Posts Tagged ‘Environmentalism’

Remember the cluster-you-know-what in New Orleans following Hurricane Katrina? Corrupt and incompetent politicians in both the city and at the state level acted passively, assuming that Uncle Sam somehow should be responsible for dealing with the storm.

And we’ve seen similar behavior from other state and local politicians before, during, and after other natural disasters.

The obvious lesson to be learned is that the federal government shouldn’t have any responsibility for dealing with natural disasters. All that does it create a wasteful layer of bureaucracy, while also inculcating a sense of learned helplessness on the part of state and local officials who should be responsible for dealing with storms and other local crises.

In other words, the answer is federalism. State and local governments should be solely responsible for state and local issues.

But not just because of some abstract principle. There’s a very strong practical argument that you get more sensible decisions when the public sector is limited (as Mark Steyn humorously explained) and there is clear responsibility and accountability at various levels of government.

And this is why the biggest lesson from the scandal of tainted water in Flint, Michigan, is that local politicians and bureaucrats should not be able to shift the blame either to the state or federal government. Which was my main point in this interview.

To be sure, it is outrageous that state and federal bureaucrats knew about the problem and didn’t make it public, so I surely don’t object to officials in Lansing and Washington getting fired.

But I do object to the political finger pointing, with Democrats trying to blame the Republican Governor and Republicans trying to blame the Democratic President.

Nope, the problem is an incompetent local government that failed to fulfill a core responsibility.

The Wall Street Journal has the same perspective, opining that the mess in Flint is a failure of government.

…the real Flint story is a cascade of government failure, including the Environmental Protection Agency.

More specifically (and as I noted in the interview), we have a local government that became a fiefdom for a self-serving bureaucracy that was more concerned with its privileged status than in providing core government services.

…after decades of misrule: More than 40% of residents live in poverty; the population has fallen by half since the 1960s to about 100,000. Bloated pensions and retiree health care gobble up about 33 cents of every dollar in the general fund.

And the WSJ editorial also castigated the state and federal bureaucrats that wrote memos rather than warning citizens.

MDEQ and the EPA were chatting about Flint’s system as early as February. MDEQ said it wanted to test the water more before deciding on corrosion controls, though it isn’t clear that federal law allows this. …the region’s top EPA official, political appointee Susan Hedman, responded… “When the report has been revised and fully vetted by EPA management, the findings and recommendations will be shared with the City and MDEQ and MDEQ will be responsible for following up with the City.” She also noted over email that it’s “a preliminary draft” and it’d be “premature to draw any conclusions.” The EPA did not notify the public.

The lesson is that adding state and federal bureaucracy impedes effective and competent local government.

The broader lesson is that ladling on layers of bureaucracy doesn’t result in better oversight and safety. It sometimes lets agencies shirk responsibility for the basic public services like clean water that government is responsible for providing.

Here’s the bottom line.

Federalism is about getting better government by creating clear lines of responsibility and accountability in an environment that allows state and local governments to learn from each other on best practices.

The current system blurs responsibility and accountability, by contrast, while also imposing needless expense and bureaucracy. And we get Katrina and Flint with this dysfunctional approach.

So whether it’s Medicaid, education, transportation, welfare, or disasters, involvement from Washington makes things worse rather than better.

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When I first read about armed protesters taking over a federal building in Oregon, I thought some nutjobs were about to cause some real trouble. Was this a right-wing version of the loons from the Occupy Wall Street movement, only with guns?

Then I learned that the “federal building” was nothing more than a remote and unoccupied structure in a wildlife refuge, making this story a molehill rather than a mountain.

Now I’m learning that the ostensible nutjobs have some very genuine grievances, specifically about the way the Hammond family has been viciously mistreated by the federal government.

David French, an attorney and veteran, has a column in National Review that looks at why folks in Oregon are upset with Washington.

…what if they’re right? What if the government viciously and unjustly prosecuted a rancher family so as to drive them from their land? Then protest, including civil disobedience, would be not just understandable but moral, and maybe even necessary. …Read the court documents in the case that triggered the protest… What emerges is a picture of a federal agency that will use any means necessary, including abusing federal anti-terrorism statutes, to increase government landholdings.

Here’s his summary of the situation.

The story…begins…with the creation and expansion of the Malheur National Wildlife Refuge, a tract of federal land…The federal government has since expanded…in part by buying adjacent private land. Protesters allege that when private landowners refused to sell, the federal government got aggressive, diverting water during the 1980s into the “rising Malheur lakes.” Eventually, the lakes flooded “homes, corrals, barns, and graze-land.” Ranchers who were “broke and destroyed” then “begged” the government to buy their “useless ranches.” …the Hammonds were among the few private landowners who remained adjacent to the Refuge. …the government then began a campaign of harassment designed to force the family to sell its land, a beginning with barricaded roads and arbitrarily revoked grazing permits and culminating in an absurd anti-terrorism prosecution based largely on two “arsons” that began on private land but spread to the Refuge.

