Supremes Global Warming Science

Roger Pielke writes about Mass. v. EPA:

First there is a science error in the majority opinion, though it seems clear that it would not change their judgment of injury. It states:

. . . global sea levels rose somewhere between 10 and 20 centimeters over the 20th century as a result of global warming.

According to the IPCC’s Third Assessment Report this value is more like 3 to 5.5 centimeters (from figure 11.10b here) with the rest of the 10 to 20 centimeters total due to natural causes. The Supreme Court has attributed all sea level rise to global warming which is incorrect. I had argued in earlier discussions that missing from this case, in arguments by both sides, was some evidence that the 3 to 5.5 centimeters of increase over the 20th century due to human-caused climate change can be related to some injury.

This seems like an interesting observation. The public policy debate about the global warming issue doesn't seem to clearly make this distinction either, so perhaps the Supreme Court should not be faulted. But, it may be interesting to note that most of sea level rise that has resulted from the warming climate is not being attributed human causes.

Tax or Cap-Trade?

Ian Parry discusses economic policy with respect to carbon emissions:

The CO2 tax has a number of advantages over pure emissions trading systems. In particular, if the revenues from the tax are used to reduce other taxes, the policy might actually benefit the economy overall, and the tax also avoids problems that might be caused by permit price volatility under an emissions trading regime.

Global Warming Quiz

Russell Roberts:

Suppose we discovered that the earth was cooling rather than warming due to a natural cycle. Would you encourage people to drive more and use more carbon-based energy as a way of warming the earth?

He explains the point of his quiz with:

I suspect that some people's ideal policy towards the earth's climate is that it should be whatever it would be if people didn't exist. Or whatever it would be if people lived in loincloths without fire. That is, the ideal climate is the natural one, because our species is unnatural. In this world view, humans are a poison on the earth and the reason we should put on a carbon tax or discourage fossil fuels is that our use of the earth's resources is somehow immoral. . . . .

I agree that at least some of those concerned about global warming seem to hold this view, or something much like it. A student in one of my past environmental economics courses expressed it something like this: "I think humans are the scourge of the earth; pretty much the same as humans view rats."

It is not clear to me why we would be thought unnatural, or why our choices, our technologies, our economies would be thought unnatural. If the conceptual view that supports efforts at using government to "fix" the global warming problem is whether something is natural or unnatural, then wouldn't the idea have to be that human presence on earth was not the result of evolution of life on earth but because we somehow came from outside the earth system?

I think there is a similar question to the one asked by Roberts which might also be interesting to consider. As I understand it, average global temperature has increased and decreased over a large range of values over the course of the earth's history. You can view a chart of the history of average global temperature here. The brief discussion that accompanies this chart characterizes climate history in these terms:

During the last 2 billion years the Earth's climate has alternated between a frigid "Ice House", like today's world, and a steaming "Hot House", like the world of the dinosaurs.

The chart indicates that "today" the earth is in another cycle of warming. It seems to me the earth would be warming "today" even without the pollutants from our economic activities that are a fundamental part of the concern expressed by those who want government to make some effort to fix the global warming problem. I wonder, if we thought the globe was warming, but we also had not figured out that our economic activities might contribute to the warming today, would there be people calling for government to find some way to stop the warming? Whether the globe is warming for reasons that we think make the warming a "natural" phenomenon, or for reasons that are attributed to our economic activities, the impacts of the global warming would seem pretty much the same. And, given that the policy issue today involves concern for "human induced warming," I wonder if efforts at using public policy to reduce the "human induced warming" are successful, if there would be continued efforts to reduce or slow the warming that is naturally determined?

Oh, and one more note about the global climate chart. Note that in the description of the history presented in the chart, today is characterized as a "frigid ice house" by historical comparison.

Capitalism

Andrew Carnegie:

Capitalism is about turning luxuries into necessities.

Courtesy of Mark Skousen.

Road to Poverty

Russell Roberts:

Self-sufficiency is the road to poverty.

Well said.

Wilkie v. Robbins

IDB Editorial:

The roots of this case go back to 1993 when Harvey Frank Robbins bought the High Island Ranch in Hot Spring County, Wyo. The previous owner had agreed to give the Bureau of Land Management an easement on his land. There was no record of the agreement, however, and Robbins, who was not aware of the deal at the time of purchase, did not want the government using roads on his property. Because of his refusal, Robbins says the government began a campaign of retaliation against him to extort the easement.

Writing in Legal Times, Robbins' lawyers R.S. Radford and Timothy Sandefur of the Pacific Legal Foundation said the government "repeatedly harassed the guests at (Robbins') ranch, cited him for minor infractions while letting similar violations by his neighbors go unnoticed, and brought him up on criminal charges of interfering with federal agents during their duties. The jury acquitted him after deliberating for less than 30 minutes."

Our government's position:

In representing the government, Solicitor General Paul Clement wrote a brief that includes the heading:

"There Is No Fifth Amendment Right Against Retaliation For The Exercise Of Property Rights."

Or, in less legalistic terms used by Harvard law professor Laurence Tribe when arguing on Robbins' behalf before the Supreme Court, "The position of the government here is that there is no constitutional limit on the kind of retaliation they can engage in."

Shocking?

Circumventing the Constitution -- Why?

E.J. Dionne:

It does not have to be this way. As someone who lives in Maryland, I am proud that my state may pioneer a process that could lead to popular election of the president. The state Senate passed a bill last Wednesday that would commit Maryland's 10 electors to voting for the winner of the nationwide popular vote. The bill is expected to pass in the House of Delegates this week, and Gov. Martin O'Malley has said he would sign it.

The law would not take effect unless states representing a 270-vote electoral college majority pass similar laws. The idea is to create a compact among states genuinely committed to popular rule.

Yes, this is an effort to circumvent the cumbersome process of amending the Constitution. That's the only practical way of moving toward a more democratic system. Because three-quarters of the states have to approve an amendment to the Constitution, only 13 sparsely populated states -- overrepresented in the electoral college -- could block popular election.

I don't get it. Why do we want to circumvent the Constitution? Why wouldn't we want to have a public debate about whether to continue with the electoral college? Why wouldn't we want to have a nation wide conversation about the merits and the faults of amending the Constitution? And, why would we not want a super majority, as the Constitution requires, to agree on the rules that determine how our President is chosen?

Trucking Protectionism

Wall Street Journal ($$) editorial:

Speaking of protectionism, another bad economic omen is the way Senate Democrats are blocking access to the U.S. for Mexican long-haul trucks.

The truck opening was part of Nafta and was supposed to be completed seven years ago. In February, the Transportation Department finally announced a plan to grant 100 Mexican companies permission to exceed the current 25-mile limit on the U.S. side of the border for a one year period, thus delivering their cargo to its final destination across America. That would be good for U.S. consumers and productivity because distribution would immediately be more efficient. It would also show that the U.S. keeps its treaty commitments.

But if Mexican truckers don't have to hand their cargo to an American truck and driver, it would also mean real competition for U.S. truckers. That's anathema to the Teamsters union, which tapped Democrats Byron Dorgan (North Dakota), Dianne Feinstein (California) and Patty Murray (Washington) to do its bidding by sponsoring an amendment to delay the proposal and attaching it to the Iraq and Afghanistan war supplemental spending bill.

Equality Amendment

Some members of Congress seem to be interested in adding a Women's Equality Amendment to the Constitution, and it sounds like this new amendment would be a replay of the language in the Equal Rights Amendment which was never ratified. George Will's assessment includes this:

The full inclusion of women in America's regime of rights was accomplished in the 20th century without an ERA, a constitutional redundancy that would have added nothing to the guarantees of equal protection of the laws and due process for all "persons." And what mature person thinks the Constitution should be cluttered with consciousness-raising pieties or affirmations, on the theory that, by some mysterious causality, the social climate will be improved?

It seems to me Will is correct here to suggest that the 14th Amendment and the Court's interpretation of the 14th Amendment makes it clear that women are to be treated the same as all other persons vis a vis the government. A Women's Equality Amendment would seem to be redundant.

Does anyone want to suggest specific reasons why this proposed amendment would not be redundant?

Or, does this proposed amendment suggest that the new Congress is spending way too much time on matters of little import?

Zimbabwe: Rule of Law Lacking

Investor's Business Daily:

Famine, disease, crumbling infrastructure, poor education, shrinking incomes — these are just a few of Africa's afflictions. And, as Zimbabwe shows, many are self-inflicted.

African leaders often point fingers at the West for "not doing enough." But last week's meeting of the Southern African Development Community shows why sensible wealthy nations are reluctant to give aid.

For at that meeting, some of Africa's so-called leaders disgraced themselves by endorsing the brutal, murderous regime of Zimbabwe's Robert Mugabe.

Mugabe's 27 years of misrule have taken a country that was once prosperous — the breadbasket of Africa, it was called — and turned it into a poverty-stricken hellhole rife with famine, genocide and terror, and lacking rule of law.

And the economy?

"Corruption is endemic, inflation is in triple digits, most economic activity is informal, and controversial land reform has seriously undermined agricultural production,"

[ . . . ]

Seizures of farms from highly productive farmers have led to widespread hunger. Meanwhile, economic mismanagement has sent inflation soaring to 1,700% a year. Real output per person has plunged two-thirds since 2003.

