Policy Institutes

Tim Lynch

Over at Cato’s Police Misconduct web site, we have identified the worst case for the month of November. It turns out to be the Cleveland Police Department.

To begin with, in late November, a Cleveland police officer shot and killed a 12-year old boy, Tamir Rice.

The press reports based on the police accounts at the time of the incident read:

A rookie Cleveland police officer shot a 12-year-old boy outside a city recreation center late Saturday afternoon after the boy pulled a BB gun from his waistband, police said.

Police were responding to reports of a male with a gun outside Cudell Recreation Center at Detroit Avenue and West Boulevard about 3:30 p.m., Deputy Chief of Field Operations Ed Tomba said.

A rookie officer and a 10-15 year veteran pulled into the parking lot and saw a few people sitting underneath a pavilion next to the center. The rookie officer saw a black gun sitting on the table, and he saw the boy pick up the gun and put it in his waistband, Cleveland Police Patrolmen’s Association President Jeffrey Follmer said.

The officer got out of the car and told the boy to put his hands up. The boy reached into his waistband, pulled out the gun and the rookie officer fired two shots, Tomba said.

As detailed in this video report by MSNBC’s Chris Hayes, the initial reports by the police do not jibe with video evidence in several major respects.

The video shows Rice, alone, playing with his toy gun and also with the snow, as 12 year olds are wont to do. He was not, as the police said, with “a few people” in the pavilion. Other police reports to the press said the shooting officer got out of his car and told Rice three times to put his hands up. The video, unfortunately without audio and recording at the speed of two frames per second, shows the officer shooting Rice within 1.5-2 seconds after exiting the police vehicle.

The officers also waited several minutes before administering CPR to the fallen child.

The original call that drew the police to the park in the first place said the person with the gun in the park was likely a minor and likely was a toy gun. Apparently, this information was not relayed to the responding officers, who called-in the shooting victim as “possibly 20” years old.

The officer who shot Rice “was specifically faulted for breaking down emotionally while handling a live gun” according to subsequent reporting. The internal memo that informed the report concluded that the officer be “released from the employment of the City of Independence [,Ohio].”

Here’s the thing: The Cleveland Police Department hired the officer without checking his personnel file from his previous law enforcement job!

This tragic event is just the latest that involves police using deadly force, and likely too quickly. The facts released by the police department that favor the police officers involved were either misleading or inaccurate.

At best, this event highlights poor communication and procedure leading up to and immediately following a tragedy. At worst, this is a police department caught covering up a series of preventable mistakes that cost the life of a young boy.

The Department of Justice recently issued a report after looking into the policies and practices of the Cleveland Police Department.  According to the New York Times,

The Justice Department report on Cleveland cataloged many instances of unjustified force, including officers who assaulted, pepper-sprayed and even Tasered people already being restrained. In one case last year, the police fired two shots at a man wearing only boxer shorts who was fleeing from two armed assailants. In a 2011 case, a man who had been restrained on the ground with his arms and legs spread was then kicked by officers. He was later treated for a broken bone in his face.

The city’s policing problems, [Attorney General] Holder said, stemmed from “systemic deficiencies, including insufficient accountability, inadequate training and equipment, ineffective policies and inadequate engagement with the community.”

 

David Boaz

Former Florida governor – but Texas native – Jeb Bush told the Wall Street Journal CEO Council:

Republicans need to show they’re not just against things, that they’re for a bunch of things. 

Which reminds me of a quotation from Lyndon B. Johnson that George Will often cites:

We’re in favor of a lot of things and we’re against mighty few.

Let’s hope Bush’s “bunch” is different from Johnson’s “lot.” We can’t afford another such escalation in the size, scope, and power of government.

Paul C. "Chip" Knappenberger and Patrick J. Michaels

The Current Wisdom is a series of monthly articles in which Patrick J. Michaels and Paul C. “Chip” Knappenberger, from Cato’s Center for the Study of Science, review interesting items on global warming in the scientific literature or of a more technical nature that may not have received the media attention that they deserved, or have been misinterpreted in the popular press.