Arson sounds serious, but French explains that it’s not what city folks assume when they hear that word.

While “arsons” might sound suspicious to urban ears, anyone familiar with land management…knows that land must sometime be burned to stop the spread of invasive species and prevent or fight destructive wildfires. Indeed, the federal government frequently starts its own fires.

Here’s the part that’s most disturbing. David explains how the federal government used a sledgehammer to go after a fly.

In 2010 — almost nine years after the 2001 burn — the government filed a 19-count indictment against the Hammonds that included charges under the Federal Anti-terrorism and Effective Death Penalty Act…the Hammonds and the prosecution reached a plea agreement in which the Hammonds agreed to waive their appeal rights and accept the jury’s verdict. It was their understanding that the plea agreement would end the case. At sentencing, the trial court refused to apply the mandatory-minimum sentence, holding that five years in prison would be “grossly disproportionate to the severity of the offenses”… The federal government, however, was not content to let the matter rest. Despite the absence of any meaningful damage to federal land, the U.S. Attorney appealed the trial judge’s sentencing decision… the Ninth Circuit Court of Appeals…ruled against… The Hammonds were ordered back to prison.

And here’s his bottom line.

There’s a clear argument that the government engaged in an overzealous, vindictive prosecution here. By no stretch of the imagination were the Hammonds terrorists, yet they were prosecuted under an anti-terrorism statute. …To the outside observer, it appears the government has attempted to crush private homeowners and destroy their livelihood in a quest for even more land. If that’s the case, civil disobedience is a valuable course of action. …I sympathize with the ranchers’ fury, and I’m moved by the Hammonds’ plight. …now they’re off to prison once again — not because they had to go or because they harmed any other person but because the federal government has pursued them like a pack of wolves.

I would have said a pack of hyenas, but that’s a rhetorical difference.

What matters is that the federal government has behaved reprehensibly.

The Wall Street Journal also opined about the standoff, citing the federal government’s brutish efforts to grab private land.

…armed occupation of federal buildings is inexcusable, but so are federal land-management abuses and prosecutorial overreach. …The drama is bringing attention to legitimate grievances, especially the appalling federal treatment of the Hammond family. …The government has…been on a voracious land-and-water grab, coercing the area’s once-thriving ranchers to sell. The feds have revoked dozens of grazing permits and raised the price of the few it issues. It has mismanaged the area’s water, allowing ranchlands to flood. It has harassed landowners with regulatory actions that raise the cost of ranching, then has bought out private landowners to more than double the refuge’s size. …Many in rural Oregon view this as a government vendetta. …The ideology of “national” land has become the club to punish private landowners who are the best source of economic stability and conservation. The Bundy occupation of federal land can’t be tolerated, but the growing Western opposition to government harassment of private landowners ought to be a source of political concern.


By the way, this doesn’t mean that the protesters automatically are right about being victimized. Yes, in some cases, federal bureaucrats are grossly mistreating folks. But in other cases, ranchers may be fleecing taxpayers because of implicit subsidies for things like grazing rights on federal land and water rights.

Moreover, according to CNN, the Bundy family (which is leading the sit-in at the wildlife refuge) has no problem mooching off taxpayers.

Ammon Bundy, a leader of the armed protesters who took over a federal building in Oregon, and his family are…not opposed to government and said that taking a six-figure loan from the Small Business Administration doesn’t conflict with his political philosophy.

But even if there are no pure good guys in this story, there is a pure solution.

And that’s to shrink the federal government’s ownership of land. As you can see from this Wikipedia map, Uncle Sam owns most of the land in America’s western states.

This makes no sense. It means potentially valuable land is locked up, which undermines the economy’s growth and efficiency.

Why not auction up a huge portion of that land so it’s in private hands where there will be proper incentives for wise stewardship (including conservation)?

And if politicians decide that some of the land should be set aside for parks, that should be the result of open and honest deliberation. Just as decisions to obtain private land (for genuine public purposes, not Kelo-style cronyism) should be legitimate and include proper compensation.

P.S. This story reminds me that I need to create a special page for “Victims of Government Thuggery” to augment the Bureaucrat Hall of Fame and Moocher Hall of Fame.

The Hammonds would be charter members.

It would also include people like Andy Johnson, Anthony Smelley, Charlie Engle, Tammy Cooper, Nancy Black, Russ Caswell, Jacques Wajsfelner, Jeff Councelller, Eric Garner, Martha Boneta, Carole Hinders, Salvatore Culosi, and James Lieto, as well as the Sierra Pacific Company and the entire Meitev family.