With the economy imploding . . . the government has simply taken to printing money. Faced with such economic chaos, more than 3 million people — many of them Zimbabwe's most productive citizens — have become refugees in neighboring countries.

. . . the U.N. issued a frightening forecast of more starvation for Zimbabwe, where some 1.4 million people are, in U.N. parlance, "food insecure."

Zimbabwe once had plentiful food — it even exported it to neighbors. Today it needs 1.8 million metric tons of food to feed its people, but grows a third of that.

News & Politics

Don Surber:

So there you have it. When Democrats lard up an emergency bill, Washington reporters say it is for “pet projects.”

When Republicans do it, it is pork.

Put that alongside calling tax-exempt groups “non-profits” and calling lobbyists for liberal causes “activists.”

This is all on the same shelf as the journalism rule that when a Republican is a crook, you identify his party immediately. If Democratic, disclosing the party affiliation is optional.

Could this be true?

Victor Davis Hanson's Clarity On The War

Victor Davis Hanson:

Should a peace candidate win the American presidency in 2008, prompting the U.S. to pull out of Iraq before the democracy there is stabilized, in the short term we will save lives and money. But as the larger war continues after we withdraw, jihadists will still flock to the Sunni Triangle. Hamas and Hezbollah will still rocket Israel. Syria will still kill Lebanese reformers. Iran will still try to cheat its way to a nuclear bomb. Ayman al- Zawahiri will still broadcast his al-Qaida threats from safety in nuclear Pakistan. The oil-rich, illegitimate Gulf sheikdoms will still make secret concessions and bribe increasingly confident terrorists to leave them alone. And jihadists will still try to sneak into the United States to kill us.

Critics of the present war can make the tactical argument that it is wiser to fight al-Qaida in Pakistan than in Iraq. Or that money spent in the frontline Iraqi offensive theater would be better invested on defense and security at home. Or that the human cost is simply too great and thus we should instead make diplomatic concessions to radical Islamists in lieu of military confrontation.

But, again, those are operational alternatives found in every war - as familiar as the old controversies over the French defensive Maginot Line of the 1930s or the American decision to defeat Germany first, Japan second. In the case of staying on in Iraq, at least, our long-term plan is to go on the offensive to confront radical Islamic terrorists on their own turf, and try to foster a democratic alternative to theocracy or autocracy.

That may be felt by the American public to be too expensive or too naive, but it is a direct strategy aimed at an enemy who seeks to terrorize the West and plans on being around well after 2008.

Depending on how we leave Iraq, this global war against radical Islamic terrorism will either wax or wane. But it will hardly end.

I always learn from the clarity of Victor Davis Hanson. But, with the winds of surrender, retreat, and defeat blowing so heavily these days in Washinton, sometimes his clarity and wisdom can be downright depressing, eh?

Senators Biden & Hagel 2002

Michael Ledeen posts a very interesting look back to commentary by Senators Biden and Hagel. This is what Ledeen finds in their commentary from the Washington Post in December of 2002:

Every U.S. Senator believes he or she should be president. Just listen to them talk, and watch the way they walk; it’s obvious. They’re rarely called to account, but every now and then they write something, and it goes into the record, and then someone googles it out. So take a look at this very statesmanlike op-ed that Biden and Hagel wrote four and a half years ago. Notice they had no clue what would happen after the overthrow of Saddam. Notice that they bought into the Saudi view of life, namely that nothing of merit can be accomplished until there is some deal with Israel and the Palestinians. And notice they knew, long ago, that this would be slow,and we’d have to remain for quite a while. Ten years anyway.

It is worth your time to read the entire commentary by Senators Biden and Hagel.

Here are the last two sentences of the Biden-Hagel commentary:

As the bulwark of freedom and democracy, the United States faces the need to disarm Saddam Hussein and set the stage for a stable Iraq, win a protracted war on terrorism and engage fully on the Israeli-Palestinian conflict. Working with our friends and allies, it is a challenge we can, and must, meet.

Yet, today, neither of these Senators sounds like this. I wonder why we elect such men to national office if they have such short memories about their own views? Or perhaps they don't have bad memories, perhaps they have changed their minds about challenges "we can, and must, meet." I wonder why we elect such men who seem to have only a very short term resolve in facing challenges "we can, and must, meet"? Do true leaders give up in the face of challenges so easily as these two men seem to have given up?

Once again, perhaps we see here the way in which the Curse of the Rationally Ignorant Voter plays itself out in our system of political economy.

Sowell on Democrat's Iraq Strategy

Tom Sowell:

The demagoguery of the Democrats has already put them in the position where a successful conclusion of the Iraq war before the 2008 elections can be a political disaster for them.

If the recent increase in the number of troops in Iraq, and their freer hand in dealing with the terrorists there, reduces the level of violence enough to stabilize Iraq enough for American troops to start coming home before the 2008 elections, the Democrats will have lost their gamble.

Only an American defeat in Iraq can ensure the Democrats' political victory next year. Their only strategy is to sabotage the chances for a military victory in Iraq without being held responsible for a defeat.

That is the corner that they have painted themselves into with their demagoguery that even their own supporters see through.

Public Choice on Democratic Failure

Peter Leeson:

This paper empirically evaluates two competing theories of electoral accountability in the context of New Orleans’ 2006 mayoral election. According to the democratic efficiency theory, voters can successfully punish ineffective political agents by removing them from office. In contrast, the public choice theory argues that the bundled nature of political goods prevents voters from successfully holding ineffective politicians accountable. We find that although there is limited support for the punishment effect predicted by the democratic efficiency theory, this effect is overwhelmed by the fact that the bundle of goods politicians offer contains elements that pull in opposing directions. This prevents the punishment effect from having any real impact, leading to democratic failure. Our results support the public choice theory of electoral (un)accountability.

Why Aren't Stories Like These In The Papers?

Marty Lederman reports the relevant language in the House and Senate bills concerning what Senator McCain is reported to call a "forced surrender date." It is informative to actually read the text of the legislation. I am not going to comment on the legislative texts. I'm going to ask why the newspapers and news magazines don't give us news stories like this? Lederman writes:

One oddity, however, is that it remains rare for newspapers and other outlets to link to, or even quote from, important legislation being considered in Congress, even when it's the grist for front-page stories. The recent legislative debates concerning proposals to hasten withdrawal from Iraq are a prime example. I've yet to see a single newspaper article online that actually links to or quotes from the provisions that have been the subject of such heated debate in Washington over the past few weeks. It's odd to expect the public to be able to meaningfully understand and debate these important initiatives without knowing what they say.

Maybe it is odd to expect the public to be able to express meaningful views on proposed legislation when the proposed legislative language is not readily available. Maybe it is not. Maybe it is odd to assume that assertions made by politicians and pollsters about the will of the voters have meaning when we know that stories like Lederman's do not routinely appear in the news sources that are readily available to us.

It also seems to me, perhaps a bit odd that we do not routinely find news articles like Lederman's. Surely at least part of the news story about the "forced surrender date" is what is required by the written language in each piece of legislation in question. Sometimes I wonder why it is thought that the "news" is what politicians say. Yet, that seems to me mostly what we read and hear in the "news," and it seems that those who report the "news" believe they learn what the news story is by asking politicians to comment.

There have been many times in the past that I've read and heard news stories about legislation and statutes and court opinions, and I've suspected that I wasn't getting the entire story (or the "rest of the story" to borrow from Paul Harvey). In such cases, when I've taken the time to find the legislation or statute or court opinion, very often I've discovered that my (more informed view) of the story was quite different from the press stories. I think the curious thing about my experiences is that because of the web it has generally taken very little time for me to obtain the original materials. In many cases I've obtained a copy of the original materials in 10 or 15 minutes or less, and I've read what I was looking for in far less than an hour. I would guess that Lederman wrote his story, including obtaining the statutory text, in under an hour.

So, it seems to me we should routinely find "news" stories such as Lederman's in our newspapers and our news magazines. But, we don't. I guess those in the news industry simply don't think such stories fall within the realm of news. I think that should seem odd to us. Or, perhaps those who write the "news" stories aren't very competent.

In any case, when I'm interested in a controversial issue concerning politics and government I simply don't trust the "news."

Vietnam Liberty

From the Wall Street Journal ($$):

The five democrats who go on trial today stand accused of threatening the Vietnamese state for demanding rights that citizens of free countries take for granted. Those dissidents, and all Vietnamese people hungry for liberty, deserve support from the free world.

Crichton On Liberty

Micheal Crichton is interviewed by Scott Burgess. I just had to note the following question and answer:

What is the most serious threat facing our civilisation?

Loss of classical liberal values in those western societies that embraced them.

England was the first modern state, the first superpower, the first nation to deal with moral issues around the world, and the first nation to install the benefits of what we might now loosely term a liberal society. I mean that in the 19th century sense of liberalism. That notion of liberalism was also present in America, but made it to the Continent only in a pale and limited form. It is a wonderful social conception that must be vigilantly guarded. It is not shared by other nations in the world. Nor is it shared by many citizens in English-speaking countries. Peculiarly, many of our most educated citizens are least sympathetic to classical liberal ideals. Indeed the term 'liberalism' in the modern day has come to imply a constellation of attitudes that John Stuart Mill would not recognize as liberal at all. Nor would, say, John F. Kennedy recognize them as liberal. Kennedy's conception of liberalism was simultaneously more tolerant and more tough-minded: tolerant about varieties of behavior within the society, and tough-minded toward threats to a tolerant society from without.

