Is Sarah Palin inarticulate? On what basis of comparison? Would this be an issue if she were to actually run for president?
Maybe not. Despite both President Obama's confusion about basic economics, gaffs, and inarticulate mishaps, he was quite successful in his campaign.
For example see here, here, and here. This is not to bash or disrespect the POTUS, but to illustrate how unfair or biased this criticism of Sarah Palin has been.
As far as Palin- what happened to all of the interviews like this( On Larry Kudlow)- where are the gaffs? This is inarticulate? ( this is prior to Governor Palin joining the ticket- so no tricks)
If all you saw of the campaign were the above videos of President Obama and the above video of Governor Palin, who would you judge as being 'inarticulate'? This is exactly the flavor of the campaign coverage provided by the national media, and illustrates exactly why so many Americans have such a poor perception of who is or isn't 'articulate.'
To continue with this criticism of Sarah Palin, while dodging the issues like taxes, spending,the stimulus, regulation, inflation, and natural resources is intellectually dishonest on the part of all of her critics, political opponents, and anyone in the media that continues to play this game.
Wednesday, July 08, 2009
The Road to Serfdom And The Car That Will Take Us There
See The Environmental Motor Company Making Detroit a subsidiary of the Sierra Club ( Wall Street Journal)
Saturday, July 04, 2009
Freedom Rallies: What are they about?
Freedom rallies, also known as tea parties by some, have been proliferate these past few months. What are they all about?
One of the first criticisms that comes to mind is 'where were all of these protesters under Bush'? No one was happy about the expansion of medicare and entitlement spending under Bush, and who can deny that the 1st round of lump sum tax cuts were poorly structured- although the the later cut in marginal taxes did work well- nor were very many of the tea party protesters likely very happy about the tariffs that came and went under Bush. Bush was not successful in reforming social security, and he should have vetoed the job and opportunity crushing minimum wage increases- if only to take a symbolic stance against poorly designed policies. For many of the protesters, I assume that president Bush left a lot to be desired. We too often forget the outrage over Bush starting the bailouts.
Unfortunately, I think many of them came to accept this brand of 'compassionate conservatism' or 'bipartisanship' to be a reality under the two party system. Electing John McCain would have meant more of these bipartisan ('maverick' as he called it) policies - like McCain- Feingold, cap and trade, and taxing our healthcare benefits. Sarah Palin was popular only because she was truly a Washington outsider, and seemed to bring balance to the ticket as someone willing to stand up to business as usual in DC. Unfortunately (or maybe fortunately) for her, McCain lost.
I think these parties represent a referendum on all parties, they are sending the message to everyone that many Americans are tired of bailouts, and hearing that the financial crisis is the result of deregulation under Bush ( even though they have not cited a single act of deregulation by congress since Gramm-Leach-Bliley in the 90's) or that it is a crisis of capitalism (basically our own fault).The participants are outraged to be punished for it with higher taxes, bigger government, inflation, and unprecedented deficits.
I think many of the participants are tired of having their intelligence insulted in this manner. They are looking for leadership- from whatever party- that is willing to look at the facts, and provide a solution as the result of carefully weighing and considering all of the evidence. They are sick of the big government ideology and bipartisanship that has brought us to where we are today.
I think the last straw may have been with the passage of the $787 billion stimulus package. We were told that it was necessary, as we faced the greatest financial crisis since the great depression. It may have been more accepted if those favoring this massive increase in spending could have offered some reasoning as to why this would work today, even though similar policies failed us during the great depression under Roosevelt and Hoover. This was passed despite numerous warnings from some of the worlds best and most prominent economists, including Cole & Ohanion, Prescott, Barro, Becker, Rizzo, Mankiw, Sargent, and almost 200 more. When the Michael Jordans and Tiger Woods of the field are stating that the stimulus package flies in the face of over 60 years of macroeconomic research, the supporters of the policy, or the media,or someone needs to be discussing this as a debatable idea. It is the burden of the supporters and the media to explain why this will work, and while all of the other evidence is flawed. I don't recall any of the supporters of the legislation having a discussion like this- I don't remember seeing or hearing mention of any of these economists' research being discussed or debated on the news in relation to the stimulus. In short, I think the protesters probably feel like they have been lied to to a great extent about the stimulus and current budget deficits, or greatly insulted by the arrogance of its supporters. Not only are they likely upset with the republicans and democrats that have supported these policies, but they are also growing more and more impatient with a national media that has failed to ask tough questions.
To add insult to injury, evidence indicates that the projections of how much better off we would be under passage of the stimulus have turned out to be wrong. Unemployment has surpassed what it was projected to have been without passing a $787 billion stimulus package.
Source here.
The excuse seems to be 'we didn't know how bad it really was.' This excuse might be acceptable, were it not for the big I told you so coming from the hundreds of economists listed above. And the original projections did account for the lag we would expect from fiscal policy, so the excuse of 'giving it more time' isn't really much more acceptable.
Given what we have experienced through the bailouts and the stimulus package, many of the participants in the freedom rallies are even more skeptical of the policies to come such as national healthcare and cap and trade.
Those participating in the freedom rallies across the country this past independence day weekend have a lot grievances on their plate, and a lot of questions they want answered. Will they get answers, or will they be arrogantly dismissed as fringe radicals, closed minded, anti-progressive sore losers? Will they be answered by an offer to have a serious discussion? Will they be offered evidence, or cowboy style ideological shots from the hip?
One of the first criticisms that comes to mind is 'where were all of these protesters under Bush'? No one was happy about the expansion of medicare and entitlement spending under Bush, and who can deny that the 1st round of lump sum tax cuts were poorly structured- although the the later cut in marginal taxes did work well- nor were very many of the tea party protesters likely very happy about the tariffs that came and went under Bush. Bush was not successful in reforming social security, and he should have vetoed the job and opportunity crushing minimum wage increases- if only to take a symbolic stance against poorly designed policies. For many of the protesters, I assume that president Bush left a lot to be desired. We too often forget the outrage over Bush starting the bailouts.
Unfortunately, I think many of them came to accept this brand of 'compassionate conservatism' or 'bipartisanship' to be a reality under the two party system. Electing John McCain would have meant more of these bipartisan ('maverick' as he called it) policies - like McCain- Feingold, cap and trade, and taxing our healthcare benefits. Sarah Palin was popular only because she was truly a Washington outsider, and seemed to bring balance to the ticket as someone willing to stand up to business as usual in DC. Unfortunately (or maybe fortunately) for her, McCain lost.
I think these parties represent a referendum on all parties, they are sending the message to everyone that many Americans are tired of bailouts, and hearing that the financial crisis is the result of deregulation under Bush ( even though they have not cited a single act of deregulation by congress since Gramm-Leach-Bliley in the 90's) or that it is a crisis of capitalism (basically our own fault).The participants are outraged to be punished for it with higher taxes, bigger government, inflation, and unprecedented deficits.
I think many of the participants are tired of having their intelligence insulted in this manner. They are looking for leadership- from whatever party- that is willing to look at the facts, and provide a solution as the result of carefully weighing and considering all of the evidence. They are sick of the big government ideology and bipartisanship that has brought us to where we are today.
I think the last straw may have been with the passage of the $787 billion stimulus package. We were told that it was necessary, as we faced the greatest financial crisis since the great depression. It may have been more accepted if those favoring this massive increase in spending could have offered some reasoning as to why this would work today, even though similar policies failed us during the great depression under Roosevelt and Hoover. This was passed despite numerous warnings from some of the worlds best and most prominent economists, including Cole & Ohanion, Prescott, Barro, Becker, Rizzo, Mankiw, Sargent, and almost 200 more. When the Michael Jordans and Tiger Woods of the field are stating that the stimulus package flies in the face of over 60 years of macroeconomic research, the supporters of the policy, or the media,or someone needs to be discussing this as a debatable idea. It is the burden of the supporters and the media to explain why this will work, and while all of the other evidence is flawed. I don't recall any of the supporters of the legislation having a discussion like this- I don't remember seeing or hearing mention of any of these economists' research being discussed or debated on the news in relation to the stimulus. In short, I think the protesters probably feel like they have been lied to to a great extent about the stimulus and current budget deficits, or greatly insulted by the arrogance of its supporters. Not only are they likely upset with the republicans and democrats that have supported these policies, but they are also growing more and more impatient with a national media that has failed to ask tough questions.