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Since it’s basically a way of protecting property rights, environmental protection is a legitimate function of government.

That’s the easy part. It gets a lot harder when calculating costs and benefits.

Everyone surely agrees that a chemical company shouldn’t be able to dump toxic waste in a town’s reservoir because the costs would out-weigh the benefits. And presumably everyone also would concur that banning private automobiles would be crazy because this would be another example of costs being greater than benefits.

But there’s a lot of stuff in between those extreme examples where agreement is elusive.

And I’ll admit my bias. I don’t trust the modern environmental movement, particularly the climate alarmists. There are just too many cases where green advocates act like their real goal is statism.

Moreover, the hypocrisy of some environmental dilettantes is downright staggering.

And they also seem to be waging a regulatory war on modern life.

I’m giving all this background to create context for an article I want to discuss.

John Tierney, a columnist for the New York Times. has a piece that debunks recycling. He starts by looking back 20 years.

As you sort everything into the right bins, you probably assume that recycling is helping your community and protecting the environment. But is it? Are you in fact wasting your time? In 1996, …I presented plenty of evidence that recycling was costly and ineffectual, but its defenders said that…the modern recycling movement had really just begun just a few years earlier, they predicted it would flourish as the industry matured and the public learned how to recycle properly.

So what’s happened over the years? Has recycling become more feasible and rational?

Not exactly. From a cost-benefit perspective, it’s a scam. It simply doesn’t make sense.

…when it comes to the bottom line, both economically and environmentally, not much has changed at all. Despite decades of exhortations and mandates, it’s still typically more expensive for municipalities to recycle household waste than to send it to a landfill. …the national rate of recycling has stagnated in recent years. …The future for recycling looks even worse. As cities move beyond recycling paper and metals, and into glass, food scraps and assorted plastics, the costs rise sharply while the environmental benefits decline and sometimes vanish. …“Trying to turn garbage into gold costs a lot more than expected…”

Tierney specifically addresses the issue of greenhouse gasses.

…well-informed and educated people have no idea of the relative costs and benefits. …Here’s some perspective: To offset the greenhouse impact of one passenger’s round-trip flight between New York and London, you’d have to recycle roughly 40,000 plastic bottles, assuming you fly coach. …if you wash plastic in water that was heated by coal-derived electricity, then the net effect of your recycling could be more carbon in the atmosphere.

A traditional argument for mandated recycling is that landfill space is vanishing.

But that’s always been bunk.

One of the original goals of the recycling movement was to avert a supposed crisis because there was no room left in the nation’s landfills. But that media-inspired fear was never realistic in a country with so much open space. In reporting the 1996 article I found that all the trash generated by Americans for the next 1,000 years would fit on one-tenth of 1 percent of the land available for grazing. And that tiny amount of land wouldn’t be lost forever, because landfills are typically covered with grass and converted to parkland… Though most cities shun landfills, they have been welcomed in rural communities that reap large economic benefits (and have plenty of greenery to buffer residents from the sights and smells).

Moreover, incinerators are another practical option.

Modern incinerators, while politically unpopular in the United States, release so few pollutants that they’ve been widely accepted in the eco-conscious countries of Northern Europe and Japan for generating clean energy.

The bottom line is that recycling is an expensive feel-good gesture by guilt-ridden rich people.

In New York City, the net cost of recycling a ton of trash is now $300 more than it would cost to bury the trash instead. That adds up to millions of extra dollars per year — about half the budget of the parks department — that New Yorkers are spending for the privilege of recycling. That money could buy far more valuable benefits, including more significant reductions in greenhouse emissions. …why do so many public officials keep vowing to do more of it? Special-interest politics is one reason — pressure from green groups — but it’s also because recycling intuitively appeals to many voters: It makes people feel virtuous, especially affluent people who feel guilty about their enormous environmental footprint.

I don’t have a strong opinion on whether rich people should feel guilty about their resource consumption.

But I definitely get agitated when they try to atone for their guilt by foisting costly and ineffective policies on other people.

P.S. That’s why I consider myself to be pro-environment while also being a skeptic of environmentalists. Simply stated, too many of these people are nuts.

P.P.S. Some environmental policies lead to disgusting examples of government thuggery (some of which, fortunately, are not successful).

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When the International Monetary Fund endorsed a giant energy tax on the American economy, I was not happy.

And not just because the tax hike would have been more than $5,000 for an average family of four. I also was agitated by the hypocrisy.

…these bureaucrats get extremely generous tax-free salaries, yet they apparently don’t see any hypocrisy in recommending huge tax increases for the peasantry.

And when the similarly un-taxed bureaucrats at the Paris-based Organization for Economic Cooperation and Development added their support for a big tax hike on energy, I was irked for that reason, and also because they wanted to use much of the money to make government bigger.