That's all gone, now. Today there is far too much sensitivity within societies, and too little hard-nosed recognition of threats from without. We are inclined to be intolerant of speech by our friends and neighbors, and tolerant of beheadings, rape, and homophobia in distant lands.

This makes no sense. But here we are.

Constitution, Congress & Attorneys

George J. Terwilliger, III writes an interesting op-ed in the Wall Street Journal ($$) concerning the Constitution and the recent firings of several US Attorneys.

With subpoenas looming and Justice Department lawyer Monica Goodling taking the Fifth before Congress, the controversy over the firing of U.S. Attorneys grows closer to becoming not just a political fight, but a court battle. There seems little justification for a legal war, however, and the courts are not likely to enforce Congressional subpoenas to presidential aides.

What does the Constitution tell us about this recent political tussle in Washington? One thing the Constitution tells us is that Congress and the President are different branches of government with different powers:

Congressional powers are only those "herein granted" expressly by Article I the Constitution, which provides a long, explicit list of its authorities. In contrast, Article II of the Constitution provides that "[t]he executive power" is vested in the president and, while Article II contains enumerated powers of the president, it does not limit that authority to those expressed. Expansive executive authority reflects Alexander Hamilton's recognition that "[a] feeble executive implies a feeble execution of the government."

[ . . . ]

Congress has the exclusive power to legislate, but the power to execute the laws is entrusted to one person alone -- the president. The ability to appoint, retain or fire anybody to carry out these responsibilities is a core executive function, properly left to his unfettered discretion. This has been recognized by the Supreme Court. As the Court observed in a case growing out of the House Un-American Activities Committee investigations of the 1950s, "We have no doubt that there is no congressional power to expose for the sake of exposure."

Duh. Pretty basic. Pretty simple. The President has the executive power and Congress has the power to legislate.

Of course, in order to legislate the Congress needs information, and in order to understand how legislation is working it needs to learn about how the statutes it creates are being executed by the Executive Branch of government. So,

Since Congress does need to legislate with knowledge of the historical impact and efficacy of its prior legislation, courts have held that Congress has the power and authority to make inquiries in connection with its legislative function. But when it directs its inquiries to core functions of executive officials, the executive has the right to resist.

Congressional oversight, in other words, is specifically all about carrying out Congress's legislative function. Congressional oversight is not general oversight of the activities of the other branches of government, not even the Executive branch. Congressional oversight serves as a means for carrying out the legislative activities of Congress.

Mr. Terwilliger puts the general Constitutional framework into specifics with respect to the "issue" at hand:

The broad question currently being addressed is why the president fired some U.S. attorneys whom he had previously appointed. Congress seems poised to provoke a constitutional confrontation to get the answer. Congress should lose that battle because the answer, as to these specific cases, seems well outside the scope of anything Congress could legislate. Under the Constitution, it is solely within the president's prerogative to terminate the tenure of these officials. His decision to do so is not subject to oversight by Congress or review by the courts. Thus, on balance there is no compelling need for Congress to obtain information about his deliberations. And judiciary recognizes a privilege of privacy attaching to those executive deliberations.

Congress may ask the president why he fired these officials and its members may disagree or question the rationale for removal, and do so in a very public way. That is politics. But it does not follow that the president's aides can be forced to come to Congress and give information under oath. The check on a president's corrupt or otherwise wrongful exercise of this plenary power to remove is not legal, but political.

It seems to me that most of the time when the Supreme Court is asked to take up a conflict between the other branches of government it declines to get involved when the matter, as a bottom line, is fundamentally a political issue.

How can we decide if the issue at hand is a political issue? One thing I like to consider in this regard is where the Supreme Court would find power to enforce it's opinion, what ever that opinion might be. If the Supreme Court were to choose to engage this conflict between the other 2 branches of government, and if it were to decided the Congress was supposed to have the power to force members of the Executive branch to testify, how could the Court compel those employees of the Executive branch to go to Congress and speak? Most of the judicial power of the Supreme Court vis a vis the other branches of government is found in a negative way in that the Court can simply refuse to enforce a law it finds to be unconstitutional. But, the Court really has no direct way to compel another branch of government to act in ways the Court decides are constitutional ways they should act. In such cases, it seems to me that any power the Supreme Court would have vis a vis the other branches of governement would come from the political realm. That is, the Court's power would have to come, in such cases, from there being many citizens who would accept the Court's opinion on the Constitution and thereby express disapproval, even outrage, at the failure of another branch of government to agree to act as the Supreme Court has directed. So, when the Supreme Court would have to rely on citizens expressing their disapproval toward the President, or toward the Congress, to enforce it's opinion regarding another branch of government, the issue is, bottom line, a political issue. Most of the time the Supreme Court has chosen not to become engaged in such issues, and that is the proper choice for the Court to make.

This US Attorney issue seems, bottom line, to be fundamentally a political issue. The Court should stay away from the issue, and today's opposition Congress should take it's political efforts against today's President directly to the citizens. At least that's the way our constitutional system of government is structured.

Well, maybe there is another useful role the Supreme Court might play in matters such as these. It could choose to become engaged so that it could make it clear to Congress, the President, and the citizenry that issues such as these are purely political issues. If it chose this course of judicial action, do you suppose Congress might feel a little political pressue from we the people to refrain from such behavior in order to attend a bit more to it's legislative powers? Probably not. But, maybe the voters would be less likely to misunderstand the political nature many of the actions of an opposition Congress.

Kurdistan's Success

Michael Totten has a very interesting report from Iraqi Kurdistan. This "country" is safe and seems on the path of prosperity. Take a look at his pictures of all the new buildings and developments. It seems to me one can interpret these new developments as suggesting the government of Kurdistan is providing the necessary conditions for economic prosperity. Totten points out that:

Kurdistan’s rise flips Iraq on its head. The Kurds are ahead, but they started from nothing. Under Saddam’s regime they had the worst of everything – the worst poverty, the worst underdevelopment, and worst of all they bore the brunt of the worst violence from Baghdad. 200,000 people were killed (out of less than four million) and 95 percent of the villages were completely destroyed.

With the old Iraq government 95% of the villages in Kurdistan had been destroyed. Now, we see signs of growing success and prosperity. Perhaps the following helps us explain these observations:

Iraqi Kurdistan is de-facto independent already. The three northernmost provinces exist as a liberal-democratic state-within-a-state with their own parliament, their own laws, their own immigration policies, and their own military, border guards, and police.

Here are some of the other things Totten reports about Kurdistan:

-- I have never seen so much construction going up so quickly anywhere.

-- Erbil isn’t pretty, as Paris and Vienna are pretty. Some of it is aesthetically brutal, and much of it is still rough around the edges. But it’s stimulating and interesting all the same. The go-go-go and build-build-build attitude is infectious. Every time I come here it looks cleaner, and richer, and more like a normal place.

-- I’m less prone to boredom here than I am in Europe’s splendid capitals even though there is little in the way of entertainment culture. Erbil is the most ramshackle of Iraqi Kurdistan’s cities, but there is real raw power rising in this city and land.

-- Arabs are moving up here from the center and south – when they can, and as long as they are cleared by internal security – and they’re hired to do menial jobs the Kurds no longer want. Sunni Arabs were once the oppressors of Kurds. Now they are reduced to the same low status as migrant Mexican workers in the United States.

-- A whole new town called “American Village” is under construction next to the luxurious Khan Zad hotel on the road between Erbil and the resort town of Salahadin. Foreigners and locals alike are snapping up the properties well in advance.

Wow, this sounds really good. Just think, there is a region of Iraq so successful that immigrants are moving there and many, including foreigners, are investing in property there.

You should read the entire piece, and don't dare miss the photos that show the reality of investment in Kurdistan.

I will leave one last tidbit that can thrill an economist's heart:

“You see this place now with its government, its democracy, and its system of laws,” my guide Hamid said. “It wasn’t like this even recently, believe me. Before, it was a jungle.”

There is great wisdom, it seems to me, in pointing to "its system of laws."

Senate Curly Tails

I like Glenn Reynolds:

THEY'RE RUNNING AWAY WITH THEIR LITTLE CURLY TAILS BETWEEN THEIR LEGS: The Senate has just passed an Iraq withdrawal bill, which like the House bill was laden with pork to buy votes.

It's a disgrace, but par for the course for this bunch.

Billboard Senate Blues

The Washington Post reports on Senator Reid's protection of billboards, which he says is "a matter of personal importance":

In a (quite) large sign that protecting U.S. troops isn't the only thing on Senate Majority Leader Harry Reid's mind these days, the Nevada Democrat inserted an item into the Senate's Iraq war funding bill -- safeguarding billboards.

Senate debate began yesterday on the bill, which provides $122 billion for the wars in Iraq and Afghanistan; sets a goal of March 31, 2008, for withdrawing U.S. troops from Iraq; and -- if Reid has his way -- allows thousands of billboards destroyed by bad weather to be rebuilt.

