well in learning this. Family farmers account for 98% of all farms and produce 96% of all the food in this country. Their own pursuit of self intrerest utilizing markets and private property has led them to adopt GPS, pharmaceutical technology, and biotechnology to produce an abundant food supply, while drastically reducing our impact on the environment. These institutions, capitalism, property rights, and the family farm put the 'S' in sustenance and sustainablity.

Unlike the first Thanksgiving, this abundance is commonplace for the vast majority of Americans today. For many, little physical exertion is required to enjoy access to a fulfilling meal. This combination of abundant cheap food and a sedentary lifestyle certainly has contributed to issues related to health and obesity. Unfortunately, instead of dealing with this issue in a productive, thoughtful, and thankful way, the reaction by many has been spiteful and ingracious- biting the proverbial 'hand that feeds us.'

One way this attitide has come out is what can only be described as a biggoted and condescending attitude towards obese members of the population. PETA has intentions of creating billboards with taglines like:

"The 400-Pound Virgin: Lose Weight. Look Great. Get Laid. Go Vegan."

Lincoln University, in Pennsylvania, has cast aside grand ideals of enlightenment and tolerance through education and research and instead opted for special descrimintory education requirements for obese students.

Many activists and even the media have also started leveling attacks against family farmers using degrading terms like 'industrial agricultrue','factory farming', and 'frankenfoods' to describe the methods most family farmers use to produce our safe and sustainable food supply. By using these terms, activists are able to build resentment towards these technologies, while few people realize their proposals would have a direct negative impact on the family farms they may claim to be 'liberating' from the (ficticious) grip of big agribusiness. They are literally trying to coax us into biting the hand that feeds us.

Celebrity authors like Michael Pollan are leading the charge, linking industrial agriculture (i.e. family farms) with climate change and obestiy among other things. Retailors have engaged in misleading advertising gimmicks, labeling some foods with messages like 'contains no High Fructose Corn Syrup or Artificial Ingredients' while the ingredients list sweeteners such as cane or beat sugar that contain similar levels of fructose. ( & giving the impression that HFCS is an artificial ingredient) Lawmakers, desperate for revenue and popular appeal in times when both are scant, are proposing sugar taxes and calorie added taxes based on little evidence to prove their effectivness and false premises of a correlation with consumption of these foods and obesity.

Instead of showing thanksgiving for our way of life, and modern production techniques that have made it possible, many in society have shown ingratitutude.

For More Information:

Structure and Finances of U.S. Farms: Family Farm Report, 2007 USDA ERS

The Environmental Safety and Benefits of Growth Enhancing Pharmaceutical Technologies in Beef Production
By Alex Avery and Dennis Avery, Hudson Institute, Centre for Global Food Issues.

Capper, J. L., Cady, R. A., Bauman, D. E. The environmental impact of dairy production: 1944 compared with 2007. Journal of Animal Science, 2009; 87 (6): 2160 DOI: 10.2527/jas.2009-1781

GM crops: global socio-economic
and environmental impacts 1996-
2007 Graham Brookes & Peter Barfoot
PG Economics Ltd, UK
Dorchester, UK (link)

Nutrition July-August 2007, Volume 23, Issues 7-8, Pages 557-563
"Is sugar-sweetened beverage consumption associated with increased fatness in children?" Authors: L. Johnson, A.P. Mander, L.R. Jones, P.M. Emmett and S.A. Jebb

Am J Clin Nutr (October 28, 2009)
"Adolescent beverage habits and changes in weight over time: findings from Project EAT1,2,3" Michelle S Vanselow, Mark A Pereira, Dianne Neumark-Sztainer and Susan K Raatz

Thursday, November 19, 2009

The First Thanksgiving: A Lesson in Free Market Agriculture

The first Thanksgiving story provides an interesting lesson in agricultural economics. Foremost, the celebration was about thanking God for the abundance. However, an important aspect is what resulted from a move away from a socialist or common property model of organizing and allocating resources (imposed on them by the Colony’s Sponsors) to a system of private property rights.

