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Posts Tagged ‘Environmentalism’

I’m not a big fan of the International Monetary Fund for the simple reason that the international bureaucracy undermines global prosperity by pushing for higher taxes, while also exacerbating moral hazard by providing bailouts to rich investors who foolishly lend money to dodgy and corrupt governments.

Six years ago, I complained that the bureaucrats wanted a giant energy tax, which would have diverted more than $5,000 from an average family’s budget.

That didn’t go anywhere, but the IMF hasn’t given up. Indeed, they’re now floating a new proposal for an enormous global energy tax.

To give credit to the IMF, the bureaucrats don’t mince words or disguise their agenda. The openly stated goal is to impose a giant tax increase.

Domestic policies are thus needed to give people and businesses greater incentives (through pricing or other means) to reduce emissions…international cooperation is key to ensure that all countries do their part. …The shift from fossil fuels will not only transform economic production processes, it will also profoundly change the lives of many people and communities. …Carbon taxes—charges on the carbon content of fossil fuels—and similar arrangements to increase the price of carbon, are the single most powerful and efficient tool… Even so, the global average carbon price is $2 a ton… To illustrate the extra effort needed by each country…, three scenarios are considered, with tax rates of $25, $50, and $75 a ton of CO2 in 2030.

The IMF asserts that the tax should be $75 per ton. At least based on alarmist predictions about climate warming.

What would that mean?

Under carbon taxation on a scale needed…, the price of essential items in household budgets, such as electricity and gasoline, would rise considerably… With a $75 a ton carbon tax, coal prices would typically rise by more than 200 percent above baseline levels in 2030… The price of natural gas…would also rise significantly, by 70 percent on average…carbon taxes would undoubtedly add to the cost of living for all households… In most countries, one-third to one-half of the burden of increased energy prices on households comes indirectly through higher general prices for consumer products.

Here’s a table from the publication showing how various prices would increase.

The bureaucrats recognize that huge tax increases on energy will lead to opposition (remember the Yellow Vest protests in France?).

So the article proposes various ways of using the revenues from a carbon tax, in hopes of creating constituencies that will support the tax.

Here’s the table from the report that outlines the various options.

To be fair, the microeconomic analysis for the various options is reasonably sound.

And if the bureaucrats embraced a complete revenue swap, meaning no net increase in money for politicians, there might be a basis for compromise.

However, it seems clear that the IMF favors a big energy tax combined with universal handouts (i.e., something akin to a “basic income“).

A political consideration in favor of combining carbon taxation with equal dividends is that such an approach creates a large constituency in favor of enacting and keeping the plan (because about 40 percent of the population gains, and those gains rise if the carbon price increases over time).

And other supporters of carbon taxes also want to use the revenue to finance a bigger burden of government.

Last but not least, it’s worth noting that the IMF wants to get poor nations to participate in this scheme by offering more foreign aid. That may be good for the bank accounts of corrupt politicians, but it won’t be good news for those countries.

And rich nations would be threatened with protectionism.

Turning an international carbon price floor into reality would require agreement among participants…participation in the agreement among emerging market economies might be encouraged through side payments, technology transfers…nonparticipants could be coerced into joining the agreement through trade sanctions…or border carbon adjustments (levying charges on the unpriced carbon emissions embodied in imports from nonparticipant countries to match the domestic carbon tax).

I’m amused, by the way, that the IMF has a creative euphemism (“border carbon adjustments”) for protectionism. I’m surprised Trump doesn’t do something similar (perhaps “border wage adjustment”).

For what it’s worth, the bureaucracy criticized Trump for being a protectionist, but I guess trade taxes are okay when the IMF proposes them.

But let’s not digress. The bottom line is that a massive global energy tax is bad news, particularly since politicians will use the windfall to expand the burden of government.

P.S. Proponents sometimes claim that a carbon tax is a neutral and non-destructive form of tax. That’s inaccurate. Such levies may not do as much damage as income taxes, on a per-dollar-collected basis, but that doesn’t magically mean there’s no economic harm (the same is true for consumption taxes and payroll taxes).

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I’ve warned (over and over and over again) that supporters of larger government want big tax hikes on ordinary people.

But you don’t have to believe me.

CNN hosted a discussion yesterday with the major Democratic candidates about global warming…oops, I mean climate change…no, sorry, the preferred term is now climate crisis.

Shockingly, something newsworthy actually happened. As reported by the New York Times, most of the candidates expressed support for a big carbon tax that would be especially painful for poor and middle-class taxpayers.

…more than half of the 10 candidates at the forum openly embraced the controversial idea of putting a tax or fee on carbon dioxide… Around the country and the world, opponents have attacked it as an “energy tax” that could raise fuel costs, and it has been considered politically toxic in Washington for nearly a decade. …In addition to proposing $3 trillion in spending on environmental initiatives, Ms. Warren also responded “Yes!” when asked by a moderator, Chris Cuomo, if she would support a carbon tax… Senator Kamala Harris of California, who on Wednesday morning released a plan to put a price on carbon, …calling for outright bans on hydraulic fracturing, or fracking, for oil and gas, and on offshore oil and gas drilling. …Mayor Pete Buttigieg of South Bend, Ind., who also released his climate plan on Wednesday, took the stage declaring his support for a carbon tax… The parade of far-reaching plans on display, ranging in cost from $1.7 trillion to $16.3 trillion… Two other candidates who said they would support carbon pricing, Senator Amy Klobuchar of Minnesota and the former housing secretary Julián Castro.

Interestingly, Crazy Bernie didn’t hop on the bandwagon.

Senator Bernie Sanders of Vermont…is one of the few candidates who has not called for a carbon tax.

In this case, his desire to selectively target upper-income taxpayers presumably is even stronger than his desire to grab more revenue to fund bigger government (and the burden of government would be far bigger under the Green New Deal).

By the way, there was a very interesting admission in the article.

The United States generates almost 25 percent of global economic output, yet our share of carbon emissions is much smaller.

…the United States is the world’s largest historic polluter of greenhouse gases, it today produces about 15 percent of total global emissions.

You would think the climate fanatics would be praising America. But they instead want people to believe the U.S. is worse than Cuba.

Anyhow, let’s return to the main topic of today’s column.

What exactly would it mean for ordinary people if politicians imposed a carbon tax?

The Democrats didn’t offer many specifics last night, so we’ll have to use a proxy estimate. In a column for the Hill, Vance Ginn and Elliott Raia highlight how families would get hit if U.S. politicians followed U.N. suggestions.

…travel…could soon be cost-prohibitive, if the U.N.’s Intergovernmental Panel on Climate Change (IPCC) has its way. …Its recommendation: a carbon tax of as much as $200 per ton of carbon dioxide emissions by 2030 to an astonishing $27,000 per ton by 2100. For America families, this could mean the price of gasoline soaring to $240 per gallon. Remember when we thought $4 per gallon was high? …Regardless of the amount, a carbon tax would…disproportionately hurt the poor and middle class, who pay a higher percentage of their incomes for motor fuel and energy. …Concrete, for example, is perhaps one of the most common carbon-intensive products… At the IPCC rate of $200 per ton of carbon dioxide emissions by 2030, the cost of building with concrete would rapidly rise. …Take a new home of 3,000 square feet. A simple slab foundation (with no basement) could use 100 cubic yards of concrete. Adding a $370 tax per cubic yard for a ton of carbon based on the $200 rate above would mean the cost of that home would likely rise $37,000.

For what it’s worth, the statists at the International Monetary Fund endorsed a $1.40 tax increase on a gallon of gas in America, which was part of a proposal to increases taxes on the average household by more than $5,000.

To be fair, I imagine the Democrats – if ever pressed for specifics – will propose taxes lower than what the U.N. or I.M.F. are suggesting.

That being said, it’s also fair to warn that taxes which start small almost always wind up becoming onerous.

Let’s close with a political observation.

At the risk of stating the obvious, people don’t like being saddled with higher taxes. And, as Sterling Burnett explains, they seem especially hostile to energy-related taxes.

From Alberta to Australia, from Finland to France, and beyond, voters are increasingly showing their displeasure with expensive energy policies imposed by politicians in an inane effort to purportedly fight human-caused climate change. …This is what originally prompted protesters in France to don yellow vests and take to the streets in 2018. They were protesting scheduled increases in fuel taxes, electricity prices, and stricter vehicle emissions controls, which French President Emmanuel Macron had claimed were necessary to meet the country’s greenhouse gas reduction commitments… Also in 2018, in part as a reaction against Canadian Prime Minister Justin Trudeau’s climate policies, global warming skeptic Doug Ford was elected as premier of Ontario, Canada’s most populous province. Ford announced he would end energy taxes imposed by Ontario’s previous premier and would join Saskatchewan’s premier in a legal fight against Trudeau’s federal carbon dioxide tax. …in August 2018, Australian Prime Minister Malcolm Turnbull was forced to resign over carbon dioxide restrictions he had planned… In Finland, …the Finns Party, which made the fight against expensive climate policies the central part of its platform, came out the big winner with the second-highest number of seats in Parliament.

I’ve previously written about taxpayer uprisings in France and Australia.

Perhaps the most relevant data, though, is from the state of Washington. Voters in that left-leaning state rejected a carbon tax in 2018 (after rejecting a different version in 2016).

So maybe Crazy Bernie was being Smart Bernie by not embracing the tax. And Joe Biden also chose not to explicitly back the proposed tax hike.

P.S. The parasitical bureaucrats at the OECD also have endorsed higher energy taxes on the United States.

P.P.S. I don’t have an informed opinion on the degree of man-made warming, but I am highly confident that statists are using the issue to promote bad policies that they can’t get through any other way.

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While it’s very good to have a clean environment, many environmentalists don’t understand cost-benefit analysis. As such, they make our lives less pleasant – inferior light bulbs, substandard toilets, inadequate washing machines, crummy dishwashers, dribbling showers, and dysfunctional gas cans – for little if any benefit.

We can add recycling to that list.

To be sure, all the hassle and time of sorting our garbage might be an acceptable cost if something was being achieved.

Unfortunately, as Jeff Jacoby has explained, that’s not the case. Not even close.

Let’s explore the issue.

In an article for the American Institute for Economic Research, Professor Michael Munger explains that most recycling actually is a net negative for the environment.

…I was invited to a conference called Australia Recycles! …Everyone there, everyone, represented either a municipal or provincial government, or a nonprofit recycling advocacy group, or a company that manufactured and sold complicated and expensive recycling equipment. …Recycling requires substantial infrastructure for pickup, transportation, sorting, cleaning, and processing. …For recycling to be a socially commendable activity, it has to pass one of two tests: the profit test, or the net environmental-savings test. If something passes the profit test, it’s likely already being done. People are already recycling gold or other commodities from the waste stream, if the costs of doing so are less than the amount for which the resource can be sold. …The real question arises with mandatory recycling programs — people recycle because they will be fined if they don’t, not because they expect to make money… If you add up the time being wasted on recycling rituals, it’s even more expensive to ask each household to do it. The difference is that this is an implicit tax, a donation required of citizens, and doesn’t cost money from the public budget. But time is the least renewable of all resources… For recycling to make any sense, it must cost less to dispose of recycled material than to put the stuff in a landfill. But we have plenty of landfill space, in most of the country. And much of the heaviest material we want to recycle, particularly glass, is chemically inert and will not decompose in a landfill. …landfilling glass does no environmental harm… So, is recycling useful? As I said at the outset, for some things it is. Aluminum cans and corrugated cardboard, if they can be collected clean and at scale, are highly recyclable. …But for most other things, recycling harms the environment. …If you care about the environment, you should put your bottles and other glass in the regular garbage, every time.

Jon Miltimore explains, in a column for the Foundation for Economic Education, that hundreds of cities have repealed recycling mandates because they simply don’t make sense.

…after sending my five-year-old daughter off to school, she came home reciting the same cheerful environmental mantra I was taught in elementary school. “Reduce, reuse, recycle,” she beamed, proud to show off a bit of rote learning. The moral virtue of recycling is rarely questioned in the United States. …recycling is tricky business. A 2010 Columbia University study found that just 16.5 percent of the plastic collected by the New York Department of Sanitation was “recyclable.” “This results in nearly half of the plastics collected being landfilled,” researchers concluded. …hundreds of cities across the country are abandoning recycling efforts. …Like any activity or service, recycling is an economic activity. The dirty little secret is that the benefits of recycling have been dubious for some time. …How long? Perhaps from the very beginning. …there are the energy and resources that go into recycling. How much water do Americans spend annually rinsing items that end up in a landfill? How much fuel is spent deploying fleets of barges and trucks across highways and oceans, carrying tons of garbage to be processed at facilities that belch their own emissions? …It’s time to admit the recycling mania is a giant placebo. It makes people feel good, but the idea that it improves the condition of humans or the planet is highly dubious.

On a related topic, another FEE column even shows that anti-waste campaigns may actually increase waste.

To reduce waste, most governments run communication campaigns. Many try to make consumers feel guilty by telling them how much people like them waste (food, paper, water…). …The idea is that once people realise how much they waste, they will stop. Unfortunately, research has shown that when people are told that people like them misbehave, this makes them act worse, not better. In a June 2018 study, we confirm this backfiring effect in a series of studies on waste… Indeed, we found that backfiring effects of anti-waste messages happened because of difficulty. When consumer read that everyone wastes a lot, they think that it must be difficult to cut waste – so they don’t even try.

Let’s get back to the specific issue of recycling.

The fact that it doesn’t make sense is hardly a new revelation.

Way back in 1996, John Tierny had a very thorough article in the New York Time Magazine that summarized the shortcomings of recycling.

If you don’t want to read this long excerpt, all you need to know is that landfills are cheap, safe, and plentiful.