An opponent of Reid's measure is quoted in the news article:

Kevin Fry, president of Scenic America, said: "The bill carves out an exception to local land-use rules for a single industry that is not available to any other. . . . One might reasonably ask why legislation affecting the South and Southeast was introduced by a senator from Nevada."

Is it also just too much to ask that the Senate majority leader, and every member of Congress for that matter, consult the Constitution? It seems to me that the Supreme Court's constitutional jurisprudence has taken local land use rules to be a matter of police power, which is supposedly reserved by the 10th Amendment for state government. Constitutionally speaking, Congress is supposed to have certain enumerated powers which are located in Article I, Section 8. I can't find the police power there, nor can I find any other power in the list of enumerated powers that I think sounds like specifying rules for billboards.

Is there something I'm missing?

Agricultural Subsidies & Congress

The Wall Street Journal ($$) has interesting commentary today concerning agricultural subsidies.

Congress is preparing to rewrite farm policy this year, which means the farm lobby will try to tap taxpayers for another $18 billion or so per year to subsidize agribusiness. Some things in politics can't be changed. But is it asking too much for Congress at least to cut off subsidies to the richest Americans, many of whom don't even farm for a living?

The point of the commentary is to discuss a proposal by the President to cap farm subsidy payment eligibility at $200,000 annual adjusted gross income (AGI). Currently the cap is at $2.5 million AGI. You can probably tell from the quote above that the WSJ supports the reduced cap, and the WSJ seems not really to support agricultural subsidies at all. Of course, I don't support agricultural subsidies, because as any Econ 101 student learns agricultural subsidies are bad economic policy.

But, what is really interesting about the commentary are some of the numbers presented.

. . . . In 2004, 276 Washington, D.C. "farmers" filed an IRS "Schedule F" -- for taxpayers who actively participate in their farms -- and 80 of them reported AGI of more than $200,000. If you've been to the District of Columbia lately, you've probably noticed it isn't overrun with corn fields. The D.C. 80 almost certainly do something else as their main occupation, and we'd like to know how many of them also cadge farm payments on the side. Who are these mystery farmers anyway?

Yes, indeed, who are these DC farmers? Let's see, there are what, 435 members of Congress? Many of these are certainly from farm states. There are sure to be at least a few agricultural subsidy lobbyists. And, then, there are all the political appointees to the Executive Branch agencies, and certainly at least a few of these are involved in the agricultural subsidies programs of our government. I have to guess that at least a few of these DC farmers are active participants in the political process that chooses the agricultural subsidy programs.

Okay, let's forget the DC farmers for a minute. I wonder how many "farmers" around the country with AGI of $200,000 or more receive farm subsidies?

All in all, some 38,000 "farmers" who reported AGI of more than $200,000 in 2004 received more than $400 million in federal farm subsidies, or about 5% of all farm program payments that year. . . .

Unfortunately, the WSJ commentary points out that the proposed change in cap value is "controversial":

With all the political and media chatter about "inequality" these days, you'd think this welfare for the rich would cause a stir. But this is Washington, where corporate welfare is a bipartisan industry. The lower AGI subsidy cap has turned out to be the most controversial Bush farm proposal and is running into stiff opposition on Capitol Hill.

"I'm not sure that Congress is going to go along with that whole concept of the $200,000 AGI. At least I'm not supportive of it," declared Missouri Republican Jo Ann Emerson at a recent hearing. Arkansas Democrat Blanche Lincoln, who runs the subsidy subcommittee in the Senate, also opposes reducing farm welfare for the rich.

The National Cotton Council has been especially vocal, with Chairman John Pucheu declaring that "means testing continues to be bad policy." He added that "The Administration's proposal greatly expands the intent of Congress, which imposed a $2.5 million AGI means test in the current farm bill aimed primarily at eligibility of those with substantial non-farm income." So $200,000 isn't substantial?

That is an interesting question, at least I think it is in view of my AGI.

Well, back to the topic of the DC farmers. It turns out that at least one of the DC farmers is Iowa Senator Charles Grassley.

By the way, one gentleman farmer who's doing the right thing is Iowa Senator Chuck Grassley. According the Des Moines Register, Mr. Grassley reported net income of $25,177 from his 800-acre family farm in 2005 and received about $34,000 in farm subsidies that year. But at least he's supporting the subsidy means test.

I'm glad to read that Senator Grassley supports the new cap. But, again, I find the interesting tidbit of information in the numbers shown here. For this DC farmer, the government subsidy payments received are greater than the net income reported from the farm which is the object of the subsidy payments. Actually, I think the government subsidy payments are just about 35% greater than the net income reported from the farm. Now that is an interesting business. The numbers also suggest that government has chosen a very interesting public policy for agriculture. I suppose, when you think about all these numbers, what we have in here is a pretty good illustration of why economists tend to think agricutural subsidies are such bad economic policy.

Top Ten Emergency Earmarks

Just in case you want to keep score on the earmarks Politico reports a list of the top ten:

--$165,200 to the widow of Rep. Charles Norwood (R-Ga.), a promoter of patients’ rights legislation who died of cancer and lung disease in February, three months after he was reelected.

--$4 million for the Office of Women's Health at the Food and Drug Administration.

--$5 million for tropical fish breeders and transporters for losses from a virus last year.

--$25 million for spinach that growers and handlers were unable to market, up to 75 percent of their losses.

--$50 million “for asbestos abatement and other improvements” to the Capitol Power Plant.

--$60.4 million for the National Marine Fisheries Service, “to be distributed among fishing communities, Indian tribes, individuals, small businesses, including fishermen, fish processors, and related businesses, and other persons for assistance to mitigate the economic and other social effects caused by” a commercial fishery failure.

--$74 million “for the payment of storage, handling, and other associated costs for the 2007 crop of peanuts to ensure proper storage of peanuts for which a loan is made.”

--$120 million for the shrimp and menhaden fishing industries to cover consequences of Hurricane Katrina.

--$283 million for the Milk Income Loss Contract Program.

--$400 million for “wildland fire suppression.”

And, that was just in the House. The Senate has pork plans as well:

Next week, the Senate will take up its version of the war bill, which includes such sweeteners as $13 million for Ewe Lamb Replacement and Retention Program, $24 million for sugar beet producers and $165.9 million for fisheries disaster relief.

I suppose what I'm going to write next will just sound silly. But, when you look at the enumerated powers in Article I, Section 8, where can we find Congress having the power to do the things on these lists? Does the power to regulate interstate commerce include the power to pay for ewe lamb replacement or to subsidize milk income losses, or to give "our" money to spinach farmers for unmarketed crops? I know, I know, the Supreme Court has surely allowed Congress to assert such things as falling under the power to regulate interstate commerce. Oh, and by the way, where is the enumerated power to give tax dollars to a widow? And, all of this as part of an emergency national defense appropriations bill. What a shame.

Congress Is A Mess

John Fund:

Nothing highlighted Congress's spending problem in last year's election more than earmarks, the special projects like Alaska's "Bridge to Nowhere" that members drop into last-minute conference reports leaving no opportunity to debate or amend them. Voters opted for change in Congress, but on earmarks it looks as if they'll only be getting more smoke and mirrors.

Democrats promised reform and instituted "a moratorium" on all earmarks until the system was cleaned up. Now the appropriations committees are privately accepting pork-barrel requests again. But curiously, the scorekeeper on earmarks, the Library of Congress's Congressional Research Service (CRS)--a publicly funded, nonpartisan federal agency--has suddenly announced it will no longer respond to requests from members of Congress on the size, number or background of earmarks. "They claim it'll be transparent, but they're taking away the very data that lets us know what's really happening," says Oklahoma Sen. Tom Coburn. "I'm convinced the appropriations committees are flexing their muscles with CRS."

Indeed, the shift in CRS policy represents a dramatic break with its 12-year practice of supplying members with earmark data. "CRS will no longer identify earmarks for individual programs, activities, entities, or individuals," stated a private Feb. 22 directive from CRS Director Daniel Mulhollan.

When Sen. Coburn and Sen. Jim DeMint of South Carolina submitted earmark inquiries recently, they were both turned down. Each then had heated conversations with Mr. Mulhollan. The director, who declined to be interviewed for this article, explained that because the appropriations committees and the White House's Office of Management and Budget (OMB) were now preparing their own lists of earmarks, CRS should no longer play a role in the process. He also noted that both the House and Senate are preparing their own definitions of earmarks. "It is not appropriate for us to continue our research," his directive states.

There is at least one member of Congress who wants to end the corruption:

Sen. Coburn plans to fight back. He says he will attach an amendment to every appropriations bill demanding CRS prepare a full report on the earmarks in it. "Let senators vote for secrecy and prove they don't want a transparent process or let them deliver what they promised," he says. "The choice will be theirs and the American people will be watching."

It seems to be the case that many people are watching. I suspect a large part of the Republican defeats in the last election were due to many people thinking the party running Congress was misuing Congressional power. Now the other party runs the Congress and it seems nothing has changed. Or, perhaps it would be safe to say something is changing in Congress, i.e., the members of Congress are now trying very hard to hide their earmarking corrupt ways from public view. Of course, that is not a good change.

Even though there are many Americans who are paying attention to Congress and earmarks, many, many are not. Perhaps the Curse of Rational Ignorance just can't be broken?