…the OECD is basically saying is that an energy tax will be very painful for the poor. But rather than conclude that the tax is therefore undesirable, they instead are urging that the new tax be accompanied by new spending.

Moreover, I also criticized Barack Obama’s former top economist for endorsing a big energy tax.

So does this mean I’m against energy taxation? The answer is yes, but with a big caveat. I want the government to collect tax (hopefully a small amount because we have a small government) in the way that does the least amount of damage to the American economy.

So while my instinct is to oppose any proposed tax, I’m theoretically open to the notion that we can make the tax system less destructive by replacing very bad taxes with taxes that aren’t as bad.

And that’s what some pro-market economists want to do with an energy tax. Here’s some of what Greg Mankiw wrote for the New York Times.

Policy wonks like me have long argued that the best way to curb carbon emissions is to put a price on carbon. The cap-and-trade system President Obama advocates is one way to do that. A more direct and less bureaucratic way is to tax carbon. When polled, economists overwhelmingly support the idea. …It encourages people to buy more fuel-efficient cars, form car pools with their neighbors, use more public transportation, live closer to work and turn down their thermostats. A regulatory system that tried to achieve all this would be heavy-handed and less effective.

In other words, Mankiw argues that not only could the revenue be used to finance equal-sized tax cuts, but the carbon tax would end any need for destructive regulations.

Which creates a win-win scenario, he argues, citing British Columbia as an example.

Bob Inglis, the former Republican congressman from South Carolina, heads the Energy and Enterprise Initiative at George Mason University A recent winner of the John F. Kennedy Profile in Courage Award, which is given to public officials, he has been pushing for climate change solutions that are consistent with free enterprise and limited government. Environmentalists in the United States would do well to look north at the successes achieved in a Canadian province. In 2008, British Columbia introduced a revenue-neutral carbon tax similar to that being proposed for Washington. The results of the policy have been what advocates promised. The use of fossil fuels in British Columbia has fallen compared with the rest of Canada. But economic growth has not suffered.

Professor Mankiw makes some reasonable points, but now let’s get the other side.

Three of my colleagues at the Cato Institute have just produced a working paper on carbon taxation. They directly address the claims of pro-market advocates of energy taxation.

Within conservative and libertarian circles, a small but vocal group of academics, analysts, and political officials are claiming that a revenue‐neutral carbon tax swap could even deliver a “double dividend”—meaning that the conventional economy would be spurred in addition to any climate benefits. The present study details several serious problems with these claims.

Much of the debate revolves around scientific issues such as the potential long-run harm of carbon emissions.

In the policy debate over carbon taxes, a key concept is the “social cost of carbon,” which is defined as the (present value of) future damages caused by emitting an additional ton of carbon dioxide. …the computer simulations used to generate SCC estimates are largely arbitrary, with plausible adjustments in parameters—such as the discount rate—causing the estimate to shift by at least an order of magnitude. Indeed, MIT economist Robert Pindyck considers the whole process so fraught with unwarranted precision that he has called such computer simulations “close to useless” for guiding policy.

Models about climate change also play a big role.

Additionally, we show some rather stark evidence that the family of models used by the U.N.’s Intergovernmental Panel on Climate Change (IPCC) are experiencing a profound failure that greatly reduces their forecast utility.

As well as the use of cost-benefit analysis.

…the U.N.’s own report shows that aggressive emission cutbacks—even if achieved through an “efficient” carbon tax—would probably cause more harm than good.

I’m not overly competent to discuss the issues listed above.

But the debate also revolves around what happens with the revenue generated by a carbon tax. For instance, is it used to lower other taxes? Or does it get diverted to fund bigger government?

The Cato authors argue that carbon taxes can be just as damaging – and maybe even more damaging – than existing taxes on labor and capital. And they also fear that revenues from a carbon tax would be used to increase the burden of government spending.

…carbon taxes cause more economic damage than generic taxes on labor or capital, so that in general even a revenue‐ neutral carbon tax swap will probably reduce conventional GDP growth. (The driver of this result is that carbon taxes fall on narrower segments of the economy, and thus to raise a given amount of revenue require a higher tax rate.) Furthermore, in the real world at least some of the new carbon tax receipts would probably be devoted to higher spending (on “green investments”) and lump‐sum transfers to poorer citizens to help offset the impact of higher energy prices. Thus in practice the economic drag of a new carbon tax could be far worse than the idealized revenue‐ neutral simulations depict.

I have mixed feelings about the above passages.

On a per-dollar-raised basis, my gut instinct is that a carbon tax does less damage than revenue sources such as the corporate income tax. So you theoretically would get more growth with a revenue-neutral swap.