Believing that there was no more room in landfills, Americans concluded that recycling was their only option. Their intentions were good and their conclusions seemed plausible. Recycling does sometimes makes sense — for some materials in some places at some times. But the simplest and cheapest option is usually to bury garbage in an environmentally safe landfill. And since there’s no shortage of landfill space (the crisis of 1987 was a false alarm), there’s no reason to make recycling a legal or moral imperative. Mandatory recycling programs…offer mainly short-term benefits to a few groups — politicians, public relations consultants, environmental organizations, waste-handling corporations — while diverting money from genuine social and environmental problems. Recycling may be the most wasteful activity in modern America: a waste of time and money, a waste of human and natural resources. …Americans became racked with garbage guilt…  Suddenly, just as central planning was going out of fashion in eastern Europe, America devised a national five-year plan for trash. The Environmental Protection Agency promulgated a “Waste Hierarchy” that ranked trash-disposal options: recycling at the top, composting and waste-to-energy incinerators in the middle, landfills at the bottom. …Politicians across the country…enacted laws mandating recycling and setting arbitrary goals…, typically requiring that at least 40 percent of trash be recycled, often even more — 50 percent in New York and California, 60 percent in New Jersey, 70 percent in Rhode Island. …The Federal Government and dozens of states passed laws that required public agencies, newspapers and other companies to purchase recycled materials. …America today has a good deal more landfill space available than it did 10 years ago. …there’s little reason to worry about modern landfills, which by Federal law must be lined with clay and plastic, equipped with drainage and gas-collection systems, covered daily with soil and monitored regularly for underground leaks. …Clark Wiseman, an economist at Gonzaga University in Spokane, Wash., has calculated that if Americans keep generating garbage at current rates for 1,000 years, and if all their garbage is put in a landfill 100 yards deep, by the year 3000 this national garbage heap will fill a square piece of land 35 miles on each side. …This doesn’t seem a huge imposition in a country the size of America. …The millennial landfill would fit on one-tenth of 1 percent of the range land now available for grazing in the continental United States. …many experts and public officials acknowledge that America could simply bury its garbage, but they object to this option because it diverts trash from recycling programs. Recycling, which was originally justified as the only solution to a desperate national problem, has become a goal in itself… The leaders of the recycling movement…raise money and attract new members through their campaigns to outlaw “waste” and prevent landfills from opening. They get financing from public and private sources (including the recycling industry) to research and promote recycling. By turning garbage into a political issue, environmentalists have created jobs for themselves as lawyers, lobbyists, researchers, educators and moral guardians.

The bottom line is that most recycling programs impose a fiscal and personal cost on people for very meager environmental benefits.

Indeed, the benefits are often negative once indirect costs are added to the equation.

So why is there still support in some quarters?

In part, it’s driven by contributions from the companies that get paid to process recycled material.

But that’s only part of the story. Recycling is a way for some people to feel better about themselves. Sort of an internalized version of virtue-signalling.

That’s not a bad thing. I like a society where people care about the environment and feel guilty about doing bad things, like throwing trash out car windows.

But I’m a bit old fashioned in that I want them to feel good about doing things that actually make sense.

P.S. There’s a Washington version of recycling that is based on taxpayer money getting shifted back and forth between politicians and special interests.

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I’m in Sydney, Australia, but not because I’m confirming that this country will be my escape option if (when?) the United States suffers a Greek-style fiscal collapse.

Instead, I’m Down Under for the annual Friedman Conference.

This gives me an excuse to write about Australia, especially since national elections just took place this past weekend. Interestingly, the incumbent, right-of-center government retained power in an upset, winning 77 or 78 seats (out of a possible 151).

Here’s the breakdown.

The folks at Slate lean to the left, so their article is understandably riddled with anguish.

Australia’s dysfunctional, unpopular, conservative government…held onto power for a third term in Saturday’s national election. This happened despite the fact that most analysts expected it to lose a large number of seats; despite being (seemingly) out of step with the nation’s emerging consensus on climate change.. A Labor Party win had been anticipated for three years, with the opposition winning every single poll of the last term. …Expected swings against the coalition in several regions of the country didn’t materialize, while there was a crucial 4 percent swing against Labor in the state of Queensland (alternately described as Australia’s Alabama or Florida). …Progressive Australians are—to understate things—“hurting,”…(only they’re threatening to move to New Zealand instead of Canada). …Labor’s environmental stance, while not actually all that bold, hurt it in coal-friendly Queensland and among voters worried about the costs of acting on climate change… Progressive Australians are reeling because any lingering illusions that we were a “fair” nation have been shattered. Whatever Labor’s political shortcomings, Australians in general voted against a detailed platform that aimed to seriously address climate change, raise wages, increase cancer funding, make child care free or significantly cheaper, close tax loopholes for corporations and the wealthy, fund the arts, fund the underfunded public broadcaster… Instead, they voted for … not much of anything (other than some tax cuts).

Since I’m a wonk, I’m much more interested in the policy implications rather than the political machinations.

The good news is that Labor’s defeat means Australia will be spared some costly tax increases and some expensive green intervention.

But it’s unclear whether there will be many pro-growth reforms.

The right-of-center Liberal-National Coalition has promised some tax relief, but I don’t know if it will be supply-side rate reductions or merely the distribution of favors using the tax code.

For what it’s worth, Australia needs to lower its top tax rate on households, which is nearly 50 percent. European-type tax rates are always a bad idea, and they are especially senseless for a country that has to compete with Hong Kong and Singapore.

It would also be nice if the newly reelected government chooses to fix some of the housing policies that have made Australian cities very unfriendly to families.

Joel Kotkin explains why this is a problem in an article for City Journal.

Few places on earth are better suited for middle-class prosperity than Australia. From early in its history, …the vast, resource-rich country has provided an ideal environment for upward mobility… Over the last decade, though, Australia’s luck has changed… Despite being highly dependent on resource sales to China—largely coal, gas, oil, and iron ore—Australia has embraced green domestic politics more associated with Manhattan liberals or Silicon Valley oligarchs than the prototypical unpretentious Aussie… Historically, the Australian Labor Party, like its counterpart in Britain, was a party of the working class. …These views seem almost quaint today, particularly for a Labor Party increasingly dominated by those operating outside the tangible economy, as part of the professional class—media, finance, public service—and concentrated in the largely family-free urban cores. …Australia’s commitment to renewable energy dwarfs that of even the most committed green-leaning countries. Per capita, Australia has installed roughly five times as many renewable-energy installations as the E.U., the U.S., or China, and even two-and-a-half times more than climate-obsessed Germany. …The most pernicious assault on Australia’s middle class comes from regulation of land and expenditures to promote urban density. …In Australia, only 0.3 percent of the country is urban. As in major cities in Great Britain, Australia, the U.S., and Canada, “smart growth” has helped turn Australia’s once-affordable cities into some of the world’s costliest. …Sydney’s planning regulations, according to a Reserve Bank study, add 55 percent to the price of a home. In Perth, Melbourne, and Brisbane, the impact exceeds $100,000 per house. Australian cities once filled with family-friendly neighborhoods are becoming dominated by dense apartments. …Today, many Australians face an uncharacteristically bleak future. Urged to settle where the planners and pundits prefer, they’re stuck in places both unaffordable and inhospitable, as part of a needless governmental drive to make life there more like that of the more congested, socially riven metropoles of Britain.

For all intents and purposes, I want Australian lawmakers to rekindle their reformist zeal.

If you look at the historical data from Economic Freedom of the World, you can see that Australia enjoyed a big jump in economic liberty between 1975-2000.

Basically climbing from 6 to 8 on a 0-10 scale.

Sadly, there hasn’t been much reform this century. That being said, Australia’s era of liberalization last century is still paying dividends. The country is routinely ranked in the top-10 for economic liberty.

Interestingly, many of the changes between 1975-2000 happened when the Labor Party was led by reformers such as Bob Hawke and Paul Keating.

Mr. Hawke, incidentally, just passed away. His obituary in the New York Times acknowledges that he liberalized the economy.

Bob Hawke, Australia’s hugely popular prime minister from 1983 to 1991, who presided over wrenching changes that integrated his nation into the global economy…, died on Thursday… Rising to power as a trade union leader, Mr. Hawke led his center-left Australian Labor Party to four consecutive election victories in a tenure of nearly nine years, in which Australia emerged dramatically from relative isolation… Confronting chronic strikes, soaring inflation, high unemployment and trade deficits, Mr. Hawke revolutionized the economy. He cut protective tariffs, privatized state-owned industries…reined in powerful unions… “We are now living in a tough, new competitive world in which we have got to make it on our own merits,” Mr. Hawke told The New York Times in 1985.

I’m irked, though, that the article doesn’t mention that Hawke (in power from 1983-91) began Australia’s system of personal retirement accounts.

That excellent reform, which was expanded by the Keating government (in power from 1991-96), is paying big dividends to Australia.

Indeed, let’s wrap up today’s column with some excerpts from a laudatory article in the Economist.

The last time Australia suffered a recession, the Soviet Union still existed and the worldwide web did not. …No other rich country has ever managed to grow so steadily for so long. …Public debt amounts to just 41% of GDP—one of the lowest levels in the rich world. That, in turn, is a function not just of Australia’s enviable record in terms of growth, but also of a history of shrewd policymaking. Nearly 30 years ago, the government of the day overhauled the pension system. Since then workers have been obliged to save for their retirement through private investment funds.

It’s noteworthy that the system of personal accounts, known as superannuation, manages to attract praise from unlikely quarters.

And it is one of the reasons for the country’s success. Here’s an accompanying chart showing that Australia has enjoyed more growth, higher wages, and less debt than other major nations.

Is Australian policy perfect? Of course not.

But does the data from Australia show that better policy leads to better results? Definitely.

P.S. The Aussies also reaped big benefits by unilaterally reducing trade barriers (it would be nice if a certain person residing at 1600 Pennsylvania Avenue learned from that experience).

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I have a series of columns where I explore tactical disagreements with folks who generally favor free markets and less government.

  • In Part I, I defended the flat tax, which had been criticized by Reihan Salam
  • In Part II, I explained why I thought a comprehensive fiscal package from the American Enterprise Institute was too timid.
  • In Part III, I disagreed with Jerry Taylor’s argument for a carbon tax.
  • In Part IV, I highlighted reasons why conservatives should reject a federal program for paid parental leave.

Today, we’re going to revisit the carbon tax because Josiah Neeley and William Murray of the R Street Institute have a column in the Hill that claims that levy would not finance bigger government.

…There have been numerous tax rate changes in the past 70 years, with the marginal income tax rate falling from a high of over 90 percent in the 1950s to as low as 28 percent in the late 1980s. Yet during this entire time period, federal tax revenue has stayed in a fairly narrow band when measured as a percentage of gross domestic product, never rising above 20 percent or falling much below 15 percent between 1950 and 2018. This phenomenon, which keeps federal revenues within a relatively narrow band, is known as Hauser’s law…the belief that any kind of new taxation introduces even greater government spending is based on very little actual evidence. Instead, Hauser’s law provides evidence that certain kinds of tax swaps, such as exchanging an income tax for a carbon tax, may actually increase the rate of economic growth without increasing the tax share of the overall economy.

They also claim that higher taxes don’t lead to more spending.

…demand for government spending drives tax policy, not the other way around. This conclusion has important implications for the carbon tax debate. …The relative imperviousness of the gross domestic product tax percent equilibrium since the late 1940s suggests that spending pressures drive taxes and not the other way around.

I have two responses to this analysis.

First, I very much want Hauser’s Law to be true. It would be very comforting if politicians in Washington could never seize more than 20 percent of the private sector’s output.

Sadly, that’s simply not the case. Just look at Europe, where central governments routinely extract far more than 40 percent of economic output.

All that’s required is taxes that target lower- and middle-income taxpayers. That’s happened in Europe because of harsh value-added taxes, punitive payroll taxes, onerous energy taxes, and income taxes that impose very high rates on ordinary people.

Needless to say, a carbon tax would be a step in that direction.

Second, the authors offer zero evidence that “government spending drives tax policy, not the other way around.”

By contrast, there is some persuasive data for the “starve the beast” hypothesis, which is based on the notion that higher taxes will encourage more spending.

In other words, Milton Friedman was right when he warned that “History shows that over a long period of time government will spend whatever the tax system raises plus as much more as it can get away with.”

Though I actually don’t think this causality debate is very important. The bottom line is that higher taxes are a bad idea if they trigger higher spending, and higher taxes also are a bad idea if they merely enable higher spending.

The column in the Hill is a spin-off from a recent study published by the R Street Institute.

Let’s look at that publication to further explore this issue. It starts with the basic hypothesis that a revenue-neutral carbon tax would be desirable.

…a carbon tax…provides a source of revenue that can be put to beneficial purposes, such as funding cuts to other existing taxes. By using the revenue from a carbon tax to replace existing ones, such a revenue neutral “tax swap” would greatly reduce or eliminate the economic costs of the tax. Indeed, in some cases, even if benefits from reduced emissions are not considered, a tax swap could be a net positive for the economy. …many critics of a carbon tax are skeptical as to whether a revenue-neutral carbon tax could be enacted. Some critics go further, arguing that even if a carbon tax started out as revenue neutral, it would not remain so. …While there are no guarantees, the existing evidence suggests that a revenue-neutral carbon tax would not lead to larger government over the long term and could even shrink it.

I don’t object to the notion that a carbon tax would be theoretically desirable if it replaced a tax that did more damage per dollar collected, such as the corporate income tax.

My concern has always been such a swap is highly unlikely. Indeed, many proponents of the carbon tax are very explicit about wanting to use the revenues to create a new entitlement. That would be the worst outcome, assuming we want more growth.

And, as noted above, I don’t think Hauser’s Law would save us from higher overall taxes and a larger burden of government spending.

Interestingly, the study basically acknowledges the same thing.

…given that Hauser’s Law is not an iron law of economics, it would be imprudent to put too much weight on it when considering the effects of a tax swap.

There are a couple of other parts of the study that deserve attention, including the assertion that politicians would have a hard time using the carbon tax as a money machine.