Earmarks

Politico:

The House Appropriations Committee granted members a six-week extension to submit earmark requests as the ethics chairwoman waved off suggestions that her committee had issued a report to clarify the new standards for the requests.

Why not try extending the idea that earmarks are wrong, and therefore, the practice of members of Congress making earmarks will be stopped?

Constitution & Attorneys

John Yoo in the WSJ ($$)

But presidents need to have their own people in place in order to promote a consistent, national agenda. While U.S. attorneys can gather better information on, and react more swiftly to, local conditions, the Constitution still gives the president the responsibility to govern the activities of all U.S. officials. As James Madison said in 1789 in the first Congress, "no power could be more completely executive than that of appointing, inspecting and controlling those who had the immediate administration of the laws." Ever since, the Supreme Court has recognized that the power to remove is the power to control.

The president has no constitutional authority to order executive branch officials to obey his policies, except by removing them. If independence rules, the defense secretary could double the surge of troops into Baghdad to end the fighting there, the secretary of state could settle the Korean nuclear crisis on easier terms, and the attorney general could stop bringing drug trafficking cases if he disagreed with the war on drugs.

Critics want to insulate U.S. attorneys from political control by the president. Some have proposed over the years that the attorney general either be elected or chosen through some "neutral" non-political process. But how do you guarantee "neutrality"? Our Constitution's well-tempered system of checks and balances already does that quite well. Presidents are elected because of their political preferences and are expected to manage the executive branch accordingly. Congressmen do the same. Since when has a Democratic congressman, to be neutral and fair, had to hire Republicans on his staff?

His view of the Constitution sure seems right to me. It also seems this hubbub is purely contrived. As I noted recently, there sure seems to be a lot of this sort of stuff with Congress these days. Can we say it is the curse of the rationally ignorant voters?

There They Go Again

Here's an interesting question from the pages of Investors Business Daily:

Did anyone believe Democrats would actually cut pork and keep their promise that they wouldn't force an early Iraq pullout? For those who did, we suggest a quick trip through the news.

So, what can be discovered by such a trip?

In the House, lawmakers are considering the Democrats' $124 billion war funding bill that not only includes $21 billion for political pet projects, but also establishes an ill-advised Aug. 31, 2008, deadline for bringing the troops home from Iraq.

The legislation, swollen with $3.7 billion in farm subsidies, is expected to be voted on Thursday. It also includes $500 million for wildfire suppression, $283 million in milk subsidies, $100 million for citrus growers, $75 million for peanut storage, $25 million for spinach growers and $15 million for rice farmers.

Well, well, well. A bill to fund national defense expenditures includes farm subsidies. Imagine that. Why should we not be surprised? Seems we have a little casual empiricism to help us feel good about public choice economics.

Yesterday I linked to commentary in the Wall Street Journal that pointed out that the Speaker of the House had started buying votes, and today the Investor's Business Daily points out how some of those votes are being bought, i.e., farm subsidies.

It seems to me the first 2 or 3 months of the new Congress is not a pretty sight.

Our elected representatives are seen on the floors of Congress debating endlessly resolutions that are not binding and seem to have no meeting except to express a lack of will to help the constitutionally elected government of Iraq provide security that is essential for the new government's success and that is essential to get the country on the path to some future prosperity.

There was passage of legislation that would increase the minimum wage, and thereby also cause some employees to be disemployed.

There was an interesting promise of the first hundred days that seems to have quietly fizzled, unless you want to fuss over things that were fussed over during the first 100 days, such as, to paraphrase a former President, "It depends on what the meaning of days is." Perhaps the House is still in the first 100 days, but no one seems to be talking about the promises made.

Now, in the defense legislation the House will vote on whether or not to send a memo to the enemies of the new government of Iraq with the subject line: "Hey, just hang on a while longer, we are about to leave."

There was the time spent on public hearings about an employee of the CIA and an alleged crime that justified the full time work of a special prosecutor. Yet, I understand that by the time the special prosecutor took up his job, he already knew no violation of a criminal statute had occurred, and he even knew who had committed the revelation that was a non-crime. Still, our Congress chose to waste time on issues that seem only to matter as yet another act in a political play.

And, there is yet another political furor being contrived over a President who fired US attorneys. The best I can figure out is the positions in question are filled by people who serve "at the pleasure of the President." In other words, the very conditions of employment for these positions includes the clear condition that the President can fire you from the position for absolutely any reason. The furor seems a contrivance of congressional Democrats, and perhaps the media, to offer up yet another act in their political play. Just consider that in this act of the play people in Congress want to pretend they are shocked that the President, the person who is elected to head the Executive Branch of government, a political branch of government, may well have fired the US attorneys in question for political reasons. Oh my, what are we to do?

I have, of late, frequently pointed out the public choice insight that people are rationally ignorant, and I have noted how the actions of our public officials seem quite consistent with this insight. I suppose we do need a Congress, but perhaps that is not so clear when the members of Congress spend so much of their time doing things that seem mostly about finding ways to use the rational ignorance of voters to personal advantage.

This Is Our Congress

Wall Street Journal:

So what's a leader of Congress to do to get a majority? You know the answer: Let the vote-buying begin!

Thus has Mr. Bush's request for $100 billion to fund the troops in Iraq and Afghanistan, plus $3 billion to replenish the disaster-relief fund, devolved into a $124.6 billion logrolling extravaganza. You can get the flavor from the bill's very first words on page two: "Title I--Supplemental Appropriations for the Global War on Terror Chapter 1 Department of Agriculture Foreign Agricultural Service." Forget the Marines; send in the meat inspectors.

This bill has everything the modern military doesn't need. There's $25 million for spinach, designed to attract the vote of Sam Farr, a California farm-region liberal. Perhaps spinach growers who lost business due to last year's E. coli scare need this taxpayer bailout, but it won't intimidate the Taliban unless Mr. Farr plans to draft Popeye.

Other lowlights include $20 million to restore farmland damaged by freezing temperatures, and $1.48 billion for livestock farmers. And don't forget the $74 million "to ensure proper storage for peanuts," an urgent national-security need. This happens to be about the same amount that House Democrats propose to increase spending for operations of the Army Reserve, so it's good to see Congress has its priorities in order.

Then there are the provisions to raise the minimum wage, at one pace for the continental U.S. but at a separate, slower pace for the Northern Mariana Islands. And $500 million for "urgent wildland fire suppression"--that's forest fires, not weapons fire. There's so much more, if only the press corps would take the time to look.

This pork-barrel blowout is grounds enough for a Presidential veto. But the vote-buying is more important for what it says about Congress and the way it wants to micromanage the war. Any legislature is essentially a committee of special interests, each of which wants to be massaged. This is true of war strategy as much as farm policy. The goal isn't victory in Iraq, but "victory" on Capitol Hill, which means cobbling together a majority of 218 in the House and 51 in the Senate. Logrolling and micromanagement are two sides of the same coin of the legislative Pentagon.

This is our Congress, ain't it grand?

Congressional Ethics? Congressional Corruption?

THE POLITICO:

A new congressional ethics rule is causing headaches for lawmakers as they scrambled to meet Thursday's deadline to request funding for projects in their districts.

The new rule, instituted on the first day of the new Democratic-controlled Congress in response to recent scandals, requires members to certify that they have no financial interest in projects they seek to fund.

But the rule is too ambiguous, congressional aides said, making lawmakers unsure of what constitutes a financial interest and whether a favorable comment about a project would be considered a request.

House Minority Leader John Boehner (R-Ohio) wrote to House Speaker Nancy Pelosi (D-Calif.) Thursday for clarification, calling the issue "a matter of profound concern to many of our members on both sides of the aisle."

"There are many ways by which members express support for specific appropriations - both orally and in writing - at various stages of the legislative process," Boehner wrote. "In the absence of written guidance, members are understandably uncertain about which official actions would trigger the requirement in the rule."

Boehner asked whether specific instances, such as raising the issue with a committee chairman or voting for a bill containing the provision, would constitute a formal request and require the financial certification.

Noting the House ethics committee was responsible for resolving the confusion, Boehner lamented that Democrats had not given the panel more funding.

"The failure of the ethics committee to provide essential guidance to members in a timely manner has placed members seeking to advocate for much needed funds in a dangerous and untenable position," Boehner wrote. "I hope you will agree with me that this situation is completely unacceptable, and will take whatever steps are necessary to rectify it."

Pelosi spokesman Nadeam Elshami said the ethics committee was working on the problem.

I don't know. All this just doesn't seem too confusing to me. If you are elected to office, and you suggest a project be funded or a policy be adopted, then why should you seek to hide (or not reveal) any personal, and I mean "any" in the sense of any slight interest or connection, interest in the project? Well, I suppose I can think of one reason, eh? You don't want to be completely transparent because that would make it seem like your political work involves at least a little bit of corruption. So, I suspect corruption is afoot when members say they are confused about whether Congressional ethics rules require them to be transparent.

Global Warming: Gore's Credibility

I was looking at an article in the New York times about global warming, much of which is about Al Gore, and I ran across this:

“He has credibility in this community,” said Tim Killeen, the group’s president and director of the National Center for Atmospheric Research, a top group studying climate change. “There’s no question he’s read a lot and is able to respond in a very effective way.”