As governor William Bradford commented on the dreadful conditions of 1622:

“The experience that was had … that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. For the young men, that were most able and fit for labor and service, did repine that they should spend their time and strength to work for other men's wives and children without any recompense. The strong… had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice."

In 1623, they embraced the incentives of private property and capitalism:

“They had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression…By this time harvest was come, and instead of famine, now God gave them plenty, and the faces of things were changed, to the rejoicing of the hearts of many, for which they blessed God.”

The first Thanksgiving was a great example of agricultural productivity, given the proper incentives.

The source for these excerpts can be found at the Foundation for Economic Education here.

Monday, November 16, 2009

Why Agricultural (Applied) Economics?

Why study Agricultural Economics?

"The combination of quantitative training and applied work makes agricultural economics graduates an extremely well-prepared source of employees for private industry. That's why American Express has hired over 80 agricultural economists since 1990." - David Edwards, Vice President-International Risk Management, American Express

Agricultural Economics is a very applied field covering many topics beyond those stereotypically thought of as pertaining to agriculture. These may include finance and risk management, environmental and natural resource economics, game theory, or public policy analysis to name a few. More and more 'Agricultural Economics' is becoming synonymous with 'Applied Economics.' Many departments have changed their name from Agricultural Economics to Agricultural and Applied Economics and some have even changed their degree program names to just 'Applied Economics.'

This trend is noted in recent research in the journal Applied Economic Perspectives and Policy:

"Increased work in areas such as agribusiness, rural development, and environmental economics is making it more difficult to maintain one umbrella organization or to use the title “agricultural economist” ... the number of departments named “Agricultural Economics” has fallen from 36 in 1956 to 9 in 2007."

Agricultural/Applied economics provides students with skills in high demand, particularly in the area of analytics.

"Some companies have built their very business on their ability to collect, analyze, and act on data." ( See 'Competing on Analytics.' Harvard Bus.Review Jan 2006)

Recently from the New York Times: (For Today’s Graduate, Just One Word: Statistics )

"Though at the fore, statisticians are only a small part of an army of experts using modern statistical techniques for data analysis. Computing and numerical skills, experts say, matter far more than degrees. So the new data sleuths come from backgrounds like economics, computer science and mathematics."

To quote, from Johns Hopkins University’s applied economics program home page:

“Economic analysis is no longer relegated to academicians and a small number of PhD-trained specialists. Instead, economics has become an increasingly ubiquitous as well as rapidly changing line of inquiry that requires people who are skilled in analyzing and interpreting economic data, and then using it to effect decisions ………Advances in computing and the greater availability of timely data through the Internet have created an arena which demands skilled statistical analysis, guided by economic reasoning and modeling.”

Finally, a quote I found on the (formerly) American Agricultural Economics Association's web page a few years ago:

“Nearly one in five jobs in the United States is in food and fiber production and distribution. Fewer than three percent of the people involved in the agricultural industries actually work on the farm. Graduates in agricultural and applied economics or agribusiness work in a variety of institutions applying their knowledge of economics and business skills related to food production, rural development and natural resources.”

References:

'What is the Future of Agricultural Economics Departments and the Agricultural and Applied Economics Association?' By Gregory M. Perry. Applied Economic Perspectives and Policy (2010) volume 32, number 1, pp. 117–134.

Sunday, November 15, 2009

Greed, Envy, and Compensation

To me, we have seen a lot of hypocrisy lately in the public discourse regarding the issue of compensation. The underlying premise for much of the call for capping executive compensation has been that executives are overcompensated. That compensation structures have provided too much incentive for excessive risk taking. When you combine these pay structures with greedy executives, you get all of the problems that characterize the recent financial crisis. Since they had a lot to do with our current problems, they should not be rewarded with generous compensation or bonuses.