…a carbon tax has natural limitations that preclude it from being used to generate ever-increasing amounts of tax revenue. This is because higher carbon-tax rates induce a more rapid fall in greenhouse gas emissions. This, in turn, limits the overall revenue collected from the tax. In fact, unlike revenue from income, sales or property taxes, which tends to increase over time even at a constant tax rate, revenue from a carbon tax is likely to remain stable or fall gradually as emissions decline.

Since I’m a fan of the Laffer Curve, I think this argument is very reasonable in theory.

In effect, the R Street Institute is making the same argument – excessive tax rates can reduce revenue – that Alexander Hamilton used when endorsing tariffs.

But where is the point where carbon taxes become excessive? I don’t know the answer, but I’m very worried that there would be ample leeway to collect a lot of tax revenue before getting close to the revenue-maximizing point (the Congressional Budget Office estimates that a $25-per-ton carbon tax would generate more than $1 trillion in the first ten years).

The bottom line is that I worry that a carbon tax likely would be akin to a value-added tax. Yes, there are negative feedback effects from a VAT, as I noted at the end of yesterday’s column. But that doesn’t change the fact that the revenue-generating capacity of the VAT helps to explain Europe’s bloated welfare states.

I understand how a carbon tax, in theory, might not enable bigger government. But I see no way, in reality, that politicians wouldn’t use this new levy to finance even more spending.

P.S. If you’re not already convinced that a carbon tax will mean bigger government, then all you need to know is that both the International Monetary Fund and the Organization for Economic Cooperation and Development support higher energy taxes for the United States.

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I don’t like the tribal nature of American politics, in part because I get criticized for not playing the game.

I tell both groups that I care about public policy rather than personal or partisan loyalty. Not that this explanation makes either group happy.

Today, I’m going to give a “thumbs up” to the President for what he’s doing about car mileage regulations. Which means the first group will be happy and the second group will be irritated.

To be more specific, the Trump Administration is proposing to ease up on the CAFE (corporate average fuel economy) rules. The Obama Administration, working with California environmentalists, proposed to make these regulations far more costly. Trump’s people basically want to freeze the car mileage mandate at the current 37-miles-per-gallon level.

Here’s a look at the history of the CAFE standards.

Sam Kazman of the Competitive Enterprise Institute explained earlier this year why these regulation impose high costs. And deadly costs.

The federal government’s auto fuel economy standards have for decades posed a simple problem: They kill people. Worse, the National Highway Traffic Safety Administration has covered this up. …To call it a coverup isn’t hyperbole. CAFE kills people by causing cars to be made smaller and lighter. While these downsized cars are more fuel-efficient, they are also less crashworthy. …A 1989 Harvard-Brookings study estimated the death toll at between 2,200 and 3,900 a year. Similarly, a 2002 National Academy of Sciences study estimated that CAFE had contributed to up to 2,600 fatalities in 1993. …The Insurance Institute for Highway Safety, which closely monitors crashworthiness, still provides the same advice it has been giving for years: “Bigger, heavier vehicles are safer.”

The Trump Administration apparently was listening to Sam, and has decided to block future increases in the CAFE mandate.

Environmentalists are predictably upset, but the Wall Street Journal opined on this topic a couple of days ago and explained why it is good news.

The Trump Administration’s deregulation is improving consumer choice and reducing costs… Its proposed revisions Thursday to fuel economy rules continue this trend to the benefit of car buyers… Obama bureaucrats were acutely blind—perhaps willfully so—to economic and technological trends in 2012 when they set a fleetwide average benchmark of 54.5 miles a gallon by 2025. …Americans prefer bigger cars, which makes it harder for automakers to meet the escalating Cafe targets. …As prices rise to meet the new standards, consumers would also wait longer to replace their cars. The average age of a car is approaching 12 years, up from about 8.5 in 1995. Newer cars are more efficient and safer, so longer vehicle turnover could result in more traffic fatalities… Thursday’s Trump Administration proposal to freeze—not roll back—fuel economy standards at the current 2020 target of 37 miles a gallon. …Automakers also want to duck a prolonged legal tussle with California, which received a waiver from the Obama Administration under the Clean Air Act in 2013 to establish its own emissions standards and electric-car mandate. The proposed Trump standards would apply nationally.

Holman Jenkins of the WSJ also weighed in on the issue, pointing out that undoing Obama’s expansion of CAFE mandates will have no impact on the earth’s climate.

…the effect on climate change would be zero. The Obama White House at the time exaggerated by a factor of two the Environmental Protection Agency’s estimate of the effect on total emissions over the lifetime of the cars involved. It doesn’t matter. Two times nothing is still nothing. …Let’s remember the truth of Mr. Obama’s fuel-economy rules. He did not wander the balconies of the White House gazing far into the future when he drafted the 2021-25 fuel economy target of 54.5 miles a gallon. His flunkies, as documented in a House investigation, simply were looking for a impressive-sounding number to serve the administration’s political interests at the time. …in undoing Mr. Obama’s policies, Mr. Trump is doing nothing to hurt the climate.

Myron Ebell of the Competitive Enterprise Institute also wrote on the topic and noted that Trump’s policy will save about 1,000 lives each year.

…the administration has struck a blow for consumer choice that will be good news for drivers planning or hoping to buy a new car in the next decade. That’s because the mileage mandate is one of the main causes of rapidly rising vehicle prices. …Meeting ever more stringent fuel economy standards is driving up new vehicle prices. Sticker shock is thereby causing a lot of people to hang on to their current cars. The average age of all cars on the road is now at an all-time high of over 11-1/2 years. …Freezing CAFE standards will make new cars more affordable for millions of Americans and also allow many of them to buy bigger and hence even safer new models. How much safer will be hotly debated. The Transportation Department concludes that the proposed changes will prevent about 1,000 traffic fatalities a year. …For many people, fuel economy will still be the most important factor in choosing a new car. The good news for them is that the Trump administration’s action will in no way prevent them from buying a model that gets great gas mileage. The good news for everyone else is that the choice of models will be much wider than if the CAFE standard remained 54.5 mpg.

By the way, this isn’t simply a matter of saving lives.

After all, we theoretically could save thousands of lives by simply banning automobiles. In the world of sensible public policy, we make trade-offs, deciding if achieving a certain goal is worthwhile when looking at all the costs and all the benefits.

So it’s theoretically possible that a policy that leads to more premature deaths might be acceptable.

But CAFE fails even on that basis. As Marlo Lewis explained a few years ago, the policy both kills people and imposes net financial costs.

The bottom line is that Donald Trump just improved his grade on regulation.

Back in April, I gave him a B+ on regulation. But then he did something foolish in June that (if I recalculated) would have dropped him to a B. Now he’s probably back at a B+ because of the change to the CAFE rules.

Given what he’s doing on trade, he needs to boost his other grades as much as possible!

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Since I focus on public finance, I think California is crazy because of punitive taxes and reckless spending policies.

But I can understand why other people think California is crazy, period.

This is a state, after all, where politicians come up with bizarre ideas such as regulating babysitting and banning Happy Meals.

Not to mention banning other things as well.

So you won’t be surprised to learn that the Golden State is leading the way in attacking the horrible scourge of plastic straws.

Plastic straws are quickly becoming a takeout taboo. Starbucks has vowed to get its iconic green sippers completely off store shelves by 2020, while Seattle banned all plastic utensils, including straws, from bars and businesses city-wide earlier this month. San Francisco quickly followed suit this week and passed an ordinance that, once approved, will ban plastic straws beginning in July of 2019… It may seem as though the quarter-of-an-inch diameter drinking straw is the least of our worries. But environmentalists say the fight’s got to start somewhere. “We look at straws as one of the gateway issues to help people start thinking about the global plastic pollution problem,” Plastic Pollution Coalition CEO Dianna Cohen told Business Insider.

If I’m willing to claim earmarks are the gateway drug for big spending, then I can’t complain when other people come up with imaginative claims about other types of “gateways.”

In any event, there is a legitimate reason to be concerned about plastic.

Some straws drift out to sea, becoming just one more piece of the 79 thousand-ton colossal floating iceberg of trash called the Great Pacific Garbage Patch. Scientists who’ve studied the patch, a trash heap wider than two whole Texases that bobs somewhere between Hawaii and California, have discovered it’s essentially a watery pit of litter and illegal dumps that’s trapped in the ocean currents, and it is basically all plastic. …The anti-straw movement may have first picked up steam because…Texas A&M graduate student Christine Figgener…noticed something encrusted in the nose of one of the male turtles. …The team soon figured out it was actually a “plastic straw stuck in his nose,” and removed it, hoping the extraction might help give him some more breathing time on Earth.

But the people on the left side of the country are not actually solving this problem.

Plastic pollution is basically a problem caused by developing countries.

So the politicians in Seattle and San Francisco are making the Nanny State more intrusive without achieving anything.

A classic case of virtue signaling.

But look at the bright side. It’s already generated some great political satire.

Starting with this little girl.

I imagine the plastic straw will be a gateway for operating an unlicensed lemonade stand!

And if SWAT teams run out of harmless pot smokers to harass, they now have new target to justify their budgets.

And the gun grabbers will appreciate the importance of dealing with high-capacity straw dispensers.

Though it’s unclear how the left will deal with the danger of concealed straws.

Especially since some of those straw nuts will become dealers.

I’ve saved the best for last. For those old enough to remember OJ Simpson and the white Bronco, this image of a renegade toddler will bring back memories.

Remember, if you outlaw straws, only outlaws will have straws.

Next thing you know, they’ll try to outlaw tanks.

It’s a slippery slope!

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I’ve been writing about proposed carbon taxes since 2012.

My message is simple and straightforward. It’s possible to design a carbon tax that is theoretically appealing. Simply use all the revenue to get rid of some other tax that causes greater economic harm, such as the corporate income tax.

Which is basically the same argument that leads some folks to like the value-added tax.

But my argument against the carbon tax (like my argument against the VAT) is that we shouldn’t give politicians a new source of revenue without some sort of up-front, non-reversible repeal of an existing tax.

And since that’s not possible, the only good carbon tax is a dead carbon tax. However, it’s not very easy to kill this tax.

Columbia University’s Center on Global Energy Policy, working with several other organizations, just released four studies to boost the carbon tax.

Study #1.

Study #2.

Study #3.

Study #4.

And below you’ll see the most relevant table, which comes from study #4. It shows – in theory – what politicians might do with the additional money.

To add my two cents, I augmented the chart by numbering the options (in red) and then providing a short critique (in green).

In large part, I’m pointing out that “theory” may not resemble reality. For instance, how likely is it that politicians would impose this huge tax hike and allow all the funds to be used for deficit reduction (Option #3) instead of using a big chunk of the cash to buy votes?

Unfortunately, it’s not just academics and think tank people who are interested in this new tax.

The Wall Street Journal reports that a Republican congressman is pushing this levy.

A Florida Republican is set to propose a carbon-tax bill in Congress… The plan from Rep. Carlos Curbelo, who represents a Miami-area district…, would replace the federal gasoline tax with a tax on businesses including refineries, power plants and steel mills based on how much oil, coal and other fossil fuels they buy. The carbon tax would likely add three to 11 cents to the average pump price for a gallon of gasoline… he also views it as an infrastructure bill—it is crafted to raise additional revenue for bridges, roads and other projects—and as something he can sell as tax reform because it eliminates the gasoline tax. …Mr. Curbelo’s proposal would price carbon at $24 a metric ton and increase that every year by 2% plus the rate of inflation. It replaces the gasoline tax, which Mr. Cubelo frames as a version of tax overhaul. If enacted, his plan would raise an additional $57 billion to $106 billion a year.

Since Congressman Curbelo largely wants the new tax to fund bigger government, he’s proposing a version of Option #5.

Alex Brill of the American Enterprise Institute wants a different type of carbon tax.

One worthy candidate for the next tax reform effort is a cut in the most distortionary taxes in exchange for a tax on carbon emissions, combined with permanent carbon deregulation of the energy sector. …here are the three key components of a deregulatory carbon tax reform… Roll back burdensome carbon-related regulations. …The motivation is not disregard for the environment or climate, but distrust in the regulatory state as an efficient instrument. …A transparent carbon tax would…raise the price of certain consumer goods, including electricity and gasoline. That is a reality… It is, in fact, the policy’s intent. …a carbon tax would generate revenue that could be used to offset the cost of eliminating other taxes that impose greater harm on the economy. …Turning carbon tax revenues into universal welfare payments, as some have suggested, would not promote long-run economic growth.

The good news is that Alex wants Option #4 and is opposed to Option #2.

But that still doesn’t make it a good idea since Congress would never get rid of the corporate income tax.

Writing for the Washington Examiner, Michael Marlow also wants advocates of smaller government to support a carbon tax.

…conservatives should embrace the political opportunity it presents to reduce the harmful distortions imposed by other taxes and shrink the regulatory morass of federal agencies such as the Environmental Protection Agency. conservatives can achieve these goals with a well-crafted revenue-neutral carbon tax. …Because it would trade “good” policy (a carbon tax) for “bad” policy (regulations and taxes with high excess burdens), it would make government more efficient. And packaging together the benefits from deregulation and tax reform would compensate the public for any adverse economic impact… Ensuring that a carbon tax would not simply finance more government spending requires a strict commitment by conservatives that any legislation establishing a tax on carbon emissions must also include, first, an equal tax cut, preferably targeting existing taxes that impose the highest excess burdens on the economy, and second, a significant rollback of carbon regulations. On these points, conservatives should not negotiate.

Like Alex Brill, Michael Marlow is proposing to do the wrong thing in the best way.

But Option #4 would only be acceptable if the corporate tax is being totally abolished. And that’s not what he’s proposing.

Which is why many sensible voices are explaining that there’s no acceptable argument for a carbon tax.

The Wall Street Journal, for instance, opined on this issue last year.

…never changing is the call from some Republicans to neutralize the issue by handing more economic power to the federal government through a tax on carbon. …George Shultz and James Baker…have joined a group of GOP worthies for a carbon tax… They propose a gradually increasing tax that would be redistributed to Americans as a “dividend.” This tax on fossil fuels would replace the Obama Administration’s Clean Power Plan and a crush of other punitive regulations. …A carbon tax would be better than bankrupting industries by regulation and more efficient than a “cap-and-trade” emissions credit scheme. Such a tax might be worth considering if traded for radically lower taxes on capital or income.