The "he" in this reference is Al Gore. The group referred to here is the American Geophysical Union.

Now I have to wonder how the word credibility is defined. My dictionary reveals that credible means: capable of being believed; believable; plausible; worthy of confidence; reliable. It also says about credibility: worthiness of belief. None of this reminds me of a politician, in general, and certainly it doesn't remind of this politician in particular.

I've posted several times recently about politics and public choice theory, mostly about the idea of rational ignorance and the implications of rational ignorance for our politics and our system of political economy. I think many of those implications point to reasons we should not often associate politicians with the words in the definitions just above.

I'm having some trouble understanding why a politician of Mr. Gore's standing would be seen as credible by a group of scientists. I certainly do not see Mr. Gore's views about science as "worthy of confidence," while I do have much greater confidence in Mr. Gore's ability to turn the rational ignorance of voters to his personal advantage. So, I suspect Mr. Gore has credibility with this group of scientists, not because of his wisdom with respect to science, but rather with respect to his wisdom about global science politics. And, this leads me to yet another idea from public choice. Could it be that Mr. Gore has credibility with this group of scientists because the nature of the politics of this group of scientists fits the idea of rent seeking?

See, It's Global Warming

Russell Roberts:

. . . See, it's all about the science. The model is perfect. There are no outliers to be explained, no data that doesn't fit the model. Really hot? Global warming? Really cold? Global warming! It's a very powerful theory that explains everything.

Does sound like this doesn't it? What's a citizen supposed to think, eh?

Another Form of Senate Corruption?

Through a link by Glen Reynolds at Instapundit, I found Professor Bainbridge making an observation about Congress:

So it seems that we are ruled by crooks and cheats.

Hmm, wonder where that idea comes from? The stage is set by:

Taken together, the semi-strong and strong forms of the Efficient Capital Markets Hypothesis teach that no class of investors can beat the market over time without routine access to material nonpublic information. Many studies have shown that the only investors who, as a class, routinely produce postive abnormal returns are corporate insiders. . . .

You see Professor Bainbridge was commenting on a report in the Wall Street Journal about recent research that discovered something interesting about the investment savvy of members of the US. Senate:

A study suggests that U.S. senators possess stock-picking skills that even the most seasoned money manager would envy. During the boom years of the 1990s, senators' stock picks beat the market by 12 percentage points a year on average, according to the study. Corporate insiders, meanwhile, beat the market by about six percentage points a year, while U.S. households underperformed the market by 1.4 percentage points a year on average, according to separate studies. The final details of the study will be published in the December issue of the Journal of Financial and Quantitative Analysis. ...

Looking at the timing of cumulative returns, the senators also appeared to know exactly when to buy or sell their holdings. Senators would buy stocks just before the shares suddenly would outperform the market by more than 25%. Conversely, senators would sell stocks that had been beating the market by about 25% for the past year just when the shares would fall back in line with the market's performance.

Imagine that, eh? Senators just seemed to know when a stock outperforming the market would be best sold. Could be a little bird whispers in their ears, eh?

VDH: The Disingenuous Party

I think Victor Davis Hanson sees these issues clearly:

Unlike the invasion of Panama (1989), the Gulf war (1991), the Balkans war (1999) or even the Afghanistan conflict (2001-2007), Iraq has taken over 3,000 American lives. Had the reconstruction of Iraq gone as relatively smoothly as the three-week removal of Saddam, most Democratic candidates would now be heralding their past muscular support for democratic change in Iraq.

So instead of self-serving attacks on the present administration, Democratic senators and candidates should simply confess that while most of the earlier reasons to remove Saddam remain valid, the largely unforeseen costs of stabilizing Iraq in their view have proved too high, and now outweigh the dangers of leaving.

But they should remember one final consideration. The next time a Democratic administration makes a case for using America’s overwhelming military force to preempt a Milosevic or a mass murderer in Darfur — and history suggests that one will — the Democrats’ own present disingenuous antiwar rhetoric may come back to haunt them, ensuring that such future humanitarian calls will probably fall on ears as deaf as they are partisan.

It also seems likely these Democrat politicians know voters to generally be rationally ignorant, and thus, they also expect to get away with being disingenuous.

It's The Freedom, Stupid?

Sheldon Richman writes about Adam Smith's observation that "Nothing . . . can be more absurd than this whole doctrine of the balance of trade."

. . . . I've come away with a new appreciation of what the old Scotsman was saying. Concern about imports and exports really is ridiculous.

What is an export? What is an import? These words are defined in reference to political boundaries of only one kind: national boundaries. If there were no such boundaries, there would be no exports or imports. But political boundaries are just that. They are not economic boundaries. To the extent that they can, people go about their business as though those boundaries weren't there. People cross the Canadian-American and Mexican-American borders to transact business every day. If they give them a thought it is only because governments put up barriers patrolled my armed guards who make them wait in line. People learn early in life that they can gain immensely from trade, and with that understanding comes the insight that it doesn't much matter on which side of a Rand-McNally line your trading partner lives.

So the very concepts imports and exports are founded on an arbitrary construct that has little practical consequence for people's economic activities. Back in the 1980s, when neomercantilists feared Japan's economic success at selling us stuff (seems a little crazy now, no?), I used to ask what would happen to the trade deficit if Japan were made the 51st state. Obviously, the deficit would have disappeared because we don't reckon trade imbalances between states. Why not?

In reality, then, there are no imports and exports. There is only what I make and what everyone else makes. Few people would want to live just on what they themselves could make. Frederic Bastiat pointed out that each of us daily uses products we couldn't make in isolation in a thousand years. Talk about poor, solitary, nasty, brutish, and short! "What makes this phenomenon stranger still is that the same thing holds true for all men," Bastiat wrote. "Every one of the members of society has consumed a million times more than he could have produced; yet no one has robbed anyone else."

This is just another way of saying that the case for free trade is conceded the moment someone eschews self-sufficiency. After that, we're just haggling over the size of the trade area. But if free trade (read: division of labor) is good, then the bigger the free-trade area the better. Globalization should be the worldwide removal of all barriers to the exchange of goods and services -- rather than trade managed through state capitalism and multinational bureaucracies. Unilateral, unconditional free trade is the smartest policy.

Remember the political slogan "It's the economy, stupid?" Doesn't it seem like freedom's just another word for prosperity?

If you want to know why "made in China" makes no sense, then read the rest of Mr. Richman's essay.

More Carbon Offsets

The recent assertion that Al Gore is a carbon glutton has led to quite a number of articles and commentaries about "carbon offsets," which is like "cap and trade" policy being discussed as part of our policy toward global warming.

The basic idea of "cap and trade" (or carbon offsets) is an idea that comes from environmental economics. Different sources for controlling carbon emissions will have different marginal costs of control, and this means that it is possible to design, in principle, a public policy that achieves a reduction in carbon emissions at least cost.

Say that the cost to me of reducing one ton of carbon emissions from my economic activities would be $50. Suppose also that someone else is able to reduce a ton of carbon emissions from their own economic activities at a cost of $40. It would then be possible for me to pay this other person, say for illustration $44, to would reduce 1 ton of carbon emissions from his economic activities. The result would be a decrease in carbon emissions by one ton. At the same time, the other person would make an extra $4 on his supply of carbon emissions reduction to me, and I would keep an extra $6 in my pocket. As always, both parties to the voluntary exchange would be better off. At the same time, from the "social point of view" the cost of this additional 1 ton of carbon emissions reduced cost $6 less than if I had been the person to reduce the carbon emissions.

The WSJ summarizes well the reason for liking a cap and trade or carbon offsets approach to climate change policy:

This kind of trading works, and we've argued in these columns that cap-and-trade beats the pants off just plain capping by lowering the overall economic burden of a cap.

Unfortunately, even when the wisdom in the economic ideas gets the attention of our elected leaders in Washington, the way politics works means that if "cap and trade" is the basis for the public policy chosen to deal with climate change, it is most likely that "cap and trade" will not be implemented in a fashion that actually is the "cap and trade" from economics.

The same commentary in the WSJ points this out as well:

The difficulties don't lie with the trading, but with the cap, which is where the companies lobbying for restrictions come in. James Rogers, CEO of Duke Energy, put it plainly earlier this year: "If you're not at the table when these negotiations are going on, you're going to be on the menu." Translation: If a cap is coming, better to design it in a way that you profit from it, instead of being killed by it.

Which is why the emphasis really should be cap-and-trade. It's all about the cap, because without it there's no trading. We don't buy our daily ration of oxygen because it's in abundant supply. Same with carbon dioxide--there's no constraint on your ability to produce CO2 until the government creates one. When it does, it creates an artificial scarcity. What Duke, Entergy, TXU, BP, Dupont and all the rest want is to make sure that when the right to produce CO2 becomes limited, they're the ones that end up owning the allowances. Because that would mean they could sell them, and make money off something that previously wasn't worth a dime.

Thus, Entergy, a utility that relies heavily on natural gas and nuclear power and thus produces relatively less CO2, would love a cap that distributes the allowances based on how much electricity you churn out, rather than on how much CO2 you produce. Entergy's "carbon footprint" is small compared to some other utilities, so an electrical-output-based cap would be windfall city. Dupont, meanwhile, wants credit for reductions already made because it sees instant profit in costs already paid. It also wants a cap to cover as many industries as possible so it can make money selling emissions-reduction products.