To add insult to injury, evidence indicates that the projections of how much better off we would be under passage of the stimulus have turned out to be wrong. Unemployment has surpassed what it was projected to have been without passing a $787 billion stimulus package.
Source here.
The excuse seems to be 'we didn't know how bad it really was.' This excuse might be acceptable, were it not for the big I told you so coming from the hundreds of economists listed above. And the original projections did account for the lag we would expect from fiscal policy, so the excuse of 'giving it more time' isn't really much more acceptable.
Given what we have experienced through the bailouts and the stimulus package, many of the participants in the freedom rallies are even more skeptical of the policies to come such as national healthcare and cap and trade.
Those participating in the freedom rallies across the country this past independence day weekend have a lot grievances on their plate, and a lot of questions they want answered. Will they get answers, or will they be arrogantly dismissed as fringe radicals, closed minded, anti-progressive sore losers? Will they be answered by an offer to have a serious discussion? Will they be offered evidence, or cowboy style ideological shots from the hip?
Thursday, July 02, 2009
Agriculture, Obesity, and Poverty
The agriculture industry has and will continue to come under attach for contributing to obesity. These attacks are based on narrow special interests and ideology, but they will be used to justify more regulation and an attack on the personal liberties of millions of Americans. It will be done in the name of protecting the poor from themselves and the greed of agribusiness.
Back in 2007 in the New York Times Micahel Pollan makes the following comment:
"So how is it that today the people with the least amount of money to spend on food are the ones most likely to be overweight?
This perverse state of affairs is not, as you might think, the inevitable result of the free market.
Like most processed foods, the Twinkie is basically a clever arrangement of carbohydrates and fats teased out of corn, soybeans and wheat — three of the five commodity crops that the farm bill supports, to the tune of some $25 billion a year. (Rice and cotton are the others.) For the last several decades — indeed, for about as long as the American waistline has been ballooning — U.S. agricultural policy has been designed in such a way as to promote the overproduction of these five commodities, especially corn and soy."
Mr. Pollan has it all wrong on a number of accounts. I'm not here to argue about the distortions created by this or that component of any particular farm bill, but the farm bills are structured around these crops because that is what we grow, they are the staples that feed the world. We don't grow these crops because they are included in the farm bill, they are included in the farm bill because we grow these crops. Eliminate the farm bill, and yes the free market will still call for American farmers to grow the staples that feed the world.
Mr. Pollan and many of his adherents are not interested in what foods free markets ( or lets be more precise- the foods that free people) dictate. Most of these food activists would love to see a farm bill or other legislation that penalizes our efforts to feed the world with the environmentally superior technologies and science based techniques we are using today, and subsidize the production of fruits and vegetables and politically correct foods.
Also is the concern that the 'poor' are choosing to eat these unhealthy fast foods and processed foods. That may certainly be the case, but we should really be concerned with overall health, not just obesity. While the poor may be dealing with some issues of obesity, research ( from the national bureau of economic research) indicates that the relationship between socioeconomic status and health is weak. Still, if we are going to be concerned with obesity, we should be concerned with all factors contribute to obesity, not just the hand that feeds us. As indicated in a recent piece in the Rocky Mountain News, a study from the 2007 International Journal of Obesity concludes, “The obesity epidemic is often speculatively blamed on fast food, when the actual evidence shows very little, if any, association of fast food with weight gain.”
To concentrate on diet alone, and omit exercise will lead to perverse results, but it can justify a lot of government intrusion on our valued freedoms.
One approach is to inadvertandly tax small businesses and consumers with labeling requirements as done recently in Tennessee. ( See the Tennessean)
"Providing consumers with accurate, easy to understand nutritional information about the content of the food they are purchasing is a common-sense measure that could help Tennessee address its obesity epidemic" Bredesen wrote.
Governor Bredessen, common sense tells us that the gravy and fried chicken at the local diner or national franchise probably is loaded with calories and fat, labeled or not. Will this change the habits of a marginal number of people? Maybe, but at great costs with minimal benefit.
The case is similar with fat taxes. Research from the Mercatus Center at George Mason University indicates that the taxes required to have any real affect on obesity would be in the 1200 percent range, and even if taxes eliminated ( in this case soda) consumption, the impact on obesity would be very small. The study concludes that "the sensitivity of individuals to changes in relative food prices is
not sufficient to make “fat taxes” a viable tool to lower obesity."
Taking on the challenge of 'fighting obesity' in the name of helping the poor ( or reducing climate change) is likely misguided, or for some activists maybe even disingenuous. In the words of economist Thomas Sowell, many of the arguments for these policies 'invoke the name and mystique of science in order to override other people's choices."
We should be thankful that we live in a country were people of modest means have access affordable energy dense foods. We can't forget that fast food provides jobs and opportunities for advancement for millions! In producing staples like corn, soybeans, wheat, beef, pork, and chicken our farmers are utilizing modern science and technology ( like biotech) to improve nutritional quality and minimize our impact on the environment.
Many of the ideas being proposed by food activists and righteous eaters if ever implemented will truly bite the hand that feeds us.
The best approach is to maintain policies that support rather than hinder the spontaneous order of the market that allocates resources and provides incentives to produce the necessary technologies for better food, a better environment, and the economic growth that reduces poverty.
Back in 2007 in the New York Times Micahel Pollan makes the following comment:
"So how is it that today the people with the least amount of money to spend on food are the ones most likely to be overweight?
This perverse state of affairs is not, as you might think, the inevitable result of the free market.
Like most processed foods, the Twinkie is basically a clever arrangement of carbohydrates and fats teased out of corn, soybeans and wheat — three of the five commodity crops that the farm bill supports, to the tune of some $25 billion a year. (Rice and cotton are the others.) For the last several decades — indeed, for about as long as the American waistline has been ballooning — U.S. agricultural policy has been designed in such a way as to promote the overproduction of these five commodities, especially corn and soy."
Mr. Pollan has it all wrong on a number of accounts. I'm not here to argue about the distortions created by this or that component of any particular farm bill, but the farm bills are structured around these crops because that is what we grow, they are the staples that feed the world. We don't grow these crops because they are included in the farm bill, they are included in the farm bill because we grow these crops. Eliminate the farm bill, and yes the free market will still call for American farmers to grow the staples that feed the world.
Mr. Pollan and many of his adherents are not interested in what foods free markets ( or lets be more precise- the foods that free people) dictate. Most of these food activists would love to see a farm bill or other legislation that penalizes our efforts to feed the world with the environmentally superior technologies and science based techniques we are using today, and subsidize the production of fruits and vegetables and politically correct foods.
Also is the concern that the 'poor' are choosing to eat these unhealthy fast foods and processed foods. That may certainly be the case, but we should really be concerned with overall health, not just obesity. While the poor may be dealing with some issues of obesity, research ( from the national bureau of economic research) indicates that the relationship between socioeconomic status and health is weak. Still, if we are going to be concerned with obesity, we should be concerned with all factors contribute to obesity, not just the hand that feeds us. As indicated in a recent piece in the Rocky Mountain News, a study from the 2007 International Journal of Obesity concludes, “The obesity epidemic is often speculatively blamed on fast food, when the actual evidence shows very little, if any, association of fast food with weight gain.”
To concentrate on diet alone, and omit exercise will lead to perverse results, but it can justify a lot of government intrusion on our valued freedoms.
One approach is to inadvertandly tax small businesses and consumers with labeling requirements as done recently in Tennessee. ( See the Tennessean)
"Providing consumers with accurate, easy to understand nutritional information about the content of the food they are purchasing is a common-sense measure that could help Tennessee address its obesity epidemic" Bredesen wrote.
Governor Bredessen, common sense tells us that the gravy and fried chicken at the local diner or national franchise probably is loaded with calories and fat, labeled or not. Will this change the habits of a marginal number of people? Maybe, but at great costs with minimal benefit.
The case is similar with fat taxes. Research from the Mercatus Center at George Mason University indicates that the taxes required to have any real affect on obesity would be in the 1200 percent range, and even if taxes eliminated ( in this case soda) consumption, the impact on obesity would be very small. The study concludes that "the sensitivity of individuals to changes in relative food prices is
not sufficient to make “fat taxes” a viable tool to lower obesity."