The WSJ shares my concern that Option #4 eventually would turn into Option #2 or Option #5.

…in the real world the Shultz-Baker tax is likely to be one more levy on the private economy. Even if a grand tax swap were politically possible, a future Congress might jack up rates or find ways to reinstate regulations. Another problem is the “dividend.” …the purpose of taxes is to fund government services, not shuffle money from one payer to another. No doubt politicians would take a cut to funnel into renewable energy or some other vote-buying program. The rebates would also become a new de facto entitlement… all methods of calculating a price for carbon are susceptible to political manipulation. The Obama Administration spent years fudging “social cost of carbon” estimates to justify its regulatory agenda. The tax rate would also be influenced by international climate models that have overestimated the increase in global temperature for nearly two decades.

A column in National Review is similarly skeptical.

…a small but persistent group of Republicans are trying to persuade conservatives to abandon…principles and embrace a national energy tax. …the Climate Leadership Council, a group led by James Baker and George Shultz…recently met with the Trump administration to encourage the adoption of a $40-per-ton carbon tax. …There is nothing free-market about their massive new tax hike… A carbon tax would punish users of natural gas, oil, and coal, which make up 80 percent of the energy we consume. This means that all American families would face higher electricity bills and gasoline prices. In fact, it’s estimated that the Council’s carbon tax would hike gasoline prices by 36 cents per gallon. …these hikes would have a disproportionate impact on poor and middle-class families, who spend a higher percentage of their income on energy.

The column discusses a specific plan that envisions a new entitlement (Option #2), warning that it eventually would trigger other types of new spending (Option #5).

Shultz and Halstead want to offset the tax by redistributing to the American people the $300 billion in anticipated revenue from the carbon tax. This is not practical in the real world. The idea that Washington politicians would perpetually refund a massive new revenue stream is incredibly naïve… The more likely scenario is that the government would eventually begin to spend the new revenue… Carbon taxes make energy more expensive. They also destroy jobs, particularly in the manufacturing sector.

Benjamin Zycher of AEI also has a skeptical assessment.

The view is widespread among economists that a (Pigouvian) tax on emissions would be more efficient than the regulatory approach because regulations impose a rough, one-size-fits-all framework for reducing emissions, while a tax allows each emitter to find the least expensive method of achieving its emissions goal. …The central problem with the consensus view is straightforward: The emissions goal is not fixed. Instead, it must be chosen. …Once government derives revenues from a system of carbon taxes, with ensuing political competition for those revenues, it is not difficult to predict that under a broad range of conditions the emissions reduction goal will be inefficiently stringent. That is, the tax rate will be too high.

And what about the notion that at least the revenues can be used to reduce other taxes?

Fanciful thinking, Zycher explains.

Why should we predict that the interests benefiting from the reduction in the corporation income tax would prove to be the marginal members of whatever congressional coalition imposes the carbon tax? That certainly is possible, but other outcomes seem far more likely. Some industries and geographic regions will bear disproportionate burdens attendant upon the carbon tax, and their votes will be necessary to enact it, particularly in the US Senate. …The list of potential supplicants is long indeed, each comprising some combination of constituencies to protect and campaign contributions and votes to offer.

For all intents and purposes, he’s explaining that “public choice” will turn a bad idea into a really bad reality.

Paul Blair of Americans for Tax Reform summarizes another new proposal for a carbon tax, which is largely a version of Option #2.

Just last month, seven-figure swamp lobbyists Trent Lott and John Breaux rolled out their support for a “simple and elegant” tax on carbon dioxide emissions. Realizing the insufficient appetite for a new “tax,” the former senators disingenuously relabeled it as a “fee.” Their $40 per ton carbon tax would immediately result in a 36 cent per gallon increase in the gas tax. Proponents of the tax admit that the price of home heating would increase by 22 percent and coal would increase by an average of 264 percent. The revenue generated from this tax would constitute the largest tax increase in U.S. history. To offset some of these astronomical increases in energy costs, the plan would create a new national federally managed welfare program, paying the average family of four $2,000 a year…a program of that scale would greatly exceed the size of Obamacare, giving Uncle Sam the responsibility of managing another $1.7 trillion over a decade.

His conclusion is not subtle.

It’s a plan designed to harm American manufacturers, raise prices for every single American consumer, and prop up uncompetitive expensive sources of energy like solar and wind. It places trust in the federal government to manage yet another massive welfare program, while giving the Left a significant opportunity to extract more and more money from taxpayers. Killing a carbon tax dead in its tracks isn’t only good policy, it’s a basic IQ test for modern day conservatives.

Since Republicans have failed many IQ tests in recent years (see here, here, and here), this doesn’t leave me overflowing with optimism.

Last but not least, Ryan Ellis opines on Cong. Curbelo’s carbon tax.

Rep. Carlos Curbelo, R-Fla., will introduce a costly carbon tax bill on manufacturers… Curbelo’s own press release indicate that his carbon tax is structured to be a net tax increase. While it will eliminate the $0.184 per gallon federal tax on gasoline, the carbon tax will raise taxes higher (on net?) to the tune of $57 billion to $106 billion per year. Over a decade that’s a trillion dollar tax increase… Structurally, the Curbelo carbon tax is typical tax-and-spend liberalism. With the extra resources from the net tax increase, the plan proposes throwing money at so-called “infrastructure projects,” which comes right out of the 2009 Obama stimulus playbook.

As you can see, Ryan is not a fan of what Curbelo is proposing, which is a version of Option #5.

And Ryan also doesn’t want to enrich and empower the swamp.

While the bill by statute includes coal, petroleum, and natural gas, the EPA administrator is also given free rein to expand this carbon taxable list of industries at will. Imagine what an Obama administration would have done with that kind of power. …the Curbelo carbon tax also creates a United Nations NGO-style “National Climate Commission.” If that doesn’t sound scary enough, it also empowers this commission with an unlimited authorization to procure the services of “experts and consultants.” This section of the bill might as well be called the “DC swamp deep state full employment act.” How many of these taxpayer-funded “consultants” would an Obama-like administration use to enforce left-wing policies on the rest of us?

This is a long column, so let me conclude by noting that my opposition to a new tax has nothing to do with partisan politics. I’ve criticized Republicans for backing a carbon tax and I’ve also skewered Democrats for supporting that levy.

Heck, I’ve even gone after self-styled libertarians who advocate for this new tax. Especially when they pull a bait and switch, claiming initially that the revenue from a carbon tax could be used to lower other taxes, but then later admitting that they’re willing to acquiesce to a huge net tax increase.

Which confirms all my fears that a carbon tax would wind up being a gusher of money that would trigger an orgy of new spending in Washington.

P.S. I hope nobody will be surprised to learn that both the International Monetary Fund and the Organization for Economic Cooperation and Development support higher energy taxes for the United States.

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Considering that America’s Founders created a very small central government that operated for more than 100 years without any income tax (or any other broad-based tax), it’s very disappointing that Washington is now consuming more that 20 percent of our nation’s output.

That’s bad for growth since resources are diverted from the productive sector of the economy.

But let’s also keep in mind that politicians also impose policies that may not have much impact on GDP statistics, but definitely reduce our quality of life.

I’ve written about some of these annoying bits of red tape.

Jeffrey Tucker, in a column for the Foundation for Economic Education, shares my disdain for the nanny state.

Soap doesn’t work. Toilets don’t flush. Clothes washers don’t clean. Light bulbs don’t illuminate. Refrigerators break too soon. Paint discolors. Lawnmowers have to be hacked. It’s all caused by idiotic government regulations that are wrecking our lives one consumer product at a time, all in ways we hardly notice.

And he points out another item to add to our list.

We now have gas cans that don’t work nearly as well as they used to because of mindless bureaucracy.

Who would make a can without a vent unless it was done under duress? After all, everyone knows to vent anything that pours. Otherwise, it doesn’t pour right and is likely to spill. …The whole trend began in (wait for it) California. …The notion spread and was picked up by the EPA, which is always looking for new and innovative ways to spread as much human misery as possible. …So…you have not been able to buy gas cans that work properly. They are not permitted to have a separate vent. The top has to close automatically.

Environmental zealots tell us we need these poorly functioning gas cans to save the environment from vapor.

But as Tucker explains, the policy is backfiring.

…don’t tell me about spillage. It is far more likely to spill when the gas is gurgling out in various uneven ways, when one spout has to both pour and suck in air. …There is no possible rationale for these kinds of regulations. It can’t be about emissions really, since the new cans are more likely to result in spills.

Amen.

This is a never-ending nightmare when I mow my lawn. When it’s time to refill the gas tank, I know gas is going to spill regardless of how careful I am.

I can’t imagine that’s good for the environment (I’m sure it releases far more vapor than would seep into the atmosphere with a vent), but I confess that my main concern is that gas dribbles onto a hot lawnmower engine. So I’m always poised to run away from my mower if the thing bursts into flame.

Oh, the joy of red tape!

Writing for Forbes, Clyde Wayne Crews also has commented on this inane and counter-productive regulation.

…when I first tried to use these new gas cans a few months after purchase I was shocked at their new spring-loaded, Mousetrap game style…spouts. …You need three hands to operate today’s gas can spouts. You’ll start each project spilling more gas than you get into the mower, motorcycle, car or whichever. In other words, you will create more vapor emissions than you ever would have otherwise. …No gas cans available for sale anymore have vents on the opposite top-side either, so when trying to pour you get a sloshing, heaving mess, burping gasoline eruptions leaking from the complex yet flimsy spout that easily breaks.

But Wayne very helpfully proposes a solution…assuming one is willing to incur a small risk.

…in order to harm the Earth less with a normal, non-polluting spout, I was wondering about workarounds for the inhumane, vapor-spewing trick spouts the environmentally unfriendly EPA forces you to buy to increase pollution. With a bit of searching, I found so-called EZ Pour “water” jugs. Note: You and I cannot use these alternatives to pour gasoline into vehicles or equipment, since that is an illegal non-EPA bureaucrat-approved hack, but they can be used to pour “liquid,” however.

The EPA can have our EZ Pour jugs when they pry them from our cold, dead, non-polluting fingers!

I had some fun in 2013 by pointing out that when they outlaw tanks, only outlaws will have tanks. Who could have predicted we’d be saying the same thing about well-functioning gas cans?

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I have a fantasy of junking the entire corrupt tax system and adopting a simple and fair flat tax.

I have an even bigger fantasy of shrinking the size and scope of the federal government to what America’s Founders intended, in which case Washington wouldn’t need any broad-based tax.

But in the real world, where I know “public choice” determines political behavior, I have much more limited hopes and dreams.

I’ve been saying for months that tax reform will be a worthwhile success if it leads to a significantly lower corporate tax rate and the elimination of the deduction for state and local income taxes.

And I recently added repeal of the death tax as a third item that would make me very happy.

Now let’s add a fourth item to my wish-list. The House version of tax reform actually does  a decent job of curtailing some of the egregious distortions that line the pocket of companies that peddle so-called green energy.

I know it must be a decent job since the GOP plan is causing angst for leftist journalists.

The Republican-controlled House of Representatives…bill would slash incentives for renewable energy and the electric car industry. Environmental groups are frantic. …The House provision raising the most ire are proposed changes to the renewable electricity production tax credit, which benefits producers of wind, solar, geothermal and other types of renewable energy. …The House GOP plan would also repeal the Investment Tax Credit for big solar projects that start construction after 2027. House Republicans also propose eliminating the $7,500 credit for electric vehicle purchases. …the Senate bill may not include all of the House’s cuts to clean energy.

It is true that the Senate bill is very timid. But given that there will be a lot of pressure to find “offsets” in any final deal, I’m vaguely hopeful that some of the good provisions in the House bill will survive.

Let’s explore why that would be a very good outcome.

Veronique de Rugy of the Mercatus Center is not a fan of cronyist subsidies to solar energy.

Under President Barack Obama, green energy subsidies were given out like candy. The failure of solar panel company Solyndra is well-known, but the problem extends well beyond the shady loan deal and its half-billion-dollar cost to taxpayers. Between 2010 and 2013, federal subsidies for solar energy alone increased by about 500 percent, from $1.1 billion to $5.3 billion (according to the U.S. Energy Information Administration), and all federal renewable energy subsidies grew from $8.6 billion to $13.2 billion over the same period. …However, that didn’t stop the largest U.S. solar panel manufacturer, SolarWorld, from filing for bankruptcy earlier this year despite $115 million in federal and state grants and tax subsidies since 2012, along with $91 million in federal loan guarantees. SolarWorld and fellow bankrupt manufacturer Suniva are now begging for even more government assistance, in the form of a 40-cent-per-watt tariff on solar imports and a minimum price of 78 cents (including the 40-cent tariff) a watt on solar panels made by foreign manufacturers.

Mark Perry of the American Enterprise Institute explains that wind energy is reliant on taxpayer handouts.

…government data shows that offshore wind power cannot survive in a competitive environment without huge taxpayer subsidies. Today, wind power receives subsidies greater than any other form of energy per unit of actual energy produced. …public subsidies for wind on a per megawatt-hour basis are 26 times those for fossil fuels and 16 times those for nuclear power. …The tax credit gives $23 for every megawatt-hour of electricity a wind turbine generates during the first 10 years of operation. …Yet, even with these incentives, only 4.7 percent of the nation’s electricity is currently supplied by wind power and that is entirely wind power from on-land turbines. …Think about it: Four large power plants could produce as much electricity as offshore wind turbines placed side by side along the entire Atlantic seaboard from Maine to Florida. Moreover, power plants last longer than wind turbines. A British study found that turbines need to be replaced within 12 to 15 years, and they must be imported from Europe.

Given the disgusting nature of ethanol subsidies, I wonder whether Mark’s headline can possibly be accurate.