We don't begrudge anyone the opportunity to make a buck. But there's a difference between making money by producing things people want and making money by gaming the regulatory process. There's no market here unless the government creates one, and who has the profit opportunity depends entirely on who the government picks as the winners and the losers in designing this market in the first place. So it's no wonder that almost any business that has ever put an ounce of CO2 into the atmosphere is rushing to show its cap-and-trade bona fides.

Note carefully what the businesses in support of cap and trade want the design of the cap and trade policy to look like. Basing the policy on electricity production isn't the economic idea, which of course focuses on the carbon emissions. Allowing previously achieved reductions to be sold later, is also not really the economic idea because so far there has been no cap imposed. Political incentives, rent seeking, and compromise are ideas that characterize the way our system of politics works, and they all point to the expectation that even a good economic idea is pretty unlikely to actually ever be implemented as conceptually explained and conceived.

The concluding paragraph in the WSJ commentary points to Bruce Yandle's theory of bootleggers and baptists that has been spawned by public choice theory:

The emerging alliance of business and environmental special interests may well prove powerful enough to give us cap-and-trade in CO2. It would make Hollywood elites feel virtuous, and it would make money for some very large corporations. But don't believe for a minute that this charade would do much about global warming.

The baptists of global warming are of course the environmental special interests and the virtuous Hollywood elites, and the bootleggers are the existing businesses that will provide the money to grease the wheels of climate change politics in return for the ability to design the rules in their favor. Unfortunately, this is just the way our system of political economy works.

Carbon Offsets

If you've been reading recently about Al Gore's carbon gluttony, you probably know that Mr. Gore's response to these accusations is that his life is carbon neutral because he buys carbon offsets. You may be wondering what a carbon offset is. You may even be asking yourself if you could buy some carbon offsets for yourself so that you, too, could be a carbon neutral sort of guy. If so, then you might want to check out DriveNeutral.

Here is what I learned about my family car when I visited DriveNeutral:

This car uses the equivalent of 571 gallons of gasoline each year. This means it produces 11077 pounds of CO₂ annually. You can neutralize your 2006 carbon emissions by purchasing a Tier Two DriveNeutral certification for $40.

I think these numbers are kind of interesting. So $40 divided by 571 gallons means I can, presumably, offset my family car carbon footprint for only about 7 cents per gallon. Can that be right? Why are some people talking about increasing the gasoline excise tax by at least 50 cents a gallon because of their global warming concerns? Now, divide 11077 pounds by 571 gallons, and the result is, according to these numbers, that I leave behind me 19.4 pounds of carbon dioxide for every gallon of gasoline I burn in the family car. Hmmmm, I wonder how much a gallon of gasoline weighs? I'm starting to wonder now if maybe I typed my family vehicle incorrectly when I visited Drive Neutral.

Baghdad Economies

Omar Fadhil writes about his experience in Baghdad, which seems encouraging for now:

Operation “Imposing Law” continues in Baghdad. In contrast with previous operations to secure the city, this one is managing to not only keep the initial momentum, but the operation’s effects seem to be growing as well. . . .
While many Iraqi families are returning to the homes they once were forced to leave, there are also Baghdadis who are reopening their stores, ending the months they spent out of business because of violence and intimidation. Some streets that were virtually deserted a few months ago are slowly showing signs of returning to life.

The reopening stores even include some liquor shops! There are two stores on one street that I used to shop that closed early last year when their owners received death threats from the insurgents and the militias. Yesterday I walked through that street and, to my amazement, I found both stores open and back in business.

Of course the reopening of two liquor stores is no big deal by itself when we are talking about a city where thousands of businesses are still shuttered. I regard this as a further positive sign of a change in Baghdad’s daily life. It means that those shopkeepers are leaving their fear behind, and openly ignoring the threats of militias and insurgents who once ruled the streets and intimidated the people with threats and violence.

I was reading Hayek's The Use of Knowledge in Society recently for one of my courses, and this description of Baghdad's daily life reminds me of Hayek's definition of economy. On Hayek's definition "economy" pretty much refers to the economic life of an individual, and as such, I think it makes at least some sense to associate "economy" with the daily life as people live it and experience it.

The report here that daily economic life in Baghdad is more and more involved with the activities of daily commercial enterprises suggests that increasing numbers of people in Baghdad are feeling greater personal security. It seems to me this is sort of a "leading indicator" that government is being more effective at providing security.

Of course, the economies of daily life are dynamic and today's appearance of growing expectations of security may turn in the future to expectations of deepening insecurity. So, I also like Fadhil's conclusion:

The results of Operation “Imposing Law” are not magical. We didn’t expect them to be magical. The commanders didn’t claim they’d be when the Operation began. Still these latest developments are certainly promising. And let’s not forget that what has been achieved so far was achieved while many thousands of the new troops assigned to Baghdad are yet to arrive.

Meetings

I knew there was a reason I hate meetings:

People have a harder time coming up with alternative solutions to a problem when they are part of a group, new research suggests.

I'm sure there are other reasons I don't like meetings, but this should be sufficient.

Leiberman: War Politics

Senator Lieberman:

Congress thus faces a choice in the weeks and months ahead. Will we allow our actions to be driven by the changing conditions on the ground in Iraq--or by the unchanging political and ideological positions long ago staked out in Washington? What ultimately matters more to us: the real fight over there, or the political fight over here?

Senator Lieberman has a insightful commentary. I think the answer has been pretty clear that what matters to most politicians is the political fight over here.

Porker Of The Year

The Porker of the Year for 2006 is:

Rep. Alan Mollohan (D-W.Va.) received 48 percent of the vote, with co-nominees Sens. Thad Cochran (R-Miss.) and Trent Lott (R-Miss.) receiving 25.5 percent, and Sen. John Thune (R-S.D.) receiving 22.9The finalists were chosen by CAGW staff from among the 12 Porker of the Month winners for 2006.

Rep. Mollohan was named Porker of the Month in April 2006 for abusing his position on the House Appropriations Committee by securing millions of dollars in earmarks that may have benefited him personally. The New York Times(4/08/06) detailed how Rep. Mollohan directed $250 million to five nonprofit organizations that he set up.Rep. Mollohan surrendered his seat as ranking Democrat on the House Ethics Committee in April.

Now this sounds like excellence in Congressional corruption, $250 million to your own personal benefit, eh? Kind of a shame he had to surrender his ranking Democrat on the Ethics Committee status too. I suppose ethics and corruption are two ideas that shouldn't be put together.

Obama's Worn Out Economic Ideas

Tom Sowell is watching the presidential politicians. If only the politicians would pay a little attention to Tom Sowell. Here is what Sowell writes about some of Senator Obama's favorite policies to talk about in his run for president thus far:

He thinks higher teacher pay is the answer to the abysmal failures of our education system, which is already far more expensive than the education provided in countries whose students have for decades consistently outperformed ours on international tests.

Senator Obama is for making college "affordable," as if he has never considered that government subsidies push up tuition, just as government subsidies push up agricultural prices, the price of medical care and other prices.

He is also for "alternative fuels," without the slightest thought about the prices of those fuels or the implications of those prices. All this is the old liberal agenda from years past, old wine in new bottles, a new face with old ideas that have been tried and failed repeatedly over the past generation.

This might be the best summary of the Senator's presidential policies:

Senator Obama is being hailed as the newest and freshest face on the American political scene. But he is advocating some of the oldest fallacies, just as if it was the 1960s again, or as if he has learned nothing and forgotten nothing since then.

We could also hope that voters would remember that all these policies have been tried before. So many of the policies politicians run on in elections, and so many chosen by legislatures, seem to be based on ideas that are simply foreign to economic reality.

But Sowell puts this better than I:

But politics is not about facts. It is about what politicians can get people to believe.

George Washington: Entrepreneur

John Fund:

Although George Washington was born 275 years ago tomorrow, most Americans think they know a great deal about him. He led American soldiers in winning our independence from Britain. He was the nation's first president. He adorns our dollar bill and a new dollar coin. But how many people know he was also a leading businessman, probably the No. 1 whiskey producer in all of colonial America?

Indeed, Washington was a prosperous farmer and entrepreneur throughout his life. "He thought like an American businessman," says Jim Rees, the executive director of Washington's Mount Vernon estate. "He was a true disciple of the free enterprise system, and he sensed that our new system of government would encourage people to think creatively, take chances and invest."

I like that attitude.

History of Power v. History of Cooperation

Stephen Davies notes that history is typically marked through time in terms of wars and revolutions, and much of history seems to emphasize government. He suggests we might draw history's timelines in terms of what is important for everyday life:

However, because this narrative is not spelled out and its key dates are mostly unknown, we are generally unaware of it. The process it traces and its benefits are taken for granted and assumed to be natural. If we do stop and think about it, however, we will see the world and the course of human history differently from how the narrative of power would have us see it. We should realize that what is important for the everyday life and hopes of ordinary people is not power but peaceful cooperation and exchange. Not everyone welcomes this. There are those who would decry increased affluence, regret the easier movement of people, and deplore cultural mixing and exchange. We should ignore them and reject their argument.

This is a very interesting idea. I do wonder what history's timelines would look like if we emphasized the development of economic prosperity, instead of the use of power by government. Perhaps this is done by economic historians, eh?