Taking on the challenge of 'fighting obesity' in the name of helping the poor ( or reducing climate change) is likely misguided, or for some activists maybe even disingenuous. In the words of economist Thomas Sowell, many of the arguments for these policies 'invoke the name and mystique of science in order to override other people's choices."
We should be thankful that we live in a country were people of modest means have access affordable energy dense foods. We can't forget that fast food provides jobs and opportunities for advancement for millions! In producing staples like corn, soybeans, wheat, beef, pork, and chicken our farmers are utilizing modern science and technology ( like biotech) to improve nutritional quality and minimize our impact on the environment.
Many of the ideas being proposed by food activists and righteous eaters if ever implemented will truly bite the hand that feeds us.
The best approach is to maintain policies that support rather than hinder the spontaneous order of the market that allocates resources and provides incentives to produce the necessary technologies for better food, a better environment, and the economic growth that reduces poverty.
Thursday, June 18, 2009
Green Jobs
Recently there has been a lot of hype created regarding the creation of 'green jobs' and even excitement that the creation of green jobs may help stimulate the economy. This may be counter to what we would expect given basic economic theory.
Recent research by Gabriel Calzada Álvarez (link) indicates that job losses may result from what economists refer to as the broken window fallacy.
'we find that for every renewable energy job that the State manages to finance...that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.'
'Each “green” megawatt installed destroys 5.28 jobs on average elsewhere in the economy: 8.99 by photovoltaics, 4.27 by wind energy, 5.05 by mini-hydro.'
With the broken window fallacy, as the analogy goes, breaking the baker's window leads to jobs for glass repair workers, and thus acts like a stimulus to the economy. It is a fallacy in that it does not consider the jobs that other wise would have been created had the baker not had to fix his window, but expanded his business or invested the funds. Jobs may be created on both accounts, but who is to say which jobs create the most value for the economy.
If green jobs are created by taking money and resources away from other businesses to subsidize green enterprises (breaking windows) then they are not created without consequence.
Green jobs created by government are not equivalent to those created by the free market. A recent story from the Charlotte Observer points out that according to a study by Pew Charitable Trusts "Green-jobs growth has occurred without consistent regulatory support... "All the states that grew were responding directly to consumer demand."
A prime example of green job creation via the free market can be found when we look at modern agriculture. As pointed out in a recent AgWeb blog post 'Biotechnology: An Agriculture Success Story' recent research from PG Economics indicates that biotech crops have greatly reduced agriculture's carbon footprint and reduced pesticide applications. For additional peer reviewed research related to the 'greening' of the ag industry see the references below.
Green jobs created by the biotech industry are created voluntarily. Investors and entrepreneurs recognized that the money they invested in biotech would yield more benefits to society than any alternative at the margin. Otherwise they would have invested their money elsewhere.
When government tries to create green jobs, it has to arbitrarily take money from one place and put it somewhere else. Because they base their decision on the limited knowledge and preferences of at most a few voters, politicians, and bureaucrats instead of market returns, they have no way of knowing whether the additional benefits to society from their program are greater than the costs. ( and they risk destroying more jobs than they create).
If we truly want increased growth, decreased poverty, and improved environmental quality, our best chance is going to be to leverage the power of the 'invisible green hand' and let the market create green jobs where they are needed most. The ag industry has already set the example.
Enterprise and Biodiversity: Do Market Forces Yield Diversity of Life?
David Schap and Andrew T. Young Cato Journal, Vol. 19, No. 1 (Spring/Summer 1999)
A Meta-Analysis of Effects of Bt Cotton and Maize on Nontarget Invertebrates
Michelle Marvier, Chanel McCreedy, James Regetz, Peter Kareiva
Science 8 June 2007:
Vol. 316. no. 5830, pp. 1475 - 1477
Smith, J.S.C.; Smith, O.S.; Wright, S.; Wall, S.J.; and Walton, M. (1992)
‘‘Diversity of United States Hybrid Maize Germplasm as Revealed by
Restriction Fragment Length Polymorphisms.’’ Crop Science 32: 598–604
Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.
Dowd, p.J. Economic Entomology. 93 1669-1679 2000.
Miller, Henry I, Conko, Gregory, & Drew L. Kershe. Nature Biotechnology Volume 24 Number 9 September 2006.
Agricultural Outlook ERS/USDA Aug 2006.
Dr. Roger Leonard, LSU Agricultural Center and Dr. Ronald Smith, Auburn University. Research in Bt Cotton
http://www.beefusa.org/uDocs/cattlenumbersandbeefproduction347.pdf
Gregory Conko “The Benefits of Biotech” Regulation. Spring 2003
San Diego Center for Molecular Agriculture: Foods from Genetically Modified Organisms
Recent research by Gabriel Calzada Álvarez (link) indicates that job losses may result from what economists refer to as the broken window fallacy.
'we find that for every renewable energy job that the State manages to finance...that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.'
'Each “green” megawatt installed destroys 5.28 jobs on average elsewhere in the economy: 8.99 by photovoltaics, 4.27 by wind energy, 5.05 by mini-hydro.'
With the broken window fallacy, as the analogy goes, breaking the baker's window leads to jobs for glass repair workers, and thus acts like a stimulus to the economy. It is a fallacy in that it does not consider the jobs that other wise would have been created had the baker not had to fix his window, but expanded his business or invested the funds. Jobs may be created on both accounts, but who is to say which jobs create the most value for the economy.
If green jobs are created by taking money and resources away from other businesses to subsidize green enterprises (breaking windows) then they are not created without consequence.
Green jobs created by government are not equivalent to those created by the free market. A recent story from the Charlotte Observer points out that according to a study by Pew Charitable Trusts "Green-jobs growth has occurred without consistent regulatory support... "All the states that grew were responding directly to consumer demand."
A prime example of green job creation via the free market can be found when we look at modern agriculture. As pointed out in a recent AgWeb blog post 'Biotechnology: An Agriculture Success Story' recent research from PG Economics indicates that biotech crops have greatly reduced agriculture's carbon footprint and reduced pesticide applications. For additional peer reviewed research related to the 'greening' of the ag industry see the references below.
Green jobs created by the biotech industry are created voluntarily. Investors and entrepreneurs recognized that the money they invested in biotech would yield more benefits to society than any alternative at the margin. Otherwise they would have invested their money elsewhere.
When government tries to create green jobs, it has to arbitrarily take money from one place and put it somewhere else. Because they base their decision on the limited knowledge and preferences of at most a few voters, politicians, and bureaucrats instead of market returns, they have no way of knowing whether the additional benefits to society from their program are greater than the costs. ( and they risk destroying more jobs than they create).
If we truly want increased growth, decreased poverty, and improved environmental quality, our best chance is going to be to leverage the power of the 'invisible green hand' and let the market create green jobs where they are needed most. The ag industry has already set the example.
Enterprise and Biodiversity: Do Market Forces Yield Diversity of Life?
David Schap and Andrew T. Young Cato Journal, Vol. 19, No. 1 (Spring/Summer 1999)
A Meta-Analysis of Effects of Bt Cotton and Maize on Nontarget Invertebrates
Michelle Marvier, Chanel McCreedy, James Regetz, Peter Kareiva
Science 8 June 2007:
Vol. 316. no. 5830, pp. 1475 - 1477
Smith, J.S.C.; Smith, O.S.; Wright, S.; Wall, S.J.; and Walton, M. (1992)
‘‘Diversity of United States Hybrid Maize Germplasm as Revealed by
Restriction Fragment Length Polymorphisms.’’ Crop Science 32: 598–604
Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.
Dowd, p.J. Economic Entomology. 93 1669-1679 2000.
Miller, Henry I, Conko, Gregory, & Drew L. Kershe. Nature Biotechnology Volume 24 Number 9 September 2006.
Agricultural Outlook ERS/USDA Aug 2006.