In any event, Senator Alexander of Tennessee agrees that wind subsidies are a bad idea.

As we look at all the wasteful and unnecessary tax breaks that are holding us back, I have a nomination: At the top of the list should be ending the quarter-century-old wind production tax credit now — not two years from now. This giveaway to wind developers was meant to end in 1999 but has been extended by Congress ten different times. While the wind production tax credit is scheduled to be phased out by the end of 2019, we should do better and end it at the end of this year, and use the $4 billion in savings to lower tax rates. …Congress needs to stop its habit of picking winners and losers in the marketplace. Twenty-five years of picking wind developers over more-reliable sources of electricity hasn’t paid off. Imagine what innovation we might unleash if we used the billions wasted on wind energy to invest in research to help our free-enterprise system provide the abundance of cheap, clean, reliable energy we need to power our 21st-century economy.

A recipient of tax preferences discusses his undeserved benefits in a Wall Street Journal column.

…it’s only appropriate that I express appreciation for the generous subsidy you provided for the 28-panel, four-array, 8,540-watt photovoltaic system I installed on my metal roof last year. Thanks to the investment tax credit, I slashed my 2016 federal tax bill by $7,758. …thanks to the incentives for rooftop solar, I’ve snared three subsidies. …fewer rooftop solar projects are being installed in low-income neighborhoods. …According to a study done for the California Public Utility Commission, residents who have installed solar systems have household incomes 68% higher than the state average. Ashley Brown, executive director of the Harvard Electricity Policy Group, calls the proliferation of rooftop solar systems and the returns they provide to lucky people like me, “a wealth transfer from less affluent ratepayers to more affluent ones.” It is, Mr. Brown says, “Robin Hood in reverse.” Do I feel bad about being a solar freeloader? Yes, a little. …the local barista or school janitor—people who likely can’t afford solar panels—are paying incrementally more for the grid’s maintenance and operation. And the more that people like me install panels, the more those baristas and janitors have to pay.

By the way, the United States is not the only nation with green-energy boondoggles (remember Solyndra?).

I’ve previously written about the failure of such programs in Germany.

Let’s add to that collection with an all-too-typical story from the United Kingdom.

Britain is wasting hundreds of millions of pounds subsidising power stations to burn American wood pellets that do more harm to the climate than the coal they replaced, a study has found. Chopping down trees and transporting wood across the Atlantic Ocean to feed power stations produces more greenhouse gases than much cheaper coal, according to the report. It blames the rush to meet EU renewable energy targets… Green subsidies for wood pellets and other biomass were championed by Chris Huhne when he was Liberal Democrat energy and climate change secretary in the coalition government. Mr Huhne, 62, who was jailed in 2013 for perverting the course of justice, is now European chairman of Zilkha Biomass, a US supplier of wood pellets.

In a perverse way, I admire Mr. Huhne, who didn’t follow the usual revolving-door strategy of politician-to-cronyist. He apparently went politician-to-prisoner-to-cronyist.

If you head north in Great Britain, the foolishness mostly revolves around wind power.

…the blackmailing, money-printing sausage factory is a wind farm in Scotland. There are currently about 750 wind farms north of the border, with roughly 3,000 wind turbines. …The wind farms are distributed across Scotland, sometimes in very remote regions, so there is a real problem in getting their energy down to the English border – let alone getting it across. …Why has so much been built? Partly, it is because of income-support subsidies. This top-up of nearly 100 per cent over the wholesale price – funded, of course, from consumer bills – makes wind farms very attractive… Subsidies to onshore wind in the UK now cost a little under £600 million a year, with Scottish wind taking about half, yet the Scottish government continues to ignore the protests and consent to new wind farms as if they cost almost nothing at all. Which as far as Holyrood is concerned, is in fact true. Part of the attraction for Scottish politicians is that the subsidies that pay for Scottish wind farms come from consumers all over Great Britain. Scottish consumption is about 10 per cent of the British total – so when the Scottish government grants planning permission to the wind industry, it is simply writing a cheque drawn overwhelmingly on English and Welsh accounts. …The result is that there is a perverse incentive to locate wind farms in Scotland, even though they aren’t welcome and the grid can’t take their output.

You won’t be surprised to learn, by the way, that taxpayers in the U.K. have been subsidizing green groups.

From an economic perspective, the bottom line is that green energy is more expensive and it requires subsidies that line the pockets of politically connected people and companies. That’s true in America, and it’s true in other nations.

Which is unfortunate, because it gives a bad name to energy sources that probably will be capable of producing low-cost energy in some point in the future.

Indeed, my long-run optimism about green energy is one of the reasons why I’m such a big believer in capitalism and private property. I just don’t want politicians to intervene today and make it harder to achieve future innovation.

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Keynesian economics is fundamentally misguided because it focuses on how to encourage more spending when the real goal should be to figure out policies that result in more income.

This is one of the reasons I wish people focused more on “gross domestic income,” which is a measure of how we earn our national income (i.e., wages, small business income, corporate profits, etc) rather than on “gross domestic product,” which is a measure of how our national income gets allocated (consumption, investment, government, etc).

Simply stated, Keynesians put the cart before the horse. Consumption doesn’t drive growth, it’s a consequence of growth.

But let’s set all that aside because we have new evidence that Keynesian stimulus schemes aren’t even very good at artificially goosing consumption.

Three economists (from MIT and Tex A&M) have crunched the numbers and discovered that Obama’s Cash-for-Clunkers scheme back in 2009 was a failure even by Keynesian standards.

The abstract of the study tells you everything you need to know.

The 2009 Cash for Clunkers program aimed to stimulate consumer spending in the new automobile industry, which was experiencing disproportionate reductions in demand and employment during the Great Recession. Exploiting program eligibility criteria in a regression discontinuity design, we show nearly 60 percent of the subsidies went to households who would have purchased during the two-month program anyway; the rest accelerated sales by no more than eight months. Moreover, the program’s fuel efficiency restrictions shifted purchases toward vehicles that cost on average $5,000 less. On net, Cash for Clunkers significantly reduced total new vehicle spending over the ten month period.

This is remarkable. At the time, the most obvious criticism of the scheme was that it would simply alter the timing of purchases.

And scholars the following year confirmed that the program didn’t have any long-run impact.

But now we find out that there was impact, but it was negative. Here’s the most relevant graph from the study.

It shows actual vehicle spending and estimated spending in the absence of the program.

For readers who like wonky details, here’s the explanatory text for Figure 7 from the study.

The effect of the program on cumulative new vehicle spending by CfC-eligible households is shown in Figure 7. The figure shows actual spending and estimates of counterfactual spending if there had been no CfC program. Cumulative spending under the CfC program was larger than counterfactual spending for the months immediately after the program. However, by February 1 the counterfactual expenditures becomes larger and by April has grown to be $4.0 billion more than actual expenditures under the program. It is difficult to make the case that the brief acceleration in spending justifies the loss of $4.0 billion in revenues to the auto industry, for two reasons. First, we calculate that in order to justify the estimated longer-term reduction in cumulative spending to boost spending for a few months, one would need a discount rate of 208 percent. Given the expected (and realized) duration of the recession, it seems difficult to argue in favor of such a discount rate. Second, we note that Cash for Clunkers seems especially unattractive compared to a counterfactual stimulus policy that left out the environmental component, which also would have accelerated purchases for some households without reducing longer-term spending.

By the way, the authors point out that Cash-for-Clunkers wasn’t even good environmental policy.

One could also argue that this decline in industry revenue over less than a year could be justified to the extent the program offered a cost-effective environmental benefit. Unfortunately, the existing evidence overwhelmingly indicates that this program was a costly way of reducing environmental damage. For example, Knittel [2009] estimates that the most optimistic implied cost of carbon reduced by the program is $237 per ton, while Li et al. [2013] estimate the cost per ton as between $92 and $288. These implied cost of carbon figures are much larger than the social costs of carbon of $33 per ton (in 2007 dollars) estimated by the IWG on the Social Cost of Carbon [Interagency Working Group, 2013].

So let’s see where we stand. The program was bad fiscal policy, bad economic policy, and bad environmental policy.

The trifecta of Obamanomics. No wonder the United States suffered the weakest recovery of the post-WWII era.

P.S. David Letterman had a rather amusing cash-for-clunkers joke back in 2010.

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When I write about regulation, I usually focus on big-picture issues involving economic costs, living standards, and competitiveness.

Those are very important concerns, but the average person in American probably gets more irked by rules that impact the quality of life.

That’s a grim list, but it’s time to augment it.

Jeffrey Tucker of the Foundation for Economic Education explains that the government also has made showering a less pleasant experience. He starts by expressing envy about Brazilian showers.

…was shocked with delight at the shower in Brazil. …step into the shower and you have a glorious capitalist experience. Hot water, really hot, pours down on you like a mighty and unending waterfall… At least the socialists in Brazil knew better than to destroy such an essential of civilized life.

I know what he’s talking about.

I’m in a hotel (not in Brazil), and my shower this morning was a tedious experience because the water flow was so anemic.

Why would a hotel not want customers to have an enjoyable and quick shower?

The answer is government.

…here we’ve forgotten. We have long lived with regulated showers, plugged up with a stopper imposed by government controls imposed in 1992. There was no public announcement. It just happened gradually. After a few years, you couldn’t buy a decent shower head. They called it a flow restrictor and said it would increase efficiency. By efficiency, the government means “doesn’t work as well as it used to.” …You can see the evidence of the bureaucrat in your shower if you pull off the showerhead and look inside. It has all this complicated stuff inside, whereas it should just be an open hole, you know, so the water could get through. The flow stopper is mandated by the federal government.

The problem isn’t just the water coming out of the showerhead. It’s the water coming into your home.

It’s not just about the showerhead. The water pressure in our homes and apartments has been gradually getting worse for two decades, thanks to EPA mandates on state and local governments. This has meant that even with a good showerhead, the shower is not as good as it might be. It also means that less water is running through our pipes, causing lines to clog and homes to stink just slightly like the sewer. This problem is much more difficult to fix, especially because plumbers are forbidden by law from hacking your water pressure.

So why are politicians and bureaucrats imposing these rules?

Ostensibly for purposes of conservation.

…what about the need to conserve water? Well, the Department of the Interior says that domestic water use, which includes even the water you use on your lawn and flower beds, constitutes a mere 2% of the total, so this unrelenting misery spread by government regulations makes hardly a dent in the whole. In any case, what is the point of some vague sense of “conserving” when the whole purpose of modern appliances and indoor plumbing is to improve our lives and sanitation? (Free societies have a method for knowing how much of something to use or not use; it is called the signaling system of prices.)

Jeffrey is right. If there really is a water shortage (as there sometimes is in parts of the country and world), then prices are the best way of encouraging conservation.

Now let’s dig in the archives of the Wall Street Journal for a 2010 column on the showerhead issue.

Apparently bureaucrats are irked that builders and consumers used multiple showerheads to boost the quality of their daily showers.

Regulators are going after some of the luxury shower fixtures that took off in the housing boom. Many have multiple nozzles, cost thousands of dollars and emit as many as 12 gallons of water a minute. In May, the DOE stunned the plumbing-products industry when it said it would adopt a strict definition of the term “showerhead”… A 1992 federal law says a showerhead can deliver no more than 2.5 gallons per minute at a flowing water pressure of 80 pounds per square inch. For years, the term “showerhead” in federal regulations was understood by many manufacturers to mean a device that directs water onto a bather. Each nozzle in a shower was considered separate and in compliance if it delivered no more than the 2.5-gallon maximum. But in May, the DOE said a “showerhead” may incorporate “one or more sprays, nozzles or openings.” Under the new interpretation, all nozzles would count as a single showerhead and be deemed noncompliant if, taken together, they exceed the 2.5 gallons-a-minute maximum.

And here’s something that’s both amusing and depressing.

The regulations are so crazy that an entrepreneur didn’t think they were real.

Altmans Products, a U.S. unit of Grupo Helvex of Mexico City, says it got a letter from the DOE in January and has stopped selling several popular models, including the Shower Rose, which delivers 12 gallons of water a minute. Pedro Mier, the firm’s vice president, says his customers “just like to feel they’re getting a lot of water.” Until getting the DOE letter, his firm didn’t know U.S. law limited showerhead water usage, Mr. Mier says. “At first, I thought it was a scam.”

Unsurprisingly, California is “leading” the way. Here are some passages from an article in the L.A. Times from almost two years ago.

The flow of water from shower heads and bathroom faucets in California will be sharply reduced under strict new limits approved Wednesday by the state Energy Commission. Current rules, established in 1994 at the federal level, allow a maximum flow of 2.5 gallons per minute from a shower head. Effective next July, the limit will fall to 2.0 gallons per minute and will be reduced again in July 2018, to 1.8 gallons, giving California the toughest standard of any U.S. state.

Though “toughest standard” is the wrong way to describe what’s happening. It’s actually the “worst shower” of any state.

P.S. I forget the quality of shower I experienced in South Korea, but I was very impressed (see postscript) by the toilet.

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I don’t have strong views on global warming. Or climate change, or whatever it’s being called today.

But I’ve generally been skeptical about government action for the simple reason that the people making the most noise are statists who would use any excuse to increase the size and power of government. To be blunt, I simply don’t trust them. In Washington, they’re called watermelons – green on the outside (identifying as environmentalists) but red on the inside (pushing a statist agenda).

But there are some sensible people who think some sort of government involvement is necessary and appropriate.

George Schultz and James Baker, two former Secretaries of State, argue for a new carbon tax in a Wall Street Journal column as part of an agenda that also makes changes to regulation and government spending.

…there is mounting evidence of problems with the atmosphere that are growing too compelling to ignore. …The responsible and conservative response should be to take out an insurance policy. Doing so need not rely on heavy-handed, growth-inhibiting government regulations. Instead, a climate solution should be based on a sound economic analysis that embodies the conservative principles of free markets and limited government. We suggest…creating a gradually increasing carbon tax…, returning the tax proceeds to the American people in the form of dividends. And…rolling back government regulations once such a system is in place.