Despite what you may think if you reside in the eastern United States, the world as a whole in 2014 has been fairly warm. For the past few months, several temperature-tracking agencies have been hinting that this year may turn out to be the “warmest ever recorded”—for whatever that is worth (keep reading for our evaluation). The hints have been turned up a notch with the latest United Nations climate confab taking place in Lima, Peru through December 12.  The mainstream media is happy to popularize these claims (as are government-money-seeking science lobbying groups).

But a closer look shows two things: first, whether or not 2014 will prove to be the record warmest year depends on whom you ask; and second, no matter where the final number for the year ranks in the observations, it will rank among the greatest “busts” of climate model predictions (which collectively expected it to be a lot warmer). The implication of the first is just nothing more than a jostling for press coverage. The implication of the latter is that future climate change appears to be less of a menace than assumed by the president and his pen and phone. 

Let’s examine at the various temperature records.

First, a little background. Several different groups compile the global average temperature in near-real time. Each uses slightly different data-handling techniques (such as how to account for missing data) and so each gets a slightly different (but nevertheless very similar) values. Several groups compute the surface temperature, while others calculate the global average temperature in the lower atmosphere (a bit freer from confounding factors like urbanization). All, thus far, only have data for 2014 compiled through October, so the final ranking for 2014, at this point in time, is only a speculation (although a pretty well-founded one).

The three major groups calculating the average surface temperature of the earth (land and ocean combined) all are currently indicating that 2014 will likely nudge out 2010 (by a couple hundredths of a degree Celsius) to become the warmest year in each dataset (which begin in mid-to-late 1800s). This is almost certainly true in the datasets maintained by the U.S. National Oceanographic and Atmospheric Administration (NOAA) and the UK Met Office Hadley Centre. In the record compiled by NASA’s Goddard Institute for Space Studies (GISS), the 2014 year-to-date value is in a virtual dead heat with the annual value for 2010, so the final ranking will depend heavily on the how the data come in for November and December. (The other major data compilation, the one developed by the Berkeley Earth group is not updated in real time).

There is one other compilation of the earth’s surface temperature history that has recently been developed by researchers Kevin Cowtan and Robert Way of the University of York. This dataset rose to prominence a year ago, when it showed that if improved (?) methods were used to fill in data-sparse regions of the earth (primarily in the Arctic), the global warming “hiatus” was more of a global warming “slowdown.” In other words, a more informed guess indicated that the Arctic had been warming at a greater rate than was being expressed by the other datasets. This instantly made the Cowtan and Way dataset the darling of folks who wanted to show that global warming was alive and well and not, in fact, in a coma (a careful analysis of the implications of Cowtan and Way’s findings however proved the data not up to that task). So what are the prospects of 2014 being a record warm year in the Cowtan and Way dataset? Slim. 2014 currently trails 2010 by a couple hundredths of a degree Celsius—an amount that will be difficult to make up without an exceptionally warm November and December. Consquently, the briefly favored dataset is now being largely ignored.

It is worth pointing out, that as a result of data and computational uncertainty,  none of the surface compilations will 2014 be statistically different from 2010—in other words, it is impossible to say with statistical certainty, that 2014 was (or was not) the all-time warmest year ever recorded.

It is a different story in the lower atmosphere.

There, the two groups compiling the average temperature show that 2014 is nowhere near the warmest (in data which starts in 1979), trailing 1998 by several tenths of a degree Celsius. This difference is so great that it statistically clear that 2014 will not be a record year (it’ll probably fall in the lower half of the top five warmest years in both the Remote Sensing Systems (RSS) and the University of Alabama-Huntsville (UAH) datasets). The variability of temperatures in the lower atmosphere is more sensitive to the occurrence of El Niño conditions and thus the super El Niño of 1998 set a high temperature mark that will likely stand for many years to come, or at least until another huge El Niño occurs.

Basically, what all this means, is that if you want 2014 to be the “warmest year ever recorded” you can find data to back you up, and if you prefer it not be, well, you can find data to back up that position as well.

In all cases, the former will make headlines.