Dr. Roger Leonard, LSU Agricultural Center and Dr. Ronald Smith, Auburn University. Research in Bt Cotton
http://www.beefusa.org/uDocs/cattlenumbersandbeefproduction347.pdf
Gregory Conko “The Benefits of Biotech” Regulation. Spring 2003
San Diego Center for Molecular Agriculture: Foods from Genetically Modified Organisms
Wednesday, June 17, 2009
Food Inc
Steve Cornett of AgWeb sums it up pretty well. My response to his post and commentors:
Thanks for sharing this.These sentiments reflect a basic unbiased, common sense science based response to Food Inc. which from what I gather is turning out to be using the prestige of science as a facade to override other people's choices. As far as where I get my news, I would say, as someone else very well known has said, ALL OF THEM. Fox, NPR, ABC, CBS Bloomberg, CNN, CSPAN, NYT, WSJ, WP, etc. Isn't it kind of silly to list all of these sources this day in age. ALL OF THEM.
Thanks for sharing this.These sentiments reflect a basic unbiased, common sense science based response to Food Inc. which from what I gather is turning out to be using the prestige of science as a facade to override other people's choices. As far as where I get my news, I would say, as someone else very well known has said, ALL OF THEM. Fox, NPR, ABC, CBS Bloomberg, CNN, CSPAN, NYT, WSJ, WP, etc. Isn't it kind of silly to list all of these sources this day in age. ALL OF THEM.
Monday, June 15, 2009
Taking Up for Monsanto
Several Points:
1) Bringing up DDT isn't the best grounds to stand on from a humanitarian standpoint. More lives have been lost as a result of the DDT ban than saved.
2) Increased use of Roundup is a bad thing? Roundup Ready technology has allowed for glyphosate herbicide to substitute for 7.2 million pounds of other chemicals that are more toxic and persistent in the environment.
According to a recent study,biotech crops have decreased the environmental impact associated with herbicide and insecticide use on the area planted to biotech crops by 17.2%
3) The number of farmers that don't use biotech seeds is diminishing. That is true and it is a worldwide phenomena. The largest increases are actually among subsistence farmers in the developing world. They are able to produce safer, more vigorous and resource efficient crops all while saving costs. The idea that this technology is being forced upon them is specious at best.
As far as 'contamination' is concerned, the technology to prevent it exists. The idea of a 'terminator' gene that would prevent environmental contamination has been trumped by the groups opposed science based agriculture, and the technology has never been used as a result.
4) For peer reviewed research regarding biotech foods, see this link.
Another exhaustive look at this issue can be found here.
The research is actually proliferate.
Sunday, June 14, 2009
Got (Green) Milk?
Another example of the 'Invisible Green Hand' at work. This time in the dairy industry. See link here.
Excerpt:
"The study shows that the carbon footprint for a gallon of milk produced in 2007 was only 37 percent of that produced in 1944. Improved efficiency has enabled the U.S. dairy industry to produce 186 billion pounds of milk from 9.2 million cows in 2007, compared to only 117 billion pounds of milk from 25.6 million cows in 1944. This has resulted in a 41 percent decrease in the total carbon footprint for U.S. milk production."
Excerpt:
"The study shows that the carbon footprint for a gallon of milk produced in 2007 was only 37 percent of that produced in 1944. Improved efficiency has enabled the U.S. dairy industry to produce 186 billion pounds of milk from 9.2 million cows in 2007, compared to only 117 billion pounds of milk from 25.6 million cows in 1944. This has resulted in a 41 percent decrease in the total carbon footprint for U.S. milk production."
Friday, June 12, 2009
Behavioral Economics
A recent story on National Public Radio ( link) gives an overview of a subfield of economics called behavioral economics. Behavioral economics incorporates elements of psychology into economic theory. Some people believe that behavioral economics will improve economic models because it makes a correction for what they believe are errors in the assumptions of classical economics. As a result many people have come to think that behavioral economics may even justify the unprecedented amount of government intervention in the economy and improve our lives.
Continue reading at AgWeb.
Continue reading at AgWeb.
Sunday, May 17, 2009
Friday, April 03, 2009
Fascist Policies
From The American Spectator:
Trying to handle the crisis, the Fascist government nationalized the holdings of large banks which had accrued significant industrial securities. The government also issued new securities to provide a source of credit for the banks and began enlisting the help of various cartels…. The government offered recognition and support to these organizations in exchange for promises that they would manipulate prices in accordance with government priorities. A number of mixed entities were formed… whose purpose it was to bring together representatives of the government and of the major businesses.… This economic model based on a partnership between government and business was soon extended to the political sphere, in what came to be known as corporatism.… The Fascists began to impose significant tariffs and other trade barriers.… Various banking and industrial companies were financially supported by the state.… [The national leader] created the [New Governmental Entity]….[which soon] controlled 20% of [the nation's] industry through government-linked companies.… [The national leader] also adopted a Keynesian policy of government spending on public works to stimulate the economy.… Public works spending tripled to overtake defense spending as the largest item of government expenditure.
the above passage of course describes the economics of fascist Italy in the 1930s,...."The Fascist conception of life," Mussolini wrote, "stresses the importance of the State and accepts the individual only in so far as his interests coincide with the State. It is opposed to classical liberalism [which] denied the State in the name of the individual; Fascism reasserts the rights of the State as expressing the real essence of the individual."
Public-Private partnerships, or the incorporation of private institutions into the state via the regulatory apparatus ( the definition of economic fascism by the way) often benefits 'some' big businesses, and because big business is often associated with the right wing, people often confuse economic fascism with being right wing.
Trying to handle the crisis, the Fascist government nationalized the holdings of large banks which had accrued significant industrial securities. The government also issued new securities to provide a source of credit for the banks and began enlisting the help of various cartels…. The government offered recognition and support to these organizations in exchange for promises that they would manipulate prices in accordance with government priorities. A number of mixed entities were formed… whose purpose it was to bring together representatives of the government and of the major businesses.… This economic model based on a partnership between government and business was soon extended to the political sphere, in what came to be known as corporatism.… The Fascists began to impose significant tariffs and other trade barriers.… Various banking and industrial companies were financially supported by the state.… [The national leader] created the [New Governmental Entity]….[which soon] controlled 20% of [the nation's] industry through government-linked companies.… [The national leader] also adopted a Keynesian policy of government spending on public works to stimulate the economy.… Public works spending tripled to overtake defense spending as the largest item of government expenditure.
the above passage of course describes the economics of fascist Italy in the 1930s,...."The Fascist conception of life," Mussolini wrote, "stresses the importance of the State and accepts the individual only in so far as his interests coincide with the State. It is opposed to classical liberalism [which] denied the State in the name of the individual; Fascism reasserts the rights of the State as expressing the real essence of the individual."
Public-Private partnerships, or the incorporation of private institutions into the state via the regulatory apparatus ( the definition of economic fascism by the way) often benefits 'some' big businesses, and because big business is often associated with the right wing, people often confuse economic fascism with being right wing.
Friday, March 27, 2009
Harper's Keizer, Right vs. Left vs. Center : All Are Irrelevant
Harper's, Garret Keizer:
The mega-irony of the Republican Party: that of all people conservatives ought to have been the first to grasp the dangers of unregulated markets. If big government is susceptible to the abuses of "sinful" human beings, how much more susceptible is a corporate system that is bigger than any government? The right wing of the party ought to have seen this better than the center, and the religious right ought to have seen it best of all. That they failed to see it bespeaks a spiritual bankruptcy beside which the financial plight of an auto industry is as a gnat unto a camel.
A market is certainly much larger than the government but with that comes certain advantages over government as well.
Government, large or small as it may be, is run by greedy politicians and bureaucrats, and relies on their limited knowledge and preferences to make decisions and allocate resources. They are accountable primarily only to the constraints of elections, and the political environment ( their relationships with other politicians and bureaucrats etc.)
Markets are much larger and consist of millions of greedy individuals. Both markets and governments consist of greedy individuals armed with imperfect information. The difference is that with markets, decisions regarding the allocation of resources are based on the knowledge and preferences of millions of individuals, who are all accountable to one another via the checks and balances of the price system. Markets draw from a much larger pool of knowledge and are subject to much greater constraints than governments.
It would seem then that the institution with the larger pool of knowledge and a greater extent of checks and balances would be the one that is less dangerous.
Confusing the issue with republican vs. democrat vs. religious right vs. center etc. is not an effective framework for ' grasping the danger' of one institutional arrangement vs another.