A multi-author column in the New York Times, including Professors Greg Mankiw and Martin Feldstein from Harvard, also puts for the argument for this plan.

On-again-off-again regulation is a poor way to protect the environment. And by creating needless uncertainty for businesses that are planning long-term capital investments, it is also a poor way to promote robust economic growth. By contrast, an ideal climate policy would reduce carbon emissions, limit regulatory intrusion, promote economic growth, help working-class Americans and prove durable when the political winds change. …Our plan is…the federal government would impose a gradually increasing tax on carbon dioxide emissions. It might begin at $40 per ton and increase steadily. This tax would send a powerful signal to businesses and consumers to reduce their carbon footprints. …the proceeds would be returned to the American people on an equal basis via quarterly dividend checks. With a carbon tax of $40 per ton, a family of four would receive about $2,000 in the first year. As the tax rate rose over time to further reduce emissions, so would the dividend payments. …regulations made unnecessary by the carbon tax would be eliminated, including an outright repeal of the Clean Power Plan.

They perceive this plan as being very popular.

Environmentalists should like the long-overdue commitment to carbon pricing. Growth advocates should embrace the reduced regulation and increased policy certainty, which would encourage long-term investments, especially in clean technologies. Libertarians should applaud a plan premised on getting the incentives right and government out of the way.

I hate to be the skunk at the party, but I’m a libertarian and I’m not applauding. I explain some of my concerns about the general concept in this interview.

In the plus column, there would be a tax cut and a regulatory rollback. In the minus column, there would be a new tax. So two good ideas and one bad idea, right? Sounds like a good deal in theory, even if you can’t trust politicians in the real world.

However, the plan that’s being promoted by Schultz, Baker, Feldstein, Mankiw, etc, doesn’t have two good ideas and one bad idea. They have the good regulatory reduction and the bad carbon tax, but instead of using the revenue to finance a good tax cut such as eliminating the capital gains tax or getting rid of the corporate income tax, they want to create universal handouts.

They want us to believe that this money, starting at $2,000 for a family of four, would be akin to some sort of tax rebate.

That’s utter nonsense, if not outright prevarication. This is a new redistribution program. Sort of like the “basic income” scheme being promoted by some folks.

And it creates a very worrisome dynamic since people will have an incentive to support ever-higher carbon taxes in order to get ever-larger checks from the government. Heck, the plan being pushed explicitly envisions such an outcome.

I’ve made the economic argument against carbon taxes and the cronyism argument against carbon taxes. Now that we have a real-world proposal, we have the practical argument against carbon taxes.

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I will always have fond feelings for Playboy, though not for the stereotypical reason.

My appreciation for the magazine is largely based on the fact that I got a very nice honorarium from the German version back in the 1990s for writing an assessment of Bill Clinton’s likely approach to economic policy (confession: he turned out to be much better than I predicted).

Unfortunately, I’ve forgotten almost all of the German I learned in high school, so I can’t read the translated version of the article that appeared in the magazine.

Now Playboy has done something else that I appreciate, putting together a very clever matrix showing what Democrats, Republicans, Libertarians, and Greens think about various policy issues.

It’s obviously satire, but it’s very clever and effective because it does a good job of capturing stereotypes from each group (just like this poster showing 24 types of libertarians).

As you can see, the “libertarian chicken” obviously provided the answers for the third column.

In addition to mind-your-own-business Libertarians, Playboy gives us abortion-über-alles Democrats, elitist Republicans, and fuzzy-headed Greens. A bit of truth in all those caricatures.

So kudos to them for mocking all parties equally. Comedy Central probably wouldn’t be losing so many viewers if it also took this even-handed approach.

P.S. If you like libertarian-oriented humor (both pro and con), then click here and here.

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I’ve previously argued that private property rights are a vital component of a pro-environment agenda.

Interestingly, the Washington Post sort of agrees. At least with regards to fisheries. In a recent editorial, it acknowledged that the current communal system doesn’t work.

The world’s fisheries, which feed billions of people, are in serious decline. The authors of a study released Monday in the Proceedings of the National Academy of Sciences examined 4,713 fisheries, accounting for 78 percent of the world’s annual catch, and found that only a third were in decent biological shape.

The editorial then points out that there’s an incentive to over-harvest because the oceans are communal property, which creates a “tragedy-of-the-commons” scenario.

…while the fishing industry as a whole has an interest in sustaining the fisheries that provide it profits and feed the world, individual fishermen have an incentive to take as much as they can as quickly as they can. Over time, they degrade the fisheries on which they rely, but if they want to stay in business, they have little choice.

And the editorial concludes that giving fishermen the property right to a “catch share” would create better incentives.

…governments have extremely effective policy options to eliminate this tragedy of the commons. …governments must give fishermen a stake in the overall health of their fisheries. …require fishermen to hold rights to catch a certain amount of seafood in a certain fishery, which allows governments to manage the total haul and reduces the frenzied competition to scoop up as much as possible as quickly as possible. Ideally, these “catch shares” could be bought and sold so that rights would end up with those who could fish most efficiently.

Some of the language in the editorial rubs me the wrong way, such as “require fishermen” and “allows governments to manage,” but the bottom line is that the new system would be much more akin to a genuine market based on property rights.

To understand, consider the following example. Imagine there’s a communally owned pasture and a bunch of sheep owners. Would there be any incentive for the individual shepherds to properly conserve and manage the pasture? Not really, because any grass that wasn’t eaten by their sheep would be eaten by another shepherd’s sheep. So you wind up with a system where all the shepherds have an incentive to have their sheep consume as much grass as possible as quickly as possible.

That doesn’t end well.

But what if the pasture was divided up so that each shepherd had a plot of land, along with the right to buy and sell that land? With that system, the incentive to practice good husbandry would radically change.

And that’s basically what happens when you create a property rights-based fisheries system.

And the Washington Post believes this kind of approach could be enormously beneficial.

If applied globally, modern management plans could rehabilitate the median fishery in less than a decade. By 2050, nearly every fishery on the planet would be healthy. The resulting benefits would be astonishing. Relative to business as usual, the refreshed catch would grow by an annual 16 million metric tons, and seafood stocks would rise by 619 million metric tons. Fishermen would see an annual $53 billion rise in profit, a jump of 64 percent. The world’s fisheries could feed more people, and the fishing industry could boom, too.

Wow, this is so effusive that it sounds like me describing the benefits of a flat tax.

But just like I rely on real-world evidence for my praise of the flat tax, there’s also real-world evidence for successful fisheries based on property rights.

Consider, for instance, the experience of New Zealand.

By the early 1980s, with dwindling inshore stocks and too many boats, the New Zealand fishing industry and the government realised that a new fisheries management system was needed. Measures such as moratoriums and controlled fisheries failed to work. The common warning that ‘too many boats are chasing too few fish’ was rephrased by one fisherman as, ‘too many boats chasing no fish’. Radical thinking emerged. …In October 1986, after two years of consultation and planning, the Quota Management System was introduced, with widespread industry support. …Under the quota system a sustainable total catch or harvest of fish was set. Individuals or companies were allocated the right to catch certain quantities of particular species. Quotas became like other forms of property – they could be leased, bought, sold or transferred.

And how has this system worked?

It’s been a big success.

New Zealand’s Quota Management System has been viewed internationally as successful. This is particularly in comparison with many of the world’s fisheries… New Zealand has (so far) largely avoided the significant stock collapses that have occurred in fisheries overseas. In the early 2000s the Ministry of Fisheries had records on the status of 60–70% of stocks. Of these, about 80% were at or near target levels for sustainable harvest, and the total allowable catch for some fish had even increased.

The Economist, meanwhile, has written about Iceland’s system.

Central to its policy are the individual transferable quotas given to each fishing boat for each species on the basis of her average catch of that fish over a three-year period. …Subject to certain conditions, quotas can be traded among boats. Bycatch must not be discarded. Instead it must be landed and recorded as part of that boat’s quota. If she has exhausted her quota, she must buy one from another boat… All quota changes, catches and landings are posted on the internet, enabling everybody to see what is going on. The idea is to let fishermen be guided by the market. …Iceland no longer suffers from overcapacity, and the catch per boat is increasing. …Iceland offers lessons for other countries. The essential elements of its policies are to give fishermen rights that offer a reasonable expectation of profitable long-term fishing by encouraging the conservation of stocks. The system is clear, open and fairly simple, and it is well policed. It thus enjoys the respect of fishermen.

And the contrast to the command-and-control system used by the European Union is dramatic.

This contrasts with the common fisheries policy of the EU… For years, the union has simultaneously discouraged and promoted fishing, even as stocks have declined. Overfishing has intensified and the overcapacity of the fleet a few years ago rose to the point where the number of boats was almost twice the number needed for a sustainable harvest. The EU has offered inducements to those who gave up fishing even as it provided subsidies… The EU’s fisheries policy has long been notorious for its destructiveness, epitomised by the practice it either mandates or encourages of chucking back dead fish that are not big enough or not valuable enough, or just the wrong sort. …No wonder the EU’s stocks are 88% overfished, as the European Commission itself now admits. …No minister is present to represent the taxpayer, the consumer or the environment, let alone the fish.

The key, everywhere in the world, is a system of property rights.

Europe could surely learn from Iceland, but how widely could Iceland’s policies be copied? …The solution for Europe, and for other places, lies in a policy with Icelandic features: transferable quotas for all commercial species… Property rights are nearly always crucial in this. The tragedy of the sea is the tragedy of the commons, which is that anyone with access to a common resource has an interest in over-exploiting it because if he does not, someone else will. …Most fish…live fairly close to land, which is where they can, if the political determination exists, be assigned to the ownership of people with an interest in both exploiting and preserving them for a very long time, if not eternity. That this is so has been shown by Christopher Costello, an economist at the University of California, Santa Barbara, and his colleagues, in a study of over 11,000 fisheries. In the 121 with ownership-share systems, he reported in Science last September, the rates of collapse were significantly lower than in the others.

Having “rates of collapse” suggests that the property rights-based systems don’t always work perfectly. But that fact that those rates are “significantly lower” also indicates that they are far more effective than communal fisheries in preserving fish stocks.

P.S. There’s a worrisome analogy between communal fisheries and the welfare state since both involve a tragedy of the commons. In the case of the welfare state, when too many people decide to rely on the “communal property” of government for their existence, this creates a “tipping point” because productive people at some point are either unable or unwilling to continue pulling the wagon.

P.P.S. This is a lesson that the Pilgrims learned very quickly.

P.P.P.S. Unfortunately, larger societies have a tendency to develop “goldfish governments.”

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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.

Amen.

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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Remember Solyndra, the festering symbol of green-energy corruption that resulted in hundreds of millions of dollars of taxpayer money being flushed down the toilet?

And that was just one example. Based on the ratio of energy produced compared to insider enrichment, the entire green-energy racket is a sleazy boondoggle.

For taxpayers, this is a lose-lose situation. They pay to line the pockets of green donors, and they also suffer as government intervention diverts resources in ways that reduce jobs and economic output.

But look at the bright side. Every so often, some of the insider crooks get caught with their hands in the cookie jar.

In a column for the Washington Examiner, the invaluable Tim Carney highlights some of the insider sleaze that led to the resignation of Oregon’s Democratic Governor.

When a love affair begins with shared dreams of solar panels and fantasies of switchgrass, it shouldn’t surprise us that it leads to tears, resignation and federal investigations. Such is the love story of Oregon’s former governor John Kitzhaber and his fiancée, Cylvia Hayes.

Yup, it appears that Ms. Hayes cashed in on her relationship with the governor.

Hayes…described herself as a “policy adviser to Gov. John Kitzhaber on the issue of clean energy and economic development.” Hayes simultaneously ran a consulting firm called 3E Strategies….Demos was pushing governments to use a new measure of the economy — the Genuine Progress Indicator — in place of Gross Domestic Product. They hired Hayes to aid in this push. Soon, Kitzhaber adopted GPI as a new measure for state policies.

Sounds like pay-to-play, which is so typical of government.

But the GPI scam is just the tip of the iceberg.

…federal investigators are looking into Hayes’s work for companies that profited from Kitzhaber’s green policies. …Green energy deserves more scrutiny than the average industry, because so many of its technologies, being unprofitable and inefficient, depend on government subsidies for their very survival. One Hayes client was a California-based company called Waste to Energy Group. Hayes picked up Waste to Energy as a client in 2011 — after becoming first lady — as the company sought a contract for converting landfill gas into energy. …Mary Rowinski, a governor’s office employee, worked for Hayes. Hayes used Rowinski to set up her meetings with Waste to Energy. …Federal investigators probing the Hayes and Kitzhaber case are also seeking state agency contacts with the Oregon Business Council. The Business Council is a corporate lobby group, and a client of Hayes. …The important lesson is that the more you intertwine business and government, the more opportunities you create for cronyism. And green energy is fertile ground for such problems.

Tim’s lesson is spot on.

When you get big government, you get big corruption.

So how do we reduce sleaze in the political system.

Jay Cost, writing for the 2017 Project, urges an aggressive focus on fighting corruption.

…an anticorruption agenda should be integral to reform conservatism. First, reform conservatism is self-consciously oriented to the middle class, and political corruption works against the interests of the middle class. Usually the product of connections between interests and politicians, it favors the well-connected. The typical insurance agent, bakery owner, or office manager lacks such contacts. Second, an anticorruption agenda challenges the liberal belief that ever more government is good for the middle class. The left wishes to cast itself as defender of middle America and conservatives as champions of the elite. A full-throated attack on cronyism in the distribution of public favors would help conservatives fend off this accusation.

And he recognizes that “legal” corruption is just as big of a problem – perhaps even bigger – than “illegal” corruption.

…there is another form of corruption, an “honest” kind. Politicians see an opportunity to use their public authority to favor some private interest—be it the lobby for some commercial group, a wealthy donor, maybe themselves—and they take it. Often, no law is broken, but the public trust is nevertheless violated. James Madison understood corruption from this perspective—as including but not limited to illegal and venal activity.