I deem this line of thought as hypocritical in the following way. I think much of the popular support for new regulations regarding executive salaries has to do more with envy, than economics (which I will discuss more below). Often political leaders will attempt to exploit envy from below, in order to create a larger movement for social control from above. Envy is just the desire to have more, and often more of what someone else has. Lately, envy has meant begrudging others of what they have and has led to having government take it away. How is that so different from greed?

Are executives really overcompensated? Research from the Journal of Political Economy by Jenson and Murhpy indicated that for every $1000 of value created for a company, executives were only compensated by $3.25. It hardly appears that they are overcompensated. There has also been the criticism that capitalism, and greedy executives, has lead to too much concentration on short term gains without concern for long term outcomes. This too is without merit. Research from the Journal of Applied Corporate Finance indicates that near term cash flows account for only a small percentage of a firm's capitalized market value. Only 18% of share value can be attributed to short term expectations of profits within a 5 year window. Expectations looking 10 years out account for up to 35% of share value. In other words, capitalism, or markets place greater value on long therm gains than short term wins.

A major challenge in corporate finance and compensation structures has been to actually encourage, not discourage executives to take calculated risks. A basic principle of finance is that with greater risks come greater returns. A leader that consistently abstains from taking risks will not create value for any organization. Large bonuses and golden parachutes aren't just the product of greed, but are designed to give executives the incentive to take prudent risks and create long term value for their firm and its shareholders.

Is too much risk taking really a problem? Some people claim that deregulation in addition to greed lead to excessive risk taking and our current problem. The only problem with that point is that we have not had a single act of deregulation by congress in well over a decade, and that was during the Clinton administration. But this deregulation ( the Gramm-Leach-Bliley Act) in fact helped create stability in the recent financial crisis, instead of being a source of the chaos. As quoted from the Wall Street Journal ( Oct 18,2008)

'Indeed, it allowed Bear Stearns and Merrill Lynch to be acquired by J.P. Morgan Chase and Bank of America, and allowed Goldman Sachs and Morgan Stanley to convert to bank holding companies to help shore up their positions during the mid-September bear runs on their stocks.'

But I do agree, that excessive risk taking did have a huge role to play in the current crisis. Market interest rates check excessive debt accumulation and risk taking. However,the artificially low, socially planned interest rates of the fed upset these natural checks and balances. Risky projects that did not offer a return high enough to offset risks under market interest rates, became profitable at new artificially lower interest rates. Businesses took on more risks and more debt than market fundamentals otherwise would have supported, and suddenly we have the makings of a rational bubble and the inevitable crash that followed. Implicate greed and risk taking if you will, but don't take it so far as to blame salaries and deregulation in the process.

What are the effects of our current stance on salaries? Now, of all times is when we need the best talent to lead us back to positive returns. If we really want the bailed out companies to ever be in a position to repay taxpayer dollars or regain their independence from government control, we need the top leaders to put them in that position. We won't get off cheap doing it. Already Bank of America is having trouble finding executives willing to be their CEO at the government imposed $500,000 pay cap. ( Wall Street Journal Nov 14, 2009).

Having not addressed the root causes of the financial crisis,and implementing more regulations that decrease risk taking, decrease compensation, and decrease investment incentives will only prolong the crisis and lead to stagnant long term growth.

If greed has ever been a problem, then it will be the envious regulatory response that keeps us from solving it.

References:

'Most Pundits Are Wrong About the Bubble-The repeal of Glass-Steagall has helped us weather the storm.' Wall Street Journal, Oct 18,2008. Charles Calamiris.

'BofA Hits Pay Snag in its CEO Hunt.' Dan Fitzpatrick. Wall Street Journal, Nov 14,2009.

Michale C. Jenson and Kevin J. Murphy."Performance Pay and Top Management Incentives," Journal of Political Economy, 98 No. 2 (April 1990) p. 225-264.