What we have seen recently is chaos introduced by public private partnerships and a mixed economy, making it difficult to identify the 'dangers' of both government and corporate arrangements. By upsetting the checks and balances of the price system, ( primarily via the federal reserve’s longstanding policy of centrally planned interest rates) and the creation of public private partnerships like the government sponsored enterprises such as Fannie and Freddie, incentive structures favoring greater risk and unaccountability have arisen that would not occur in the context of a free market. The result being a housing bubble, bust, and over leveraged and bankrupt financial institutions.
The question now becomes what is the least dangerous response to this situation, and which institutional arrangement will be best equipped with the knowledge and incentives to bring about recovery? Are more distortionary interventions and public/private partnerships i.e. more government, the solution when they have played such a pivotal role in getting us where we are today? Markets have worked well in allocating resources and bringing about prosperity over the past few decades. Is the solution to our current problem to limit their role and ability to do this in the future?
The mega-irony of the Republican Party: that of all people conservatives ought to have been the first to grasp the dangers of unregulated markets. If big government is susceptible to the abuses of "sinful" human beings, how much more susceptible is a corporate system that is bigger than any government? The right wing of the party ought to have seen this better than the center, and the religious right ought to have seen it best of all. That they failed to see it bespeaks a spiritual bankruptcy beside which the financial plight of an auto industry is as a gnat unto a camel.
A market is certainly much larger than the government but with that comes certain advantages over government as well.
Government, large or small as it may be, is run by greedy politicians and bureaucrats, and relies on their limited knowledge and preferences to make decisions and allocate resources. They are accountable primarily only to the constraints of elections, and the political environment ( their relationships with other politicians and bureaucrats etc.)
Markets are much larger and consist of millions of greedy individuals. Both markets and governments consist of greedy individuals armed with imperfect information. The difference is that with markets, decisions regarding the allocation of resources are based on the knowledge and preferences of millions of individuals, who are all accountable to one another via the checks and balances of the price system. Markets draw from a much larger pool of knowledge and are subject to much greater constraints than governments.
It would seem then that the institution with the larger pool of knowledge and a greater extent of checks and balances would be the one that is less dangerous.
Confusing the issue with republican vs. democrat vs. religious right vs. center etc. is not an effective framework for ' grasping the danger' of one institutional arrangement vs another.
What we have seen recently is chaos introduced by public private partnerships and a mixed economy, making it difficult to identify the 'dangers' of both government and corporate arrangements. By upsetting the checks and balances of the price system, ( primarily via the federal reserve’s longstanding policy of centrally planned interest rates) and the creation of public private partnerships like the government sponsored enterprises such as Fannie and Freddie, incentive structures favoring greater risk and unaccountability have arisen that would not occur in the context of a free market. The result being a housing bubble, bust, and over leveraged and bankrupt financial institutions.
The question now becomes what is the least dangerous response to this situation, and which institutional arrangement will be best equipped with the knowledge and incentives to bring about recovery? Are more distortionary interventions and public/private partnerships i.e. more government, the solution when they have played such a pivotal role in getting us where we are today? Markets have worked well in allocating resources and bringing about prosperity over the past few decades. Is the solution to our current problem to limit their role and ability to do this in the future?
Saturday, March 21, 2009
Antibiotic Use in Agriculture
Some recent articles:
Comprehensive Reviews in Food Science and Food Safety
"applying interventions to control foodborne pathogens in general, rather than focusing on antibiotic-resistant
strains specifically, would have the greatest impact in reducing overall foodborne illnesses."
And from Pork Magazine here.
Comprehensive Reviews in Food Science and Food Safety
"applying interventions to control foodborne pathogens in general, rather than focusing on antibiotic-resistant
strains specifically, would have the greatest impact in reducing overall foodborne illnesses."
And from Pork Magazine here.
Saturday, March 14, 2009
Laying Out The Facts
From a recent issue of Nature Biotechnology:
"Obama is clearly a science buff, and is really, honestly, into knowing the facts, having them laid out, and then making the best choices that can be mustered," says a policy watcher who was close to the transition team but is outside the federal government. "It is a whole different approach compared to the 'How can we spin this information?' approach of the [Bush administration]. Back to 'honest-to-goodness' curiosity, which is, yes, incredibly refreshing."
This sounds like it could be good for biotech, but I’m not so refreshed. It seems that in the past the approach of those favoring larger government and regulation has been only to embrace the science that supports their interventions. This is more of a feigned or disingenuous intellectual curiosity, which really is no different than ‘How can we spin this information.’ Policy makers often pretend to embrace science, but really are ‘invoking the name and mystique of science to override other peoples choices’ to borrow a phrase from economist Thomas Sowell.
Examples that come to mind include aggressive attempts to combat climate change, despite the lack of consensus with regard to the effectiveness of such policies. They may have established a consensus that the earth is warming , but that is only the first step in a long process of determining an optimal policy procedure. If we are going to tax carbon or establish a market based cap and trade solution, then we need to be able to determine the relevance of our carbon foot print and put a price on it. Price ranges are all over the board, from the credulous Stern reports estimate of $300/ton to William Nordhaus more rigorous estimate of $30/ton ( which is still 10 times the implied price via Kyoto).
Currently there are private exchanges allowing producers to sell carbon offsets in a voluntary market. We should start from there. By the time we figure out the ‘optimal policy’ it is likely that the private market will have taken care of the problem for us as it has many times in the past. Markets and technological change have never allowed us to run out of copper, coal, cattle, oil ,or numerous other natural resources, there is no reason to believe they will allow us to run out of clean air. Some interventions may be necessary, to establish property rights ( which is what cap and trade does) but we are a long way from having the science to support them at this time. As Dr. Nordhaous concludes ‘the central questions about global-warming policy--how much, how fast, and how costly—remain open.’
With the current stimulus package flying in the face of everything we have learned from macroeconomic research over the last 60 years we have more reason to wonder just how much of our future polices will be the result of ‘knowing the facts, having them laid out, and then making the best choices that can be mustered.’
There has certainly been a problem in the past with closed mindedness and fact spinning with regard the environmental and health benefits of biotechnology ( although I would say that this was likely due more to environmental hypochondriacs and those that are averse to capitalism and technology on the left , as opposed to the Bush administration’s policies) However, if the current administration is open minded and curious about the science of agriculture and willing to embrace the evidence and communicate that to others, that will be a great thing. As stated later in the article:
"The EU approach has helped keep African countries from adopting GM [genetically modified] crops," agrees De Greef of EuropaBio. "We hope if the EU and US become less adversarial, it could remove pressure from Africa, which feels forced to choose between US or EU regulations."
The current administration may warm up much better to the Europeans, and as a result win some influence that could be beneficial to the biotech industry. That would be refreshing, as long as we are not selling them on our policies in exchange for some of their more troubling ideas regarding healthcare , taxes, and unemployment.
Source: Nature Biotechnology 27, 237 - 244 (2009)
"Obama is clearly a science buff, and is really, honestly, into knowing the facts, having them laid out, and then making the best choices that can be mustered," says a policy watcher who was close to the transition team but is outside the federal government. "It is a whole different approach compared to the 'How can we spin this information?' approach of the [Bush administration]. Back to 'honest-to-goodness' curiosity, which is, yes, incredibly refreshing."
This sounds like it could be good for biotech, but I’m not so refreshed. It seems that in the past the approach of those favoring larger government and regulation has been only to embrace the science that supports their interventions. This is more of a feigned or disingenuous intellectual curiosity, which really is no different than ‘How can we spin this information.’ Policy makers often pretend to embrace science, but really are ‘invoking the name and mystique of science to override other peoples choices’ to borrow a phrase from economist Thomas Sowell.
Examples that come to mind include aggressive attempts to combat climate change, despite the lack of consensus with regard to the effectiveness of such policies. They may have established a consensus that the earth is warming , but that is only the first step in a long process of determining an optimal policy procedure. If we are going to tax carbon or establish a market based cap and trade solution, then we need to be able to determine the relevance of our carbon foot print and put a price on it. Price ranges are all over the board, from the credulous Stern reports estimate of $300/ton to William Nordhaus more rigorous estimate of $30/ton ( which is still 10 times the implied price via Kyoto).