So what’s the solution to the legal and illegal sleaze in Washington?

Cost seems to recognize that big government has enabled more corruption.

The legislative power has expanded most in three areas not prominently considered by the Founders: the promotion of economic development, the regulation of the economy, and the provision of social welfare benefits. For Congress, developing the national economy has long meant pork barrel politics. Members love to send money back to the district for improvements to rivers and harbors, for roads, railroads, airports, and so on. They want defense spending similarly distributed. The tax code is another place where Congress, in the name of economic growth, favors special interests. …And on top of this, a vast array of corporate welfare programs, like the Export-Import Bank, pay off various groups.

But he seems to think big government is now inevitable, and perhaps even desirable.

…one of the premises of the new reform conservatism is an acknowledgment that the federal government has a legitimate and potentially beneficial role to play in economic development, health care, education, and so on.

So his proposed reforms are rather tepid.

One goal should be to make it harder for members of Congress to cut deals with special interests. …Committee and subcommittee chairs should be required to obey stricter rules concerning conflicts of interest. They should not be allowed to accept money from interest groups with business before their committees. …the temporary lobbying ban on former members of Congress, now two years, should be extended and its loopholes closed. …Given the highly technical work that senior legislative staffers perform, they are grossly underpaid compared with their private counterparts. …The most skilled staffers should be paid appropriately… Similarly, Congress should increase the size of staffs—perhaps substantially.

Having worked on Capitol Hill, I have to say that I’m underwhelmed by these proposals.

More regulations, more staff, and higher pay are not going to change the culture of Washington.

I’m not sure if Mr. Cost sees himself as a reform conservative, or whether he’s merely offering advice to the so-called reformicons. In any event, his proposals symbolize what’s good and bad about reform conservatism: A recognition that government is causing problems, but solutions that are sometimes too tepid to actually solve problems.

The bottom line is that you can’t fix the corruption problems caused by big government unless you’re actually willing to get rid of big government.

P.S. If it’s true that misery loves company, then we can take solace in the fact that other nations have wasteful and corrupt green energy programs.

P.P.S. In keeping with our tradition, let’s close with a link to some amusing material about green-energy boondoggles.

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I’m a firm believer in climate change. Heck, there have been several ice ages and warming periods, so it’s obvious that temperatures shift over time.

And while I’m not particularly qualified to assess such matters, I’m also willing to believe that human activity has an effect on climate.

Moreover, even though I much prefer warm weather, I’m also open to the idea that global warming might be a bad thing that requires some action.

But here’s the catch. I don’t trust radical environmentalists. Simply stated, too many of these people are nuts.

Then there’s the super-nutty category.

But you know what’s even worse than a nutty environmentalist?

What terrifies me far more are the very serious, very connected, and very powerful non-nutty environmentalists who hold positions of real power. These folks are filled with arrogance and hubris and they have immense power to cause damage.

If you think I’m exaggerating, here’s some of what was contained in a release from the United Nations Regional Information Centre for Western Europe.

By the way, remember that these excerpts are not the unhinged speculation of some crazy conservative or libertarian. These are actually the words – and stated intentions – of the U.N. bureaucracy. They want central planning on steroids.

Christiana Figueres, the Executive Secretary of UNFCCC,  warns that the fight against climate change is a process and that the necessary transformation of the world economy will not be decided at one conference or in one agreement. …”This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time to change the economic development model that has been reigning for at least 150 years, since the industrial revolution. That will not happen overnight and it will not happen at a single conference on climate change, be it COP 15, 21, 40 – you choose the number. It just does not occur like that. It is a process, because of the depth of the transformation.”

Wow. These people want to “intentionally…change the economic development model” that has produced unimagined prosperity.

And they want to replace it with central planning by people who have never demonstrated any ability to generate wealth.

I’m not joking. If you look at Ms. Figueres’ Wikipedia page, you’ll see that she has even less experience in the private sector than President Obama.

Yup, just exactly the kind of pampered (and tax-free) global bureaucrat who should have the power to treat the global economy as some sort of Lego set.

Thomas Sowell has made the very important observation that there’s a giant difference between intelligence and wisdom and Ms. Figueres is a perfect example.

To give you an idea of her cloistered and narrow mindset, she was quoted by Bloomberg as expressing admiration for China’s totalitarian regime over America’s democratic system merely because it ostensibly produces the policies she prefers.

China, the top emitter of greenhouse gases, is also the country that’s “doing it right” when it comes to addressing global warming, the United Nations’ chief climate official said. …China is also able to implement policies because its political system avoids some of the legislative hurdles seen in countries including the U.S., Figueres said. …The political divide in the U.S. Congress has slowed efforts to pass climate legislation and is “very detrimental” to the fight against global warming, she said.

And the icing on the cake, needless to say, is that China’s environment is a catastrophe compared to the much cleaner air and water that exist in the United States!

Though you won’t be surprised to learn that Ms. Figueres is a great admirer of President Obama, even if he does represent a backwards democracy.

The climate chief even held up President Obama as a shining example of steps countries can take to tackle global warming.

Reminds me of a saying about birds of a feather, though I’m not sure how a bird with two left wings can get off the ground.

And don’t even get me started on all the exaggeration and hyperbole that is generated by the radical environmentalists. Though this Jim McKee cartoon is too good not to share.

P.S. Environmentalists are also grotesque hypocrites, as you can see here and here.

P.P.S. But to close on an upbeat note, we have some decent environmental humor here, here, here, and here.

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According to Gallup, Americans now identify “government” as the most important problem facing the United States.

That doesn’t surprise. Gallup also found last year that big government is considered a far greater danger to the nation that big business or big labor.

Moreover, a poll from NPR earlier this year found that government was the leading cause of stress in people’s lives.

And Gallup discovered earlier this year that a record number of Americans think that government is corrupt.

So why do Americans have such a dour view of officialdom?

Well, let’s look at one example. The Wall Street Journal has a devastating editorial about dishonest and unethical behavior by federal and state bureaucracies.

The column starts with a strong assertion.

Prosecutorial misconduct has become an ugly commonplace of modern government, manipulating the legal system to attack easy political targets. 

It’s one that many people recognize is accurate, and probably helps to explain why pollsters now find the kinds of results cited above.

But if you think the WSJ is exaggerating or that people are misguided for being hostile to government, just check out how 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 were victimized by bureaucrats run amok.

But I’m digressing. Let’s get to this newest case. It deals with a forest fire in California and subsequent efforts for federal and state bureaucracies to blame a private company and extort some of the firm’s cash and land.

The story began in 2007 with the Moonlight Fire in California that burned some 65,000 acres, about two-thirds on federal land. Within 48 hours and while the flames were still burning, the state’s department of forestry and fire protection, known as Cal Fire, and the U.S. Forest Service blamed the disaster on Sierra Pacific, a Redding-based company that owns some 1.2 million acres of timberland. In 2009 a federal-state task force brought official complaints against the company and nearby landowners. California officials filed an action in state court while prosecutors sued for $1 billion in federal court. Sierra Pacific has insisted it didn’t start the fire but, faced with an open-ended legal fight, the company in 2012 settled the federal case for $55 million and a deed of some 22,500 acres to the U.S. government.

So far, so good, at least from the federal government’s perspective.

But there was still the case that was filed in state court, which presumably represented another attempt to extort more money from Sierra Pacific.

And this is where the government screwed up, whether through greed or incompetence (probably both). The WSJ has some of the sordid details that have been unearthed.

…the state case continued, and it has exposed a fiasco of fraud and corruption… Among other problems, government investigators and prosecutors doctored reports, misrepresented facts and retaliated against employees whose questions threatened their strategy. …According to the theory implicating the company, the fire started when the blade of a Sierra Pacific bulldozer hit a rock and created a spark. Government investigators pinpointed a location and claimed they had confirmation from a bulldozer driver. Problem was, both the fire’s alleged point of origin and the scenario to buttress it were fraudulent. When the company questioned the bulldozer driver, he denied having made the statement and admitted he couldn’t have confirmed the statement prosecutors had him sign because he didn’t know how to read. Prosecutors were also dishonest about where the fire started. Overhead videos have shown that the point of origin marked by the government was well outside the visual boundaries of the burning forest nearly an hour after the fire started.

I’m tempted at this point to make some snarky joke, but this issue is far too serious. When the government prevaricates in legal proceedings, that undermines the rule of law and call into question the integrity of the entire system.

And the column reveals that there was corruption and mendacity at both the state and federal level.

A second federal prosecutor, Eric Overby, joined the case in 2011, only to withdraw promptly on discovering what he called prosecutorial abuse directed squarely at raising revenue. He told defense counsel that in “my entire career, I have never seen anything like this. Never.” In February 2014, California state Judge Leslie Nichols assailed the federal and state government for abuses of discovery so “reprehensible” and “egregious” that they “threatened the integrity of the judicial process.” He threw out the case and awarded Sierra Pacific $30 million in sanctions against Cal Fire.

There are still reverberations from the case as Sierra Pacific is seeking to void the agreement that was made (based on lies) with the federal government. Needless to say, one hopes the company will win.

But there’s something else that needs to happen. The corrupt government officials need to be penalized, ideally with criminal sanctions including jail time. The government’s lawyers also should be disbarred and lose their jobs.

Punishment is the right approach, both because it is deserved and because it’s the only way of sending an effective signal to other bureaucrats that there is a personal risk to government malfeasance.

I also think Sierra Pacific, like any other victimized party, deserves compensation. Unfortunately, that money would come from taxpayers when it should be deducted from the budgets of the misbehaving bureaucracies (and the salaries of the bureaucrats).

P.S. I noted at the end of last year that President Hollande in France has decided to get rid of his class-warfare 75 percent top tax rate.

That’s a sign of progress, to be sure, but I wasn’t nearly as eloquent on the issue as Dan Hannan. The British MEP has some very wise words in today’s Washington Examiner.

I was living in Brussels when François Hollande, the President of France, introduced his 75 percent top rate tax in 2012. Immediately, my quartier began to fill with French exiles, who could commute to Paris in just over an hour.  …Three years on, President Hollande is shame-facedly scrapping the 75 percent rate, having forcibly re-learned an ancient truth: Wealth taxes don’t redistribute wealth; they redistribute people. Thousands of well-off Frenchmen made the easy journey north, including the country’s richest man, Bernard Arnault. …Hollande’s tax, levied on incomes above one million euros, has been a miserable failure. Over its lifespan, it raised around $500 million, a tiny fraction of the original projections. Why? Well, the Paris bureaucrats who made those projections overlooked something rather important. Rich people don’t sit around waiting to be taxed. They have all sorts of ways of beating the system… A lot of politicians don’t want to hear this. Instead of accepting international competition, they legislate against it — by, for example, imposing international rules on tax harmonization.

Amen to all these excerpts. Hollande’s class-warfare scheme was an economic failure and a revenue failure.

I also like what Hannan wrote about tax competition, and you can watch two very brief speeches he made on that topic by clicking here.

P.S. If you enjoy short Dan Hannan speeches, here’s one about the European bureaucracy racket and here’s one on the hypocrisy of European politicians.

P.P.S. My favorite item from Hannan, though, is his column about the socialist part of Germany’s National Socialists.

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I believe that protecting the environment is both a good thing and a legitimate function of government.

But I’m rational. So while I want limits on pollution, such policies should be determined by cost-benefit analysis.

Banning automobiles doubtlessly would reduce pollution, for instance, but the economic cost would be catastrophic.

On the other hand, it’s good to limit carcinogens from being dumped in the air and water. So long as there’s some unbiased science showing net benefits.

But while I’m pro-environment, I’m anti-environmentalist. Simply stated, too many of these people are nuts.

Then there’s the super-nutty category.

But since I’m an economist, what really worries me is that these people are statists. There’s an old joke that environmentalists are “watermelons” since they’re green on the outside and red on the inside.

But maybe it’s not really a joke. At least not in all cases. Check out this video from Reason, filmed at the so-called climate march in New York City.

Just in case you think the folks at Reason deliberately sought out a few crazy people in an otherwise rational crowd, let’s now look at the views of Naomi Klein, who is ostensibly a big thinker for the left on environmental issues.

Slate published an interview with her and you can judge for yourself whether her views are sensible. Here’s some of what Slate said about her.

According to social activist and perennial agitator Naomi Klein, the really inconvenient truth about climate change is that it’s not about carbon—it’s about capitalism. …she’s turned her argument into a hefty book… This Changes Everything: Capitalism vs. the Climate is focused on exposing how the relentless pursuit of growth has locked us in to a system that’s incompatible with a stable climate. …

And here’s some of what Ms. Klein said.

The post-carbon economy we can build will have to be better designed. …not only does climate action mean a healthy community—it’s also the best chance at tacking inequality. …The divestment movement is a start at challenging the excesses of capitalism. It’s working to delegitimize fossil fuels, and showing that they’re just as unethical as profits from the tobacco industry. …profits are not legitimate in an era of climate change.

Profits are not legitimate?!? Geesh, sounds like a certain President who also disdains profit.

By the way, I’d bet Naomi Klein has a far bigger “carbon footprint” than the average person.

And I can say with great certainty that other leftists are huge hypocrites on the issue. Check out the vapid actor who did some moral preening at the climate-change march.

Kudos to Ms. Fields. She has a way of exposing phonies on camera.

Though I think it’s safe to say that Mr. DiCaprio doesn’t win the prize for being the biggest environmental hypocrite.

Shifting back to policy issues, even “mainstream” environmental initiatives are often very misguided. Here are a few examples.

The bottom line is that we presumably have some environmental challenges. For instance, it’s quite possible that there is some global warming caused by mankind.

I just don’t trust environmentalists to make policy. When they’re in charge, we get really dumb policies. Or grotesque examples of government thuggery. Or sleazy corruption and cronyism.

But at least we have some decent environmental humor here, here, here, and here.

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When I started writing about public policy, I never realized that …um…human waste would be a frequent topic.