J.R. Woolridge, "Competitive Decline: Is a Myopic Stock Market to Blame?" Journal of Applied Corporate Finance, Spring 1988. p. 26-36

Monday, November 09, 2009

Earth Liberation Front: Resistance Part II

Previously I was discussing Eigene Weekly's Next Big Thing blog interview of Craig Rosebraugh regarding Earth Liberation Front's magazine 'Resistance.' I pointed out a couple of myths being perpetuated about the role of profits and biotechnology as they relate to environmental sustainability. In the same interview, Mr. Rosebraugh makes the following comment:

"This is a corrupt government, one that has been corrupt since its inception in 1776. The most unreasonable, potent, and damaging lie ever told to the people of the United States is that this is a democracy. The United States has never been a democracy nor will it ever be one without a significant change in the way the government is structured and the way it operates. This plutocracy or oligarchy is going to do what is in the best interest of the wealthy, of the corporations, and even to this day of the white male. Anything that stands to challenge the power the government and corporations hold over the people will be met with extreme force and violence."

Some of this really needs to be broken down line by line.

Let's start here:

"The most unreasonable, potent, and damaging lie ever told to the people of the United States is that this is a democracy. "

He is correct, but for all the wrong reasons. It seems that many people do have the misconception that we live in a democracy- but that is not what was intended. If it is a lie being told, that is being done in our schools or by activists and politicians. It certainly does not reflect the famous exchange made by Ben Franklin regarding the constitution:

Someone: “Well, Doctor, what have we got—a Republic or a Monarchy?” -

Ben Franklin: “A Republic, if you can keep it.”

A republic, not a monarchy, not a democracy. Rosebraugh is correct though, this myth about us being a democracy has been damaging, but not for the reasons he thinks. Some politicians have been so ambitious as to think that democratic popularity should override the protections our founders gave us in the Constitution- in other words congress should be able to do what ever it wants as long as it has the votes and the people keep sending them to Washington. And, if the constitution gets in the way, then it is OK for some unelected judge to make up a new interpretation granting congress the power it needs. I have a feeling that this is exactly the 'significant change in the way the government is structured and the way it operates' that Mr. Rosebraugh has in mind. We apparently just haven't went far enough in his mind and formally rescinded the Bill of Rights.

He also says that "This is a corrupt government, one that has been corrupt since its inception in 1776."

Well, of course government has always been corrupt in every form. But that is exactly why our founders gave us a Constitutional Republic. As Thomas Jefferson said:

“in questions of power then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the constitution”

By unbinding an otherwise democratic government from its constitutional restraints, as Mr. Rosebraugh may prefer, we open the door to some of the worst kinds of corruption we have seen in our history.

In a constitutional republic,(at least with our Constitution as it was written) corporations have no power other than the power we give them when we buy their products. Our Constitution as it is written expressly forbids government granting them any other power or special privileges over the common man. And, it protects us from any power held by the government. Only when we compromise (as we continue to do)for example with wild interpretations of 'the commerce clause' or the term 'general welfare' do we give up these protections.

But, these very compromises are what give the federal government the power it needs to enforce the environmental regulations these anti-ag activists treasure so much. The reforms that Mr. Rosebraugh and ELF are pushing certainly may be responsible for any truth that there may be regarding his statement:

"Anything that stands to challenge the power the government and corporations hold over the people will be met with extreme force and violence."


Only in a democracy void of constitutional restraint could we have such corruption and abuse of power. Our founders may have had their flaws, but they definitely knew what they were doing.

Earth Liberation Front: Resistance ( or Obstinance)

The following is an excerpt from a recent interview (here on Eigene Weekly's Next Big Thing blog) of Craig Rosebraugh regarding Earth Liberation Front's magazine 'Resistance.'

"This movement realizes that when governments and politicians refuse to act to protect the planet, it is up to all of us to step in and protect our home. And the only logic way that this protection may occur is to understand the primary force driving environmental destruction. That force is economic; it is the financial incentive that corporations and governments have when they clear-cut old growth forests, when they pump out gas-guzzling vehicles, when they destroy mountain tops and communities for coal, when they lay gas and oil pipelines across landscapes and ecosystems, when they genetically alter the natural world, when they pump toxins into the air, into the water and soil. It is the profit motive that is driving environmental destruction. So it only makes logical sense to work to directly remove that profit motive from these entities so they either are persuaded to stop their harmful practices or go out of business."