But my colleagues are probably right that a carbon tax is more damaging than other taxes, such as the payroll tax (which, after all, is a comparatively less-destructive flat tax on labor income).

Indeed, this is what we see in some of the evidence they cite in their study. You only get better economic performance if carbon tax revenue is used to lower the tax burden on capital.

In any event, the most persuasive argument against the carbon tax is that a big chunk of the new revenue would probably be used to make government even bigger. And this is why I argued back in June that supporters of limited government should reject the siren song of carbon taxation.

Last but not least, I should point out that the evidence from British Columbia is not very persuasive according to the authors of the Cato study.

…in British Columbia—touted as the world’s finest example of a carbon tax—the experience has been underwhelming. After an initial (but temporary) drop, the B.C. carbon tax has not yielded significant reductions in gasoline purchases, and it has arguably reduced the B.C. economy’s performance relative to the rest of Canada.

Now we’re back in an area where I’m unable to provide helpful commentary. Other than a one-time analysis of fiscal policy in Alberta, I’ve never delved into the economic performance and competitiveness of Canadian provinces, so I’ll resist the temptation to make any sweeping statements.

Returning to the big issue, my bottom line is that a carbon tax might be a worthwhile endeavor if Professor Mankiw somehow became economic czar and was allowed to impose policies that never could be altered.

In that scenario, I have confidence that we would get a pro-growth revenue-neutral swap. Which means the negative impact of a carbon tax would be more than offset by the pro-growth effect of eliminating or permanently reducing other taxes.

Unfortunately, we don’t have this scenario in the real world. Instead, I fear that well-meaning proponents of a carbon tax are unwittingly delivering a new source of revenue to a political class in Washington that wants to finance bigger government.

P.S. This is the same reason why I’m so strongly opposed to the value-added tax even though it theoretically doesn’t do as much damage – per dollar collected – as our onerous income tax. Simply stated, I don’t trust politicians to behave honorably if they get a new source of revenue.

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When writing about the burden of regulation, I often share big numbers about aggregate cost, job losses, time wasted, and foregone growth.

But I sometimes wonder if such data is effective in the battle for good policy.

Maybe it’s better, at least in some cases, to focus on regulations that affect quality of life for regular people. Lots of ordinary citizens, for instance, are irked that they’re now forced to use inferior light bulbs, substandard toilets, and inadequate washing machines because of regulatory silliness from Washington.

And it looks like we’ll now be forced to use dishwashers that don’t clean dishes thanks to proposed regulations that will reduce water use (which is in addition to a 2012 regulation that already restricted water use).

The Hill reports on the Nanny State’s latest salvo in the war against modern civilization.

The Association of Home Appliance Manufacturers is accusing the Department of Energy (DOE) of a politically motivated drive to increase dishwasher efficiency standards, which are so bad that they would cause consumers to re-wash dishes, erasing any efficiency gains. Rob McAver, the group’s head lobbyist, said regulators are going too far and the new rules will allow only 3.1 gallons to be used to wash each load of dishes. …They then ran standard tests with food stuck to dishes. “They found some stuff that was pretty disgusting,” McAver said. …“The poor performance that would result would totally undercut and go backwards in terms of energy and water use, because of the need for running the dishwasher again, or pre-rinsing or hand-washing, which uses a lot of water,” he said.

Great, another bone-headed step by the government that will make life less enjoyable.

I’m already one of those people who rinse my dishes before putting them in the dishwasher because I hate the idea that they won’t be fully clean afterwards.

So I can only imagine how bad it will be if this absurd example of red tape is imposed and I have to buy a new dishwasher.

I guess I’ll just keep my fingers crossed that my current dishwasher doesn’t break down.

Especially since the rules make new dishwashers more expensive.

Ernest Istook, former Republican congressman from Oklahoma, wrote in a Washington Times piece that complying with the 2012 rule, based on DOE estimates, added roughly $44 to the cost of each machine. “Now their 2015 proposal will add another $99 to the price tag, even by DOE’s own admission,” he wrote.

Julie Borowski has the right assessment. Her column for Freedom Works is from 2012, but it’s very appropriate still today.

Are you disappointed in every shower head that you purchase? Does your toilet have trouble flushing? Have you noticed that your dishes are still dirty after the dishwasher cycle is completed? …Some of us may be quick to blame the manufacturer of these home appliances. But the manufacturers are just abiding by the costly regulations by the Environmental Protection Agency (EPA) and the Department of Energy.

What’s really frustrating is that these regulations reduce the quality of life without even reducing water usage.

…it has only led to people hacking their shower heads to remove the intrusion that is blocking water flow in order to have a more relaxing shower that actually gets them clean. There is no proof that the water restrictions have actually saved water because many people just end up taking longer showers than they otherwise would.

Amen. Every so often I wind up at a hotel with restricted-flow showerheads and it’s a hassle because I probably spend twice as long in the shower.