Currently there are private exchanges allowing producers to sell carbon offsets in a voluntary market. We should start from there. By the time we figure out the ‘optimal policy’ it is likely that the private market will have taken care of the problem for us as it has many times in the past. Markets and technological change have never allowed us to run out of copper, coal, cattle, oil ,or numerous other natural resources, there is no reason to believe they will allow us to run out of clean air. Some interventions may be necessary, to establish property rights ( which is what cap and trade does) but we are a long way from having the science to support them at this time. As Dr. Nordhaous concludes ‘the central questions about global-warming policy--how much, how fast, and how costly—remain open.’
With the current stimulus package flying in the face of everything we have learned from macroeconomic research over the last 60 years we have more reason to wonder just how much of our future polices will be the result of ‘knowing the facts, having them laid out, and then making the best choices that can be mustered.’
There has certainly been a problem in the past with closed mindedness and fact spinning with regard the environmental and health benefits of biotechnology ( although I would say that this was likely due more to environmental hypochondriacs and those that are averse to capitalism and technology on the left , as opposed to the Bush administration’s policies) However, if the current administration is open minded and curious about the science of agriculture and willing to embrace the evidence and communicate that to others, that will be a great thing. As stated later in the article:
"The EU approach has helped keep African countries from adopting GM [genetically modified] crops," agrees De Greef of EuropaBio. "We hope if the EU and US become less adversarial, it could remove pressure from Africa, which feels forced to choose between US or EU regulations."
The current administration may warm up much better to the Europeans, and as a result win some influence that could be beneficial to the biotech industry. That would be refreshing, as long as we are not selling them on our policies in exchange for some of their more troubling ideas regarding healthcare , taxes, and unemployment.
Source: Nature Biotechnology 27, 237 - 244 (2009)
Thursday, March 05, 2009
National Health Care Links
Markets generate prices which reflect trade-offs based on the knowledge and preferences of millions of individuals, and provide incentives to act on that knowledge to allocate resources. Eliminating the price mechanism through national health care only takes the information and coordination problem away from markets, and places it in the lap of government. With government, decisions are based on the limited knowledge and preferences of a few bureaucrats.
From the Journal of Physicians and Surgeons
Here, ( JPANDS)
"When the government denied Mr. D. the new medicine on the
grounds that the subsidies would cost too much, he offered to pay
the full cost of the medicine himself. He was denied the option to
pay full cost out of his own pocket because, the bureaucrats said, it
would set a bad precedent and lead to unequal access to medicine."
"discoveries of this magnitude are ruled out in Sweden:
In our budget-governed health care there is no room for
curious, young physicians and other [medical]
professionals to challenge established views. New
knowledge is not attractive but typically considered a
problem [that brings] increased costs and disturbances in
today’s slimmed-down health care…. Primarily the system
endorses health care regions and administrative directors
who can show a surplus in their budget. Quality of care and
patients’well-being are second-tier goals."
NATIONAL HEALTH CARE IN CANADA
CBC NEWS here
"Overcrowding in the emergency ward at Royal Columbian Hospital in New Westminster has become so bad that patients are being forced to sleep in closets, says a senior surgeon."
"There are patients that are literally in closets. They're in the nurses' lounge, where the nurses go to have coffee, there are patients in there," said Dr. Bertrand Perey, the hospital's deputy chief of surgery."
"In other words, we have an acute shortage of beds in all wards, surgeries have been cancelled because of this overcrowding and it's becoming a much worse problem than it ever was before."
here
“It’s becoming clearer that Canada’s current health-care system cannot meet the needs of Canadians in a timely and efficient manner, unless you consider access to a waiting list timely and efficient,” Esmail added.
NATIONAL HEALTH CARE IN THE UK
From the BBC :
"Dr Rustin said that before he sees a patient he has to check their postcode to see which health authority pays for their treatment. He says he can only then prescribe the drug if he knows the authority will fund it.
He said authorities have to make a crude calculation.
"They want to show that we can improve duration of life with a new drug and they then try to calculate the extra duration of life," he said.
"If you get an extra year of life for less than £10,000 then it is generally considered that that is a reasonable buy."
From the Telegraph, here ,
From a Patient in the UK:
"In two hours time I have to attend a clinic in a town 15 miles away for follow up mammography. There is no mammography available in the borough where I live,pop 380,000.I worked hard to raise funds for a breast cancer unit in our DGH, that has all now been shipped out to a PFI hospital in another town. This despite a petition of 50,000 names asking for this and various other departments not to be closed"
here ,
"THE controversy over hospital waiting lists will continue to dog the Government in the forthcoming election campaign, a study by mathematicians claims"
here
"To commemorate the 60th anniversary of the founding of the NHS, Gordon Brown plans to introduce a "constitution" setting out the rights and responsibilities of our healthcare system"
What this seems to amount to in practice are the Government's rights to refuse treatment, and the patient's responsibilities to live up to what the state decides are model standards.
UK Daily Mail
"plans by NICE, the Government's drug rationing body, mean no life-extending therapies will be available to new patients because the cost of the most expensive exceeds its threshold of £30,000 per head"
From the Journal of Physicians and Surgeons
Here, ( JPANDS)
"When the government denied Mr. D. the new medicine on the
grounds that the subsidies would cost too much, he offered to pay
the full cost of the medicine himself. He was denied the option to
pay full cost out of his own pocket because, the bureaucrats said, it
would set a bad precedent and lead to unequal access to medicine."
"discoveries of this magnitude are ruled out in Sweden:
In our budget-governed health care there is no room for
curious, young physicians and other [medical]
professionals to challenge established views. New
knowledge is not attractive but typically considered a
problem [that brings] increased costs and disturbances in
today’s slimmed-down health care…. Primarily the system
endorses health care regions and administrative directors
who can show a surplus in their budget. Quality of care and
patients’well-being are second-tier goals."
NATIONAL HEALTH CARE IN CANADA
CBC NEWS here
"Overcrowding in the emergency ward at Royal Columbian Hospital in New Westminster has become so bad that patients are being forced to sleep in closets, says a senior surgeon."
"There are patients that are literally in closets. They're in the nurses' lounge, where the nurses go to have coffee, there are patients in there," said Dr. Bertrand Perey, the hospital's deputy chief of surgery."
"In other words, we have an acute shortage of beds in all wards, surgeries have been cancelled because of this overcrowding and it's becoming a much worse problem than it ever was before."
here
“It’s becoming clearer that Canada’s current health-care system cannot meet the needs of Canadians in a timely and efficient manner, unless you consider access to a waiting list timely and efficient,” Esmail added.
NATIONAL HEALTH CARE IN THE UK
From the BBC :
"Dr Rustin said that before he sees a patient he has to check their postcode to see which health authority pays for their treatment. He says he can only then prescribe the drug if he knows the authority will fund it.
He said authorities have to make a crude calculation.
"They want to show that we can improve duration of life with a new drug and they then try to calculate the extra duration of life," he said.
"If you get an extra year of life for less than £10,000 then it is generally considered that that is a reasonable buy."
From the Telegraph, here ,
From a Patient in the UK:
"In two hours time I have to attend a clinic in a town 15 miles away for follow up mammography. There is no mammography available in the borough where I live,pop 380,000.I worked hard to raise funds for a breast cancer unit in our DGH, that has all now been shipped out to a PFI hospital in another town. This despite a petition of 50,000 names asking for this and various other departments not to be closed"
here ,
"THE controversy over hospital waiting lists will continue to dog the Government in the forthcoming election campaign, a study by mathematicians claims"
here
"To commemorate the 60th anniversary of the founding of the NHS, Gordon Brown plans to introduce a "constitution" setting out the rights and responsibilities of our healthcare system"
What this seems to amount to in practice are the Government's rights to refuse treatment, and the patient's responsibilities to live up to what the state decides are model standards.
UK Daily Mail
"plans by NICE, the Government's drug rationing body, mean no life-extending therapies will be available to new patients because the cost of the most expensive exceeds its threshold of £30,000 per head"
Tuesday, March 03, 2009
Sunday, March 01, 2009
Hold on to your wallets, and your cell phone!