This seems to really resonate some of the fallacious thinking that we have seen in print lately via the Michael Pollan's and the Brian Walsh's of the world. He is linking profits and biotechnology with environmental destruction. It is annoying that these same 'stories' continue to be told. They are like myths that it seems we must continue to debunk over and over again. Now that we have people in power willing to subordinate evidence to wider emotional appeal, ( like regs on antibiotic use in livestock, cap-and-trade, the recent bailout, the stimulus package) we have to be even more resilient.

Removing the profit motive is the very last thing that one would want to do if long term sustainability is the goal. It was largely the profit motive that led to the production of biotech crops, and adoption by farmers. Sure we are all motivated by things besides profit, but the market system helps to coordinate our decisions, so that our choices are compatible and resources are used efficiently in a world of scarcity. And guess what, as so much evidence has indicated, farming is more sustainable than ever! While the agriculture industry may be one of the best examples of how markets and profits can lead to sustainable outcomes, the basic principle holds true across all industries. I guess Mr. Rosebraugh has never heard of The Invisible Green Hand.'

Of course, considering ELF as the source, we would not expect their publications to be considerate of all of the evidence, it's not like they are TIME magazine or anything.

Richmond Times Dispatch- Back and Forth

My previous post- 'House Passes Anti-Ag Health Care Bill' I expanded on some comments that I had left there in response to an editorial entitled Snack Attack ( which I was in favor of).

Someone responded to my comments as follows:

"But the interpretation of law is the foundation of the constitutional system; it’s intentionally ambiguous. To have anything more authoritative in a democracy would cross the boundary of representation towards dominance. It’s not so much that collective governance plays a part, but that the part it plays is available for interpretation."

...

"(As a side note, there’s no empirical link between the size of a policy bill and it’s efficacy—the US Military operates with far more than 111 internal bureaucracies, to say that it should or shouldn’t require as much without citing the substance of the organizational structure means nothing.)" -R

My Response:

In fact, the constitution was never intentionally ambiguous. A few quotes from our founders and the federalist papers make it clear that the words were intentional and have specific meaning.

“With respect to the two words “general welfare,“ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.“ - letter to James Robertson from James Madison

Also by Madison in Federalist # 41:

“Nothing is more natural nor common than first to use a general phrase ( like common welfare) and then to explain it and qualify it by a recital of particulars.“

In Federalist # 45:

“The powers delegated by the proposed constitution to the federal government are few and defined. Those which are to remain in the state governments are numerous and indefinite.“

Thomas Jefferson also was an advocate of this position as he states in a letter to Albert Gallatin in 1817:

“Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.“

The idea that the constitution can have multiple or ambiguous interpretations represents a transfer of power away from the people to the jurist. It is what economist Thomas Sowell has brilliantly described as the quiet repeal of the American Revolution.
The cognitive meaning of the constitutional text should always have dominance over the arbitrary whims or diseases endemic to democratic processes.

As stated:

from Federalist # 10. Madison states:

“In the extent and proper structure of the Union, therefore, we behold a republican remedy for the diseases most incident to republican government.”

What are these diseases? Again from #10:

“A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project”

Basically everything that has recently brought us to the point where we are today- why - because our elected leaders justify their actions by appealing to court precedents based on wild interpretations. With the courts, stripping away these protections, these diseases flourish.

You make a good point about the size of a bill and it’s efficacy. However, the relevant illustration made by me and the author is how its size seems speaks to just how disingenuous the bill is. IF providing means to purchase healthcare were really a concern, it would not require 1900 pages with provisions for vending machine regulations.

Unlike the constitution however, I belive this bill, is intentionally ambiguous. That way one can deny the existence of death panels ( or whatever topic) , but also provide the legal basis for their inception after it has been passed. It also allows for granting special privileges.