Not to mention problems government has created elsewhere in bathrooms.

…water restrictions are also the reason that our toilets have trouble flushing. Many of us have become accustomed to flushing the toilet multiple times before the toilet bowl is clear. The 1992 Energy Policy Act states that all toilets sold in the United States use no more than 1.6 gallons of water per flush. These water restrictions are the reason why we have to use plungers far more often than we used to.

I won’t torment readers with a TMI moment, but I will say that I now routinely flush at the halfway point when seated on a toilet. And even that doesn’t necessarily preclude a third flush at the end of the process.

The only good news is that this gives me a daily reminder that government has far too much power to micro-manage our lives.

Speaking of excessive government, here’s another example of the regulatory state run amok.

Perhaps you’ve heard of the federal milk police? Well, now we’ll have the federal pizza police, as explained by The Manhattan Institute.

Pizza makers could face fines and prison time under a new Food and Drug Administration rule for failing to provide calorie counts for their billions of combinations of pizza orders. …FDA’s menu labeling rule will go into effect on December 1st, 2016… If a company does not perfectly comply with the mandate, food may be rendered “misbranded” under the Federal Food, Drug, and Cosmetic Act, a violation that carries criminal penalties. Failure to comply with the regulation could lead to government seizure of food, a maximum $1,000 fine, and a one-year prison sentence. …Revising systems under strict compliance with the regulation’s guidelines is expected to cost Domino’s $1,600 to $4,700 per restaurant annually. In general, the rule is expected to cost businesses $537 million, losses that necessarily must be passed on to consumers in the form of higher prices.

And I doubt anyone will be surprised to learn that all this coercion and red tape will have no positive effect.

Several studies on the effectiveness of calorie displays suggest the mandate will have little to no effect on the public’s choices. In one study on menu-labeling in New York City, Brian Elbel, a professor at New York University, found that only 28 percent of people who saw calorie labels said that the information influenced their choices. There was no statistically significant change in calories purchased. In another study, Lisa Harnack of the University of Minnesota examined whether knowledge about calorie counts of menu items would influence how much a person ate, even if the information did not change ordering habits. A lab study revealed that, overall, consumers did not change how much they ate after receiving information about their food’s caloric content.

Which is why, when writing about this topic last year, I predicted “If this regulation is implemented, it will have zero measurable impact on American waistlines.

P.S. Keep in mind we already have the federal bagpipe police, the federal pond police, and the federal don’t-whistle-at-whales police.

P.P.S. As I repeatedly warn, if the answer is more government, someone’s asked a very silly question.

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Explaining why statists are wrong about policy is a necessary part of what I do, but it sometimes can get a bit predictable. So I’ve decided to periodically pick fights with people who generally are on the right side.

By the way, I’m definitely not talking about Republicans, who oftentimes are among the most worst people in Washington.

I’m talking about friendly fights with other policy wonks.

My first friendly fight featured my complaints about an anti-flat tax column by Reihan Salam of National Review, mostly because I think he got some economic analysis wrong even though I largely agreed with his political analysis.

My second friendly fight featured my grousing about the fiscal plan put forth by the American Enterprise Institute, which openly proposed that the tax burden should increase to enable a larger burden of government spending.

Time for a third fight. My former Cato colleague Jerry Taylor is now head of the Niskanen Center. He wrote a paper in March making “The Conservative Case for a Carbon Tax.” Here’s some of what he wrote.

…conservatives should say “yes” to a revenue-neutral carbon tax …so long as the tax displaces EPA regulation of greenhouse gas emissions and eliminates a host of tax preferences provided to green energy producers. If federal and state governments are going to act to reduce greenhouse gas emissions, better that they do so at the least economic cost possible. A carbon tax…promises to do that by leaving the decision about where, when, and how to reduce greenhouse gas emissions to market actors (via price signals) rather than to regulators (via administrative orders). A carbon tax would also produce revenue that can be used to provide offsetting tax cuts. …Suggestions have been made to use those revenues to offset cuts in the corporate income tax, the capital gain s tax, personal income taxes, payroll taxes, and sales taxes. If the carbon tax is less economically harmful than the tax it displaces, a revenue neutral carbon tax is worth embracing even if we leave aside the environmental benefits. …Morris calculates that her carbon tax would bring in about $88 billion in the first year,rising to $200 billion a year after 20 years

Everything Jerry wrote is theoretically reasonable, particularly since he is proposing a carbon tax as a replacement for counterproductive regulation and he also says the tax revenue can be used to lower other tax burdens.

But theoretically reasonable is not the same as practical policy or good policy. What if politicians pull a bait and switch, imposing a carbon tax but then not following through on the deal?

Jerry addresses these concerns.