Back in September Peter Wallison wrote a piece debunking the myth that deregulation was the cause of our financial shortfalls these past couple of years. One thing that he noted was :
"It is correct to say that there has been significant deregulation in the U.S. over the last 30 years, most of it under Republican auspices. But this deregulation--in long-distance telephone rates, air fares, securities-brokerage commissions, and trucking, to name just a few sectors of the economy where it occurred--has produced substantial competition and innovation, driving down consumer costs and producing vast improvements and efficiencies in our economy."
Today I found this piece from Reuters affirming that the current administration is ready to reverse these trends. It's important to remember during this period of zeal for re-regulation that one of the effects of deregulation has been to bring prosperity to the masses. One of the most liberating technologies of the last decade has been affordable telecommunications and internet access.
"It is correct to say that there has been significant deregulation in the U.S. over the last 30 years, most of it under Republican auspices. But this deregulation--in long-distance telephone rates, air fares, securities-brokerage commissions, and trucking, to name just a few sectors of the economy where it occurred--has produced substantial competition and innovation, driving down consumer costs and producing vast improvements and efficiencies in our economy."
Today I found this piece from Reuters affirming that the current administration is ready to reverse these trends. It's important to remember during this period of zeal for re-regulation that one of the effects of deregulation has been to bring prosperity to the masses. One of the most liberating technologies of the last decade has been affordable telecommunications and internet access.
Saturday, February 21, 2009
Stimulus / Economy Links
Saturday, February 14, 2009
American Recovery and Reinvestment Act of 2009
Here you will find the transcript of questions and answers given during our president’s first press conference.
It seems that our president is taking the lead on promoting much more of a 'Keyenesian' style stimulus, with little interest in providing incentives through tax cuts.
“But as we've learned very clearly and conclusively over the last eight years, tax cuts alone can't solve all of our economic problems -- especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it's only helped lead us to the crisis we face right now.”
Of course tax cuts won’t solve all of our problems, but they are a very large part of the puzzle. While the package is including many types of tax rebates and credits, there is no indication that it will maintain the marginal tax cuts that Bush implemented early in his presidency. Nothing is mentioned about across the board cuts in corporate or capital gains taxes. History, economic theory, and empirical evidence indicate that in fact tax cuts for the very wealthy can be a very powerful tool in stimulating the economy.
Thomas Sowell provides data from the US Budget Historical tables ( I checked these ) indicating that with the Regan tax cuts, we saw revenue increases, not deficits or stagnation.
Lawrence Lindsey ( 1987) noted that for incomes greater than $200,000 per year, ( i.e. tax cuts for the rich) the Regan tax cuts lead to an increase in reported incomes and increased collections. For those earning > $200K per year, we saw the following increases in collections:
1982 – 3%
1983 – 9%
1984 – 23%
( see Lindsey, Lawrence B. 1987. “Individual Taxpayer Response to Taxcuts, 1982-1984.” J. of Public Economics 33 (July) 173-206 , also noted in: Robert Barrow. Macroeconomics- 5th Edition MIT Press 1997
And for the recent Bush tax cuts: ( see this from a recent WSJ)
"Taxes paid by millionaire households more than doubled to $274 billion in 2006 from $136 billion in 2003. No President has ever plied more money from the rich than George W. Bush did with his 2003 tax cuts. These tax payments from the rich explain the very rapid reduction in the budget deficit to 1.9% of GDP in 2006 from 3.5% in 2003." ( see historical tables link above )
Also, straight from the historical tables provided by the office of management and budget you will see that from 2004-2007 there was a 25% surge in tax revenues, ( in face of tax cuts) which was the largest 3 yr surge since 1966. ( again I checked the math)
Certainly ‘marginal’ tax cuts lead to increased economic activity and therefore increase tax revenues, both being remarkable indicators of success, not failure.
In another part of the press conference, President Obama seems unconvinced that there were problems with the New Deal policies implemented during the Great Depression:
“Now, you have some people, very sincere, who philosophically just think the government has no business interfering in the marketplace. And in fact there are several who've suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago.”
However, many economists believe that Keynesian fiscal spending is the wrong answer to our problems, and that the interventions of FDR actually lengthened and deepened the depression in the 30’s. Below I provide the following links to supporting references.
Cole & Ohanion – recent (2004) research indicating FDR’s policies prolonged the depression
Cole & Ohanion
- previous published research, New Deal policies provided a 'negative shock' prolonging the depression.
Prescott: Published research -In the conclusion it is made clear that FDR's policies that made the depression ‘great’.
Barro - WSJ Notable and Quotable
Gary Becker - WSJ skeptical on fiscal stimulus.
Mario Rizzo on Keynes own admissions of fiscal stimulus limits.
Mankiw on how weak fiscal stimulus is vs tax cuts. (WSJ)
Barro more on the weakness of New Deal policies.
Sargent:
'John Cochrane, a professor at the University of Chicago Booth School of Business, says that among academics over the last 30 years, the idea of fiscal stimulus has been discredited and in graduate courses, it is "taught only for its fallacies."
New York University economist
Thomas Sargent agrees: "The calculations that I have seen supporting the stimulus package are back-of-the-envelope ones that ignore what we have learned in the last 60 years of macroeconomic research."
Mankiw lists a number of prominent economists opposed to the stimulus such as (omitting some I listed above) Alberto Alesina, Eugene Fama, Robert Lucas, Kevin Murphy, Harald Uhlig, and Luigi Zingales-
200 more economists ( again some redundancy) that believe that the stimulus package is based on flawed economics:
“Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance.More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.”
It seems that our president is taking the lead on promoting much more of a 'Keyenesian' style stimulus, with little interest in providing incentives through tax cuts.
“But as we've learned very clearly and conclusively over the last eight years, tax cuts alone can't solve all of our economic problems -- especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it's only helped lead us to the crisis we face right now.”
Of course tax cuts won’t solve all of our problems, but they are a very large part of the puzzle. While the package is including many types of tax rebates and credits, there is no indication that it will maintain the marginal tax cuts that Bush implemented early in his presidency. Nothing is mentioned about across the board cuts in corporate or capital gains taxes. History, economic theory, and empirical evidence indicate that in fact tax cuts for the very wealthy can be a very powerful tool in stimulating the economy.
Thomas Sowell provides data from the US Budget Historical tables ( I checked these ) indicating that with the Regan tax cuts, we saw revenue increases, not deficits or stagnation.
Lawrence Lindsey ( 1987) noted that for incomes greater than $200,000 per year, ( i.e. tax cuts for the rich) the Regan tax cuts lead to an increase in reported incomes and increased collections. For those earning > $200K per year, we saw the following increases in collections:
1982 – 3%
1983 – 9%
1984 – 23%
( see Lindsey, Lawrence B. 1987. “Individual Taxpayer Response to Taxcuts, 1982-1984.” J. of Public Economics 33 (July) 173-206 , also noted in: Robert Barrow. Macroeconomics- 5th Edition MIT Press 1997
And for the recent Bush tax cuts: ( see this from a recent WSJ)
"Taxes paid by millionaire households more than doubled to $274 billion in 2006 from $136 billion in 2003. No President has ever plied more money from the rich than George W. Bush did with his 2003 tax cuts. These tax payments from the rich explain the very rapid reduction in the budget deficit to 1.9% of GDP in 2006 from 3.5% in 2003." ( see historical tables link above )
Also, straight from the historical tables provided by the office of management and budget you will see that from 2004-2007 there was a 25% surge in tax revenues, ( in face of tax cuts) which was the largest 3 yr surge since 1966. ( again I checked the math)
Certainly ‘marginal’ tax cuts lead to increased economic activity and therefore increase tax revenues, both being remarkable indicators of success, not failure.
In another part of the press conference, President Obama seems unconvinced that there were problems with the New Deal policies implemented during the Great Depression:
“Now, you have some people, very sincere, who philosophically just think the government has no business interfering in the marketplace. And in fact there are several who've suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago.”
However, many economists believe that Keynesian fiscal spending is the wrong answer to our problems, and that the interventions of FDR actually lengthened and deepened the depression in the 30’s. Below I provide the following links to supporting references.
Cole & Ohanion – recent (2004) research indicating FDR’s policies prolonged the depression
Cole & Ohanion
- previous published research, New Deal policies provided a 'negative shock' prolonging the depression.