*But we examined (not too closely!) the story of a Postal Service employee who defecated in someone’s yard and got to keep his job.

*We wondered why the Greek government wanted stool samples from entrepreneurs starting online companies.

*We mocked the Equal Employment Opportunity Commission for pushing a multi-billion dollar regulation to help “pee-shy” employees.

*We contemplated the story of a 30-year old man who wanted government handouts to subsidize his fetish of wearing adult diapers.

*And even though it had nothing to do with public policy, I wrote about my inability to figure out a foreign toilet.

So with that track record, you know I have to give some coverage to a report about EPA bureaucrats pooping in hallways.

Here is a passage from a story published by Government Executive.

Environmental Protection Agency workers have done some odd things recently. Contractors built secret man caves in an EPA warehouse, an employee pretended to work for the CIA to get unlimited vacations and one worker even spent most of his time on the clock looking at pornography. It appears, however, that a regional office has reached a new low: Management for Region 8 in Denver, Colo., wrote an email earlier this year to all staff in the area pleading with them to stop inappropriate bathroom behavior, including defecating in the hallway.

This somehow hasn’t been a problem anyplace I’ve worked, and I even spent some time on Capitol Hill in 1989-1990 (there was a lot of you-know-what in Congress, but it was the figurative kind).

But at least we can count on government to use any excuse to waste money. The EPA pissed away (no pun intended) some of our tax dollars so that a so-called consultant could state the obvious.

Confounded by what to make of this occurrence, EPA management “consulted” with workplace violence “national expert” John Nicoletti, who said that hallway feces is in fact a health and safety risk.

Gee, I wonder how much Mr. Nicoletti got paid to produce such brilliant analysis.

But let’s look at the silver lining to this story. When EPA bureaucrats are pooping in hallways, that’s a relatively non-destructive use of their time.

If the bureaucrats were industrious, we’d see more horror stories such as:

1. Persecuting a family for building a pond on their own property.

2. Persecuting a family for trying to build a house on their own property.

Let’s close by making fun of extreme environmentalism. For instance, green crazies have produced hand-cranked vibrators to fight global warming. And they also want us to use uncomfortable recycled toilet paper.

This makes them easy targets for satire, such as this video mocking Al Gore and this Hitler parody video about global warming.

We also have this joke about a modern-day Noah trying to build an ark, this satire about a “dam” beaver,” this humor involving the Pope, loggers, and an environmentalist, and this R-rated humor about a tree hugger.

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Two years ago, I shared a video about the Environmental Protection Agency’s brutal and thuggish tactics against an Idaho family.

Constitution Limits Government PowerThat story had a very happy ending because the Supreme Court struck a blow for property rights and unanimously ruled against the EPA (too bad that similarly sound analysis was absent when the Justices decided the Kelo case).

Now we have a new example of the EPA running amok

Let’s look at a horrifying report about another family in the cross hairs of a rogue bureaucracy.

All Andy Johnson wanted to do was build a stock pond on his sprawling eight-acre Wyoming farm. He and his wife Katie spent hours constructing it, filling it with crystal-clear water, and bringing in brook and brown trout, ducks and geese. It was a place where his horses could drink and graze, and a private playground for his three children.

Sounds like the American dream, but also responsible stewardship since ponds usually have a positive role in limiting erosion.

Unfortunately, the EPA’s pinhead bureaucrats saw an opportunity for pointless and destructive intervention.

But instead of enjoying the fruits of his labor, the Wyoming welder says he was harangued by the federal government, stuck in what he calls a petty power play by the Environmental Protection Agency. He claims the agency is now threatening him with civil and criminal penalties – including the threat of a $75,000-a-day fine. …The government says he violated the Clean Water Act by building a dam on a creek without a permit from the Army Corps of Engineers. Further, the EPA claims that material from his pond is being discharged into other waterways. Johnson says he built a stock pond — a man-made pond meant to attract wildlife — which is exempt from Clean Water Act regulations.  The property owner says he followed the state rules for a stock pond when he built it in 2012 and has an April 4-dated letter from the Wyoming State Engineer’s Office to prove it. …But the EPA isn’t backing down and argues they have final say over the issue. They also say Johnson needs to restore the land or face the fines.

As you can imagine, this was not exactly good news for the property owner.

Johnson says he was “bombarded by hopelessness” when he first received the administrative order from the EPA. …The EPA order on Jan. 30 gave Johnson 30 days to hire a consultant and have him or her assess the impact of the supposed unauthorized discharges. The report was also supposed to include a restoration proposal to be approved by the EPA as well as contain a schedule requiring all work be completed within 60 days of the plan’s approval. If Johnson doesn’t comply — and he hasn’t so far — he’s subject to $37,500 per day in civil penalties as well as another $37,500 per day in fines for statutory violations.

But kudos to Mr. Johnson. Unlike so many others, he’s not going to roll over and acquiesce to EPA brutishness.

Johnson plans to fight. “This goes a lot further than a pond,” he said. “It’s about a person’s rights. I have three little kids. I am not going to roll over and let [the government] tell me what I can do on my land. I followed the rules.”  …Johnson says his legal fight with the government agency is a teachable moment for his kids. “This is showing them that they shouldn’t back down,” Johnson said. “If you need to stand up and fight, you do it.”

Needless to say, the EPA is not the only out-of-control bureaucracy in Washington.

Let’s now read about the thuggish actions against blueberry growers by the Department of Labor.

Bureaucrats from that entity decided to launch a legal jihad against some growers and they relied on bad numbers and grotesque strategy.

Another example of big government run amok.

In late July 2012, officials from the Department of Labor’s Wage and Hour Division visited Pan-American Berry Growers, B&G Ditchen and E&S Farms for spot inspections. …the Labor Department’s Wage and Hour division district director, Jeff Genkos, accused the growers of minimum-wage violations and declared the blueberries “hot goods” under the 1938 Fair Labor Standards Act. This charge is usually reserved for, say, T-shirts sewn by child laborers. The effect was to stop the fruit from being shipped to customers. He then ordered the growers to pay back wages and penalties and asked them to sign away any right to appeal the deal.

What was most shocking about the DOL’s actions is that they engaged in Mafia-type tactics and “made an offer they couldn’t refuse.”

This put the growers in an impossible spot. Either they could collectively pay $240,435 or let millions of dollars’ worth of berries rot. And they only had a day or two to make a decision. They did what any prudent employer would do: They paid the money, and the hot goods order was lifted.

And you won’t be surprised that the bureaucracy cooked the numbers in the first place.

It turns out that Labor’s bureaucrats had divined that the average worker could only pick around 60 pounds of blueberries an hour, some 30 pounds below what workers usually pick. They then counted the number of workers employed and concluded the growers must have had workers employed off the books. …In January, Oregon magistrate judge Thomas M. Coffin ruled for the growers. “In essence, to avoid the potential loss of millions of dollars worth of berries, defendants had to agree to the DOL’s allegations without an opportunity to present a defense or confront the DOL’s evidence in an administrative or court hearing,” he wrote.

I’m glad at least one court has ruled against the Department of Labor. Let’s hope that the final result is positive when all the appeals have been exhausted.

Both of these stories belong in my collection of “Government Thuggery in Action.”

Previous examples include:

If you peruse those examples without getting angry at big government, you probably need a lengthy bit of soul-searching.

If you’re a normal person, you’ll want this t-shirt (and don’t be a perv, just the t-shirt!).

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I’ve written before that Obama’s Solyndra-style handouts have been a grotesque waste of tax dollars.

I’ve argued that they destroy jobs rather than create jobs.

I’ve gone on TV to explain why government intervention in energy creates a cesspool of cronyism.

I’ve even shared a column from Obama’s hometown newspaper that criticizes the rank corruption in green-energy programs.

And it goes without saying that I’ve disseminated some good cartoons on the issue.

But even though green-energy programs are a disgusting boondoggle, American taxpayers and consumers should be thankful they’re not in Germany.

Our programs may be wasteful and corrupt, but we’re amateurs compared to what’s happening on the other side of the Atlantic.

Here are some passages from a must-read story in Der Spiegel.

The government predicts that the renewable energy surcharge added to every consumer’s electricity bill will increase from 5.3 cents today to between 6.2 and 6.5 cents per kilowatt hour — a 20-percent price hike. German consumers already pay the highest electricity prices in Europe. But because the government is failing to get the costs of its new energy policy under control, rising prices are already on the horizon. Electricity is becoming a luxury good in Germany.

As is so often the case with government intervention, the promises from politicians about low costs were a mirage.

Even well-informed citizens can no longer keep track of all the additional costs being imposed on them. According to government sources, the surcharge to finance the power grids will increase by 0.2 to 0.4 cents per kilowatt hour next year. On top of that, consumers pay a host of taxes, surcharges and fees that would make any consumer’s head spin. Former Environment Minister Jürgen Tritten of the Green Party once claimed that switching Germany to renewable energy wasn’t going to cost citizens more than one scoop of ice cream. Today his successor Altmaier admits consumers are paying enough to “eat everything on the ice cream menu.”

Perhaps the most shocking part of the story is that Germans are being forced to pay $26 billion in subsidies to get less than $4 billion of green energy.

For society as a whole, the costs have reached levels comparable only to the euro-zone bailouts. This year, German consumers will be forced to pay €20 billion ($26 billion) for electricity from solar, wind and biogas plants — electricity with a market price of just over €3 billion. Even the figure of €20 billion is disputable if you include all the unintended costs and collateral damage associated with the project. …On Thursday, a government-sanctioned commission plans to submit a special report called “Competition in Times of the Energy Transition.” The report is sharply critical, arguing that Germany’s current system actually rewards the most inefficient plants, doesn’t contribute to protecting the climate, jeopardizes the energy supply and puts the poor at a disadvantage.

Here’s what it means for ordinary people.

In the near future, an average three-person household will spend about €90 a month for electricity. That’s about twice as much as in 2000. Two-thirds of the price increase is due to new government fees, surcharges and taxes. …Today, more than 300,000 households a year are seeing their power shut off because of unpaid bills. Caritas and other charity groups call it “energy poverty.”

Not surprisingly, politically well-connected interest groups are the ones reaping the benefits.

…the renewable energy subsidies redistribute money from the poor to the more affluent, like when someone living in small rental apartment subsidizes a homeowner’s roof-mounted solar panels through his electricity bill. The SPD, which sees itself as the party of the working class, long ignored this regressive aspect of the system. The Greens, the party of higher earners, continue to do so. Germany’s renewable energy policy is particularly unfair with respect to the economy. About 2,300 businesses have managed to largely exempt themselves from the green energy surcharge by claiming, often with little justification, that they face tough international competition. Companies with less lobbying power, however, are required to pay the surcharge.

Let’s conclude with an ominous excerpt from the article. Even though prices already are very high, energy will get even more expensive in the future.

If the government sticks to its plans, the price of electricity will literally explode in the coming years. According to a current study for the federal government, electricity will cost up to 40 cents a kilowatt-hour by 2020, a 40-percent increase over today’s prices.

And isn’t it nice to know that Obama is doing everything he can to impose these policies in the United States?

This cartoon from Michael Ramirez is a perfect summary of Obama’s policy.

Ramirez Green Energy Cartoon

You can see why Ramirez won my political cartoonist contest.

P.S. I don’t like being the bearer of bad news, but green-energy subsidies are just one part of the statist/green agenda. The IMF, for instance, has recommended a huge carbon tax (about $5,500 per year for a family of four!) for the United States. A few gullible folks think this might not be a bad idea if the money gets used to lower other taxes, but they’re the same people who get suckered into buying oceanfront property in Kansas.

P.P.S. Germany may be more responsible (less irresponsible) than certain other European nations, but the country’s political elite is hopelessly statist. Even the supposedly pro-liberty political party tilts left and wants bigger government. Yet the Washington Post still thought it was appropriate and accurate to declare that Germany is “fiscally conservative.” Sure, and I’m a socialist.

P.P.P.S. But at least the mess in Europe has generated some amusing videos (here, here, and here), as well as a very funny set of maps.

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National defense is one of the few legitimate functions of the federal government, but that doesn’t mean the military should get a blank check to spend unlimited amounts of money.

To make sure taxpayers get the best bang for the buck (no pun intended), there should be a sober assessment of threats to national security and a plan to defend against those threats without adding superfluous expenditures.

That being said, America already accounts for close to 50 percent of world military spending, with another 25 percent of the global total coming from nations that are allied to the United States, so I’m fairly confident that we’re not under-spending on the Pentagon.

That’s one of the reasons I don’t worry that much about the sequester, particularly since military spending actually climbs by about $100 billion over the next 10 years.

But I would like the Defense Department to have some flexibility to reallocate funds so that we spend money on national security rather than boondoggles.

And there are some absurd examples of waste at the Pentagon, including “green” jet fuel that costs 15 times as much as regular fuel. Here are some of the mind-boggling details from the Washington Examiner.

Defense Secretary Chuck Hagel recently warned that sequestration would cause “suspension of important activities, curtailed training, and could result in furloughs of civilian personnel” but the spending cuts haven’t killed the green fuels program, as the Pentagon has continued purchasing renewable fuel at $59 per gallon. “In March, Gevo entered into a contract with the Defense Logistics Agency to supply the U.S. Army with 3,650 gallons of renewable jet fuel to be delivered by the second quarter of 2013,” Gevo announced this week in its first quarter financial report. “This initial order may be increased by 12,500 gallons.

This is even worse than the bizarre $600,000 frog statue than the Defense Department selected to adorn a new $700 million office building.

Military Frog SculptureI realize that the $700 million office building should be the bigger issue, but I can’t help but be irked by the thought that taxpayers are being raped and pillaged for the frog.

In any event, the $700 million for the office building is pocket change compared to the amount of money we misallocate to subsidize Western Europe to protect against a Warsaw Pact military alliance that no longer exists!

Yes, it’s true that America’s main fiscal problem is entitlement spending. And, yes, domestic discretionary spending is a bigger problem than the defense budget.

But wasting money in those areas is not a reason to also have waste at the Pentagon.

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