Many conservatives resist carbon taxes because they believe that increases in federal revenues will increase the size of government. But virtually every proposed carbon tax put on the political table includes offsetting tax cuts to ensure revenue neutrality. Revenue neutral carbon taxes will not increase the size of the federal treasury. …The true definition of government’s size is not how many dollars the treasury extracts from the economy. It is best measured by how many resources are reallocated as a consequence of government. To the extent that carbon taxes are more efficient than command-and-control regulation at achieving the aims of greenhouse gas emission constraint, a carbon tax would serve to decrease the size of government relative to the status quo.

Those are fair points, and I particularly agree that fiscal policy is an incomplete measure of the burden of government.

So Jerry is right that a particular regulation might be more damaging that a particular tax.

Jerry continues to address concerns on the right about a carbon tax.

Many conservatives have argued that no matter how compelling the case for a carbon tax might be, it will be rendered intolerable by the time it emerges from the legislature. Politics, not economics, will dictate the tax rate. Exceptions and favors for politically popular industries will litter the code. And despite promises to the contrary, the inefficient regulations will never die. Economist Tom Tietenberg of Colby College examined the literature pertaining to the 15 major pollution tax and fee programs instituted worldwide and found that while concerns about the translating economic theory into political practice are not baseless, they are overstated.

I find Jerry to be less persuasive on this front. I’m not sure foreign evidence tells us much, in part because almost all other nations have parliamentary forms of government where the party in power, by definition, exercises both executive and legislative control in a system of strong party discipline.

Our separation-of-powers system, by contrast, necessarily requires consensus among Senators, Representatives, and the White House, further complicated by the necessity of moving legislation through committees. All of this results in the kinds of compromises and horse trading that can take clean theoretical concepts and turn them into Byzantine reality.

Heck, just consider the internal revenue code, which has become a nightmare of complexity.

But that’s not my main concern with Jerry’s proposed carbon tax.

My real objection is that I have zero trust that Washington won’t use the new tax as a tool for expanding the size and cost of government.

This isn’t just idle speculation or misplaced paranoia. The crowd in Washington is salivating for a new source of revenue. The Wall Street Journal opines on this development, citing the soon-to-be leader of Senate Democrats.

Chuck Schumer is…already planning for 2017…predicting that the political class might join hands and pass a carbon tax. “…many of our Republican friends will say we’ve been starving the government for revenues,” Mr. Schumer told an environmental event on Capitol Hill according to the Politico website, “but many of them will not be for raising [income tax] rates.” So Republicans and Democrats will both be hunting for revenues and “you might get a compromise” over a new carbon tax, he added.

The editors at the WSJ are not sold on this idea, to put it mildly.

It’s amusing that Sen. Schumer thinks a federal government that spends nearly $4 trillion and 21% of national output a year is “starving” for anything. …Our view of a carbon tax is that it might be acceptable as part of a tax reform that eliminated—entirely—some current revenue source such as the payroll or corporate income tax. But we don’t expect to live long enough to see that day. A slippery compromise would trade a new carbon tax for a reduction in some tax rates, but the politicians would soon return to raising those rates again. The U.S. would be left with the current tax burden plus the new carbon tax—and a permanently larger government.

The folks at the WSJ hit the nail on the head. More spending is the most realistic outcome if politicians get a new tax, whether it’s an energy tax, a value-added tax, a wealth tax, or a financial transactions tax.

And Jerry actually confirms my fears. Just yesterday, he posted some comments on the Wall Street Journal’s editorial, and what he wrote perfectly captures why advocates of smaller government are so resistant to a carbon tax.

He went from advocating a revenue-neutral (and regulation-eliminating) carbon tax in March to now saying it’s okay to have a net increase in the tax burden!

…there is a very strong, conservative case for doing exactly what Sen. Schumer proposed this week (if the revenues are used to reduce the deficit, as Sen. Schumer implied, rather than to fund more spending).

And keep in mind that Sen. Schumer doubtlessly intends to spend every penny (and more) that is generated by this new tax, so the real-world outcome would be even worse.

By the way, Jerry then ventures into the world of fiscal policy, asserting that there’s no hope of fiscal restraint and that Republicans should simply figure out ways to increase the tax burden.

This may be unpopular with Republicans at the moment, but sooner or later, bills must be paid. And there’s no chance whatsoever that those bills are going to be paid by savings gained from budget cuts alone. If a carbon tax is not going to provide the necessary revenues, then what do Republicans propose as a source of revenue in its stead?

Wow, there’s a lot wrong in those three sentences.

But I’ll just focus on a few points.

But you don’t have to believe me. Just read what leftists have said they want to do with the money from a new energy tax.

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When writing about the Golden State, I generally focus on fiscal policy. After all, California is trying to become the France of America by imposing punitive tax rates and continuously expanding the burden of government spending.