Prescott: Published research -In the conclusion it is made clear that FDR's policies that made the depression ‘great’.
Barro - WSJ Notable and Quotable
Gary Becker - WSJ skeptical on fiscal stimulus.
Mario Rizzo on Keynes own admissions of fiscal stimulus limits.
Mankiw on how weak fiscal stimulus is vs tax cuts. (WSJ)
Barro more on the weakness of New Deal policies.
Sargent:
'John Cochrane, a professor at the University of Chicago Booth School of Business, says that among academics over the last 30 years, the idea of fiscal stimulus has been discredited and in graduate courses, it is "taught only for its fallacies."
New York University economist
Thomas Sargent agrees: "The calculations that I have seen supporting the stimulus package are back-of-the-envelope ones that ignore what we have learned in the last 60 years of macroeconomic research."
Mankiw lists a number of prominent economists opposed to the stimulus such as (omitting some I listed above) Alberto Alesina, Eugene Fama, Robert Lucas, Kevin Murphy, Harald Uhlig, and Luigi Zingales-
200 more economists ( again some redundancy) that believe that the stimulus package is based on flawed economics:
“Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance.More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.”
Saturday, February 07, 2009
PROMOTING THE GENERAL WELFARE
PROMOTING THE GENERAL WELFARE
Recently I was involved in a discussion regarding the constitutionality of national health care. Someone pointed out that it was constitutional on that same basis as Social Security, based on the supreme court’s decision Helvering v. Davis (1937) The justification was based on the General Welfare clause in Article 1 Section 8 of the US Constitution:
‘The Congress shall have power to lay and collect taxes, duties, imposts and Excises, to pay the debts and provide for the common defence and general welfare of the United State’
This is followed by a listing of the ‘enumerated’ powers of the federal government. The court decided that the federal government could collect taxes and use them for providing social security , as it was interpreted that the phrase ‘general welfare’ was open ended and implied that congress could do anything that promoted the public good. Further, it admitted that ‘general welfare’ was an ambiguous term, and it was not the place of the courts to decide its meaning, but that it should be left to the discretion of the congress. This is perhaps the most damaging aspect of the decision. Not only did it decide congress could do most anything it wants as long as it promoted the ‘common welfare’ but it was up to congress to police itself with regards to constitutionality. This decision turned the concept of separation of powers and federalism on its head. Further, it was in direct contradiction to what the founders implied when they drafted the constitution.
According to James Madison, the term ‘general welfare’ was meant to generalize about the specifically enumerated powers in A1 Section 8 of the Constitution.
‘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. If the words obtained so readily a place in the "Articles of Confederation," and received so little notice in their admission into the present Constitution, and retained for so long a time a silent place in both, the fairest explanation is, that the words, in the alternative of meaning nothing or meaning everything, had the former meaning taken for granted.’ - letter to James Robertson from James Madison
Above he states that the term ‘general welfare’ is defined by the other powers in A1 S8 and means nothing more. He was also perplexed that those opposed to the constitution had the fear that the term ‘general welfare’ would give congress unlimited power, when similar wording appeared in the weaker Articles of Confederation, which they supported.
More is said of this in Federalist # 41:
‘It has been urged and echoed, that the power to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States amounts to an unlimited commission to exercise every power which may be alleged to be necessary for common defence or general welfare.
‘But what would have been thought of that assembly, if , attaching themselves to those general expressions , and disregarding the specifications which ascertain and limit their import, they had exercised an unlimited power of providing for the common defense and general welfare?’
It appears that in Helvering v. Davis brought to bear the worst fears that the anti-federalists had anticipated, and is clearly counter to the intention of our founders. Madison in fact believed that this fear was unfounded and that the anti- federalists were being silly, grasping for straws, looking for some far fetched reason to oppose the adoption of the constitution, because he was certain that it was self evident that ‘general welfare’ was defined by the enumerated powers and nothing else. He stated that the belief of anything else was a ‘misconstruction.’
‘No stronger proof could be given of the distress under which these writers ( meaning the antifederalists) labor for objections, than their stooping to such a misconstruction.’
To clear up this confusion, and straighten out the ‘misconstruction’ that they presented, Madison adds the following, also from 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.’
i.e. the phrase ‘general welfare’ is defined and explained by the enumerated powers of government that follow in Article 1 Section 8 of the constitution.
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.’
Finally from Federalist # 45 Madison states:
‘The powers delegated by the proposed constitution to the federal government are few and defined.’
By that logic, if ‘general welfare’ takes on the meaning implied by Helvering v Davis, then the federal governments delegated powers would not be few, and if ‘common welfare’ is not determined by the specifically enumerated powers in the constitution, then it is not defined. In Helvering, the courts make a terrible error in ruling that the powers of the federal government can be defined any way congress desires based on the ‘general welfare clause.’
Recently I was involved in a discussion regarding the constitutionality of national health care. Someone pointed out that it was constitutional on that same basis as Social Security, based on the supreme court’s decision Helvering v. Davis (1937) The justification was based on the General Welfare clause in Article 1 Section 8 of the US Constitution:
‘The Congress shall have power to lay and collect taxes, duties, imposts and Excises, to pay the debts and provide for the common defence and general welfare of the United State’
This is followed by a listing of the ‘enumerated’ powers of the federal government. The court decided that the federal government could collect taxes and use them for providing social security , as it was interpreted that the phrase ‘general welfare’ was open ended and implied that congress could do anything that promoted the public good. Further, it admitted that ‘general welfare’ was an ambiguous term, and it was not the place of the courts to decide its meaning, but that it should be left to the discretion of the congress. This is perhaps the most damaging aspect of the decision. Not only did it decide congress could do most anything it wants as long as it promoted the ‘common welfare’ but it was up to congress to police itself with regards to constitutionality. This decision turned the concept of separation of powers and federalism on its head. Further, it was in direct contradiction to what the founders implied when they drafted the constitution.
According to James Madison, the term ‘general welfare’ was meant to generalize about the specifically enumerated powers in A1 Section 8 of the Constitution.
‘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. If the words obtained so readily a place in the "Articles of Confederation," and received so little notice in their admission into the present Constitution, and retained for so long a time a silent place in both, the fairest explanation is, that the words, in the alternative of meaning nothing or meaning everything, had the former meaning taken for granted.’ - letter to James Robertson from James Madison
Above he states that the term ‘general welfare’ is defined by the other powers in A1 S8 and means nothing more. He was also perplexed that those opposed to the constitution had the fear that the term ‘general welfare’ would give congress unlimited power, when similar wording appeared in the weaker Articles of Confederation, which they supported.
More is said of this in Federalist # 41:
‘It has been urged and echoed, that the power to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States amounts to an unlimited commission to exercise every power which may be alleged to be necessary for common defence or general welfare.
‘But what would have been thought of that assembly, if , attaching themselves to those general expressions , and disregarding the specifications which ascertain and limit their import, they had exercised an unlimited power of providing for the common defense and general welfare?’
It appears that in Helvering v. Davis brought to bear the worst fears that the anti-federalists had anticipated, and is clearly counter to the intention of our founders. Madison in fact believed that this fear was unfounded and that the anti- federalists were being silly, grasping for straws, looking for some far fetched reason to oppose the adoption of the constitution, because he was certain that it was self evident that ‘general welfare’ was defined by the enumerated powers and nothing else. He stated that the belief of anything else was a ‘misconstruction.’
‘No stronger proof could be given of the distress under which these writers ( meaning the antifederalists) labor for objections, than their stooping to such a misconstruction.’
To clear up this confusion, and straighten out the ‘misconstruction’ that they presented, Madison adds the following, also from 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.’
i.e. the phrase ‘general welfare’ is defined and explained by the enumerated powers of government that follow in Article 1 Section 8 of the constitution.
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.’
Finally from Federalist # 45 Madison states:
‘The powers delegated by the proposed constitution to the federal government are few and defined.’
By that logic, if ‘general welfare’ takes on the meaning implied by Helvering v Davis, then the federal governments delegated powers would not be few, and if ‘common welfare’ is not determined by the specifically enumerated powers in the constitution, then it is not defined. In Helvering, the courts make a terrible error in ruling that the powers of the federal government can be defined any way congress desires based on the ‘general welfare clause.’
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