Politics in the Courts

Victoria Toensing offers mock indictments with respect to the Libby case in the Washington Post:

THIS GRAND JURY CHARGES PATRICK J. FITZERALD with ignoring the fact that there was no basis for a criminal investigation from the day he was appointed, with handling some witnesses with kid gloves and banging on others with a mallet, with engaging in past contretemps with certain individuals that might have influenced his pursuit of their liberty, and with misleading the public in a news conference because . . . well, just because.

She also offers indictments of: the CIA, Joe Wilson, Ari Fleischer, Richard Armitage, the U.S. Justice Department, and the media.

If you want to know how things work in our system of politics, then this is probably something worth reading. It seems that cases like this are designed to present a story to the rationally ignorant public of abuse of power that will be punished by legal means. But instead, if we look at the entire picture painted by this story, we seem to be seeing a picture that suggests someone is trying to use our court system for simple, self-interested political purposes (and maybe just self-agrandizement). We should probably try to keep political trials for the court of public opinion. At least, that is one lesson I think we can draw from this case (and I think there have been many other cases like this as well).

While Congress Was Voting

If you would like to add some perspective to your understanding of Congress and Iraq, then you might want to check out Mudville Gazette's update on events in Iraq.

Bosnia Lessons?

CHRISTIAN SCHWARZ-SCHILLING:

We live in an era where the mechanics of peacekeeping and nation-building are at the heart of geopolitical debate. While Afghanistan and Iraq dominate the headlines, the experience of Bosnia and Herzegovina continues to be illuminating.

A year ago, at the start of my mandate as the European Union's Special Representative and the international community's High Representative for Bosnia and Herzegovina, I believed that nation-building in this Balkan country had reached a watershed and that the "quasi-protectorate" was no longer viable. I argued, therefore, that more than a decade after the end of the war, it was time for the people of this country and their elected leaders to assume full responsibility for their own destiny. . . .

Yet the process of forming coalitions at the various levels of government has proceeded without international hand-holding. Electoral commitments bind the incoming local authorities to pursue pragmatic policies and prioritize economic growth.

I continue to believe in a policy of local ownership, but I also believe that the transition should take longer. There is a risk of importing instability from elsewhere in the region. And there is a risk of internal political paralysis. The local authorities need more time to adapt and the international community will have to show greater patience. It is therefore not yet time to give up the Bonn Powers.

But this extraordinary authority to impose laws and remove public officials does not provide long-term solutions. However, if held in reserve and used sparingly, it can still serve as a useful insurance policy against destabilization. This argument is gaining ground in the capitals that have to decide at the end of this month on the future of these powers and the Office I head. . . .

In charting the right course toward a viable and functional Bosnia and Herzegovina it has been necessary to differentiate between what works and what doesn't work. It has also been necessary to change a mindset, both in Bosnia and Herzegovina and in the international community. Promoting local ownership is neither easy nor risk-free, but it avoids short-term fixes in an effort to create real and durable stability. It can yield success in Bosnia and Herzegovina. And it might also prove effective elsewhere.

I have not paid much attention to Bosnia and Herzegovina, so I can't really specifically assess the analysis here. I suspect counseling patience in this region and in Afghanistan and Iraq is sound wisdom from his experience.

John Burns on Iraq

Hugh Hewitt had a very interesting interview with John Burns of the NY Times. Here is some of it:

HH: Mr. Burns, in reviewing the Charlie Rose interview, as well as the one you did with Bill Maher in March of 2006, I was struck by two statements. To Bill Maher, I’m paraphrasing, yes, the Americans made a whole bunch of mistakes in the occupation, but if we fail, it won’t be because of those mistakes, and to Charlie Rose, the statement that when Iraqis sit down and talk with you in calm situations, the vast majority of people still believe they are better off with Saddam, under Saddam. Nothing was possible, it was frozen. Those two statements are extraordinary. You don’t hear them very much. Can you expand on them?

JB: Yeah, I need to say something about opinion polling in Iraq, because opinion polls tend to tell you something different. But I think opinion polling in Iraq is extremely misleading, because opinion is intimidation led. It was under Saddam. If CNN posed a camera in the face of somebody on the street in Baghdad in the fall of 2002, when the war was looming, and they said are you with Saddam or are you with George Bush, well of course, 100% of all Iraqis who were asked that question said they were with Saddam. What else could they do? They didn’t…they were going to end up in Abu Ghraib on the end of a rope. Of course the situation changed somewhat, but any Iraqi who is asked now a question like do you regard American troops as occupation troops, do you want them out, is wise, given the fact that American troops may be in the neighborhood for 30 minutes, but the bad guys are in the neighborhood for 24 hours, it’s wise to give a heavily, carefully calibrated answer, which does nothing to upset the bad guys. So yes, I do believe, number one, that most Iraqis still believe that for all of the price they have paid, amidst all of this chaos, that the possibility of a different kind of future for the country that was opened by the arrival of American troops was net an advantage. Let’s look at what happened after the hanging of Saddam. There were protests, but they were not very widespread, they were not very protracted. Saddam had very little legacy left at the end. The problem was not Saddam. The problem is that the Sunni minority in Iraq has not reconciled to the loss of power. That explains a great deal about the war. It was a frozen society. It was an unbelievably brutal society. And most Iraqis, and this is beyond doubt, and I include in this Sunnis, yearned to be relieved of it. And when America did that for them, it was after many, many years of Iraqis attempting to overthrow Saddam, failing, and paying an incredible price for it. So I think that we’d have to remember that in making an assessment of what happened. As for what has happened since, and the American mistakes, when I said if it fails, it won’t be because of American mistakes, what did I mean by that? Of course, if there hadn’t been some of the mistakes that were made along the way, the situation might be somewhat better. But my sense of it is that if it fails, that history may say it was mission impossible from the beginning, which is to say that when you remove the carapace of terror that Saddam had imposed on that society, what was revealed underneath it was an extremely fractured society which had never resolved the question of power, political and economic power, and how it was going to be divided between the principal communities, mainly Sunni and Shiites. That’s the situation the United States inherited, it’s the situation which continues to fuel the violence there, and it may be that history will say that the china shop rule, the power rule, you break it, you own it, might have been well to consider beforehand, not because Iraqis didn’t want him overthrown, Saddam overthrown. They did want him, and there was scenes of liberation in the streets of Iraq afterward. But you know, this is an extremely complex, extremely violence-prone society, a society that has proven to be resistant to, not yet ready for, and maybe will not be ready for a very long time, for Jeffersonian democracy of the kind that the United States hopes to install there. We’ll have to see what history’s verdict is, but my sense is that Iraqis still, in the main, are happy at least that Saddam is gone, very unhappy about other things, but happy to see him gone.

I really enjoyed the interview. It seems to me we don't get very much of the sort of experienced analysis that Mr. Burns offered in this interview. We don't seem to hear such experienced analysis from most of the news and commentary industry, and we don't seem to get it from our elected leaders inside the Washington beltway.

Inequality of Patience

This is from a report in The Economist:

Five years later, Dr Reyes-Garcia and her colleagues came back again. They re-interviewed 100 of their volunteers (the other 51 were unavailable for one reason or another) and found that those who had shown most patience in the original experiment had also seen their incomes increase more than those of their less patient counterparts. The effect was relatively small—the incomes of the patient had grown 1% a year faster than those of the impatient. Over a lifetime, though, that adds up to a significant amount of inequality.

I don't think this is going to surprise very many economists. But, given the rhetoric of those in politics who make correcting inequalities one of their mantras, it may be a surprise to some people. When we think about public policy concerning inequality it is clear that we have to recognize that at least some inequality, and maybe a lot of inequality, is the result of different choices made by different people.

Freedom & Responsibility

Edmund Phelps explores differences in the economic dynamism of Europe and the United States:

It may be that the Continentals finding, over the 19th and early 20th century, that there was little opportunity or reward to exercise freedom and responsibility, learned not to care much about those values. Similarly, it may be that Americans, having assimilated large doses of freedom and initiative for generations, take those things for granted. That appears to be what Tocqueville thought: "The greater involvement of Americans in governing themselves, their relatively broad education and their wider equality of opportunity all encourage the emergence of the 'man of action' with the 'skill' to 'grasp the chance of the moment.'"

The entire piece is well worth reading. I want to note the emphasis on economic dynamism. I think it is important when thinking about economic prosperity to keep a truly dynamic perspective in mind. Prosperity is not just a matter of a sort of static working out of present conditions. Prosperity is truly dynamic, with feedbacks long into the future arising from conditions today. I think prosperity is emergent, not deterministic. I think this is why "large does of freedom and initiative for generations" seems to me to be right on target.

Economically Literate Politicians

Tory Newmyer has made a list of the 10 most economically literate members of Congress:

Senate: Bob Bennett (R-Utah), Kent Conrad (D-North Dakota), Chris Dodd (D-Connecticut), Judd Gregg (R-New Hampshire), Jon Kyl (R-Arizona)

House: John Boehner (R-Ohio), David Dreier (R-California), Barney Frank (D-Massachusetts), Paul Ryan (R-Wisconsin), John Spratt (D-South Carolina)

[Hat Tip: Greg Mankiw]