And since this leads to the loss of jobs and competitiveness, California offers a helpful reminder that bad policy has consequences.

But let’s now look at another example of misguided policy in California. The state is suffering a drought, which obviously isn’t the fault of state lawmakers, but policies imposed by those lawmakers are turning the drought from a problem to a crisis.

The Wall Street Journal opines on the issue.

The liberals who run California have long purported that their green policies are a free (organic) lunch, but the bills are coming due. Lo, Governor Jerry Brown has mandated a 25% statewide reduction in water use. Consider this rationing a surcharge for decades of environmental excess. …During the last two winters amid the drought, regulators let more than 2.6 million acre-feet out into the bay. The reason: California lacked storage capacity north of the delta, and environmental rules restrict water pumping to reservoirs south. …no major water infrastructure project has been completed in California since the 1960s. Money is not the obstacle. Since 2000 voters have approved five bonds authorizing $22 billion in spending for water improvements. Environmental projects have been the biggest winners. …studies show that mandates and subsidies for low-flow appliances like California’s don’t work because people respond by changing their behavior (e.g., taking longer showers). Despite the diminishing returns, Mr. Brown has ordered more spending on water efficiency.

In other words, the government-run system for collecting and distributing water is suffering because of a failure to generate enough supply and because non-price mechanisms aren’t very effective at limiting demand.

So what would work?

The WSJ suggests market-based pricing.

And the good news is that it is a small part of the Governor’s new proposal.

The most proven strategy to reduce water consumption is market pricing with water rates increasing based on household use. …To his credit, the Governor has instructed the State Water Resources Control Board to develop pricing mechanisms… Not even Gov. Brown can make it rain, but he and other politicians can stop compounding the damage by putting water storage, transportation and market pricing above environmental obsessions.

By the way, it’s worth noting that market-based pricing is actually the most effective way of achieving the environmental goal of conservation.

So if you want more water for fish, make sure it’s priced appropriately.

To elaborate on this topic, Megan McArdle, writing for Bloomberg, explains that subsidized water encourages overuse.

California’s problem is not that it doesn’t have enough water to support its population. Rather, the problem is that its population uses more water than it has to. And the reason people do this is that water in California is seriously underpriced… While the new emergency rules do include provisions for local utilities to raise rates, that would still leave water in the state ludicrously mispriced. …the average household in San Diego pays less than 80 cents a day for the 150 gallons of water it uses. …Artificially cheap water encourages people to install lush, green lawns that need lots of watering instead of native plants more appropriate to the local climate. It means they don’t even look for information about the water efficiency of their fixtures and appliances. They take long showers and let the tap run while they’re on the phone with Mom. In a thousand ways, it creates demand far in excess of supply.

Megan agrees with the WSJ that market-based prices are far more effective in controlling demand than non-market restrictions and mandates.

Having artificially goosed demand, the government then tries to curb it by mandating efficiency levels and outlawing water-hogging landscaping. Unfortunately, this doesn’t work nearly as well as pricing water properly, then letting people figure out how they want to conserve it.

And while it may be a challenge to figure out the “market rate” when water is being provided by a government monopoly, it’s safe to say that this rate is a lot higher than it is today.

…we could set some minimum amount of water that would be sold at a very cheap rate, with any excess charged at market rates to reflect the actual supply and the cost of providing it. This would be hugely unpopular with homeowners who have big lawns as well as with farmers.

There’s a semi-famous saying that “if you want less of something, tax it; if you want more of something, subsidize it.”

I don’t know if somebody famous uttered that phrase, or something like it, but the point is correct.

The bottom line is that subsidies encourage over-utilization, inefficiency, and insensitivity to price. That’s true for health care and higher education, just as it’s true for water.

Now let’s look at a video that helps illustrate the damaging impact of subsidies.

It’s not completely applicable because water isn’t sold by profit-making companies, but this video from Marginal Revolution explains how consumers will demand a much greater quantity of a product when the price is artificially low because of subsidies.

Indeed, the video even uses California water as an example.

P.S. The MRU videos are superb tutorials. In prior posts, I’ve shared videos explaining how taxes destroy economic value and highlighting the valuable role of market-based prices, and they’re all worth a few minutes of your time.

P.P.S. Shifting from substance to California-specific humor, this Chuck Asay cartoon speculates on how future archaeologists will view California. This Michael Ramirez cartoon looks at the impact of the state’s class-warfare tax policy. And this joke about Texas, California, and a coyote is among my most-viewed blog posts.

P.P.P.S. Paul Krugman has tried to defend California’s economic performance, which has made him an easy target. I debunked him earlier this year, and I also linked to a superb Kevin Williamson takedown of Krugman at the bottom of this post.

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