“The entire federal budget,” “can be viewed as a gigantic rent up for grabs for those who can exert the most political muscle.” ( ‘The Public Choice Revolution.‘ Regulation Magazine)

I can't wait to see if there is any followup. I expect a very sophisticated argument dismissing the importance of the Constitution, liberty, and free markets. If they can work something in about how 'industrial agriculture' is destroying the planet I would not be surprised either.

Sunday, November 08, 2009

House Passes Anti- Ag Healthcare Bill

A recent editorial in the Richmond Times Dispatch brings up the provision in the now passed house health care bill that regulates snack machines.

The snack machine provision certainly does characterize not only this bill, but the general condescending attitude that our leaders have towards science and evidence.

( there is no empirical link between snack foods and obesity i.e. health, while there are claims of a scientific consensus about global warming there are NO SCIENTIFIC forecasts supporting it, we just passed a stimulus package that flies in the face of 60 years of macroeconomic research)

It is one thing to attempt to help the less fortunate, but it should not require 111 new boards, commissions, and bureaucracies to provide people the means to pay for health care.

It is naive to think that these boards will not have a field day with the 1900+ pages of ambiguous language, and construe it to mean anything that serves their ends. It doesn't matter if the language 'death panels' is absent, it doesn't matter what president Obama, speaker Pelosi,or Sean Hannity says the bill means, what matters is the wild interpretation made of the 1900 pages of ambiguous language some judge makes 10 years from now.

Just look at the wild interpretations made of the commerce clause and 'general welfare' in our 'Iron Clad' constitution! Why we would want to grant congress 1900 more pages of leeway to run our lives is beyond me. It is obviously not about healthcare, it is about control.

Saturday, November 07, 2009

Resistance : The Politics of Green

The politics of green: (link)

"This movement realizes that when governments and politicians refuse to act to protect the planet, it is up to all of us to step in and protect our home. And the only logic way that this protection may occur is to understand the primary force driving environmental destruction. That force is economic; it is the financial incentive that corporations and governments have when they clear-cut old growth forests, when they pump out gas-guzzling vehicles, when they destroy mountain tops and communities for coal, when they lay gas and oil pipelines across landscapes and ecosystems, when they genetically alter the natural world, when they pump toxins into the air, into the water and soil. It is the profit motive that is driving environmental destruction. So it only makes logical sense to work to directly remove that profit motive from these entities so they either are persuaded to stop their harmful practices or go out of business."


"This is a corrupt government, one that has been corrupt since its inception in 1776. The most unreasonable, potent, and damaging lie ever told to the people of the United States is that this is a democracy. The United States has never been a democracy nor will it ever be one without a significant change in the way the government is structured and the way it operates. This plutocracy or oligarchy is going to do what is in the best interest of the wealthy, of the corporations, and even to this day of the white male. Anything that stands to challenge the power the government and corporations hold over the people will be met with extreme force and violence."

More to come....but these ideas are scary, and represent a gross misunderstanding of freedom, capitalism, democracy, and our constitutional republic. A common thread among the ani-agricultural activists.

Sunday, November 01, 2009

Buy 100% Biotech Cotton to Reduce Pesticides!

The Center For Consumer Freedom picked up on my AgWeb post.

See Here

Think organic cotton saves on pesticide use? Take a look at biotech cotton http://is.gd/4IaXA #gmo #biotech9:32 AM Oct 30th from web

When we take Cass Sunstein's Nudging a little too far

Despite the fact that research from George Mason University's Mercatus Center indicates that soda taxes would have to be in excess of 1200% to be effective, and despite little to no evidence linking soft drinks consumption to obesity, and despite the fact that sugar contains 50% fructose compared to 42% and 55% for different versions of high fructose corn syrup- some politicians and activists are still trying to create the impression that our corn farmers are killing us and the environment!

This great commercial from the Center for Consumer Freedom depicts it well!