But these headlines will be misplaced. The real news is that climate models continue to perform incredibly poorly by grossly overestimating the degree to which the earth is warming.

Let’s examine climate model projections for 2014 against the observations from the dataset which has the greatest chance of 2014 as the warmest year—the NOAA dataset.

Figure 1 shows the average of 108 different climate model projections of the annual surface temperature of the earth from 1980 through 2014 along with the annual temperature as compiled by NOAA.

 

Figure 1. Global annual surface temperature anomalies from 1980 to 2014. The average of 108 climate models (red) and observations from NOAA (blue) are anomalies from the 20th century average. In the case of the NOAA observations, the 2014 value is the average of January-October.

For the past 16 straight years, climate models have collectively projected more warming than has been observed.

Over the period 1980-2014, climate models projected the global temperature to rise at a rate of 0.24°C/decade while NOAA observations pegged the rise at 0.14°C/decade, about 40 percent less. Over the last 16 years, the observed rise is nearly 66 percent less than climate model projections. The situation is getting worse, not better. This is the real news, because it means that prospects for overly disruptive climate change are growing slimmer, as are justifications for drastic intervention.

We don’t expect many stories to look any further than their “2014 is the warmest year ever” headlines.

As to the rest of the picture, and the part which holds the deeper and more important implications, well, you’ll have to keep checking back with us here—we’re happy to fill you in!

Tim Lynch

Last November, voters in Washington, DC overwhelmingly approved a referendum that would have legalized marijuana in the city.  Now that measure has been stymied by House Republicans–led by Rep. Andy Harris (R-MD).

 

From today’s Washington Post: The move “shocked elected DC leaders, advocates for marijuana legalization and civil liberties groups.”

 

As a constitutional matter, the Congress can set policies for the District of Columbia, but this is an awful move.  No vote on marijuana reform, just override the voter-approved measure by inserting language into a gigantic spending bill.

 

Isn’t it interesting that such tactics never seem to be used to downsize the federal government and reduce its powers?  Why not zero out the budget for the DEA or the Export-Import Bank?

Charles Hughes

A new working paper from the National Bureau of Economic Research finds that significant minimum wage increases can hurt the very people they are intended to help. Authors Jeffery Clemens and Michael Wither find that significant minimum wage increases can negatively affect employment, average income, and the economic mobility of low-skilled workers. The authors find that significant “minimum wage increases reduced the employment, average income, and income growth of low-skilled workers over short and medium-run time horizons.”  Most troublingly, these low-skilled workers saw “significant declines in economic mobility,” as these workers were 5 percentage points less likely to reach lower middle-class earnings in the medium-term. The authors provide a possible explanation: the minimum wage increases reduced these workers’ “short-run access to opportunities for accumulating experience and developing skills.” Many of the people affected by minimum wage increases are on one of the first rungs of the economic ladder, low on marketable skills and experience. Working in these entry level jobs will eventually allow them to move up the economic ladder. By making it harder for these low-skilled workers to get on the first rung of the ladder, minimum wage increases could actually lower their chances of reaching the middle class.

Most of the debate over a minimum wage increase centers on the effects of an increase on aggregate employment, or the total number of jobs and hours worked that would be lost. A consensus remains elusive, but the Congressional Budget Office recently weighed in, estimating that a three year phase in of a $10.10 federal minimum wage option would reduce total employment by about 500,000 workers by the time it was fully implemented. Taken with the findings of the Clemens and Wither study, not only can minimum wage increases have negative effects for the economy as a whole, they can also harm the economic prospects of  low-skilled workers at the individual level.

Four states approved minimum wage increases through ballot initiatives in the recent midterm, and the Obama administration has proposed a significant increase at the federal level. This study should give them a reason to reconsider.

Recent Cato work on this topic can be found here and here

Nicole Kaeding

Last night, House and Senate negotiators released the legislative text for the government’s newest spending bill, dubbed the “Cromnibus.” The bill authorizes the government to spend $1.1 trillion on discretionary programs between now and September 30, 2015. The total spending level honors last year’s Ryan-Murray budget deal, but also makes a number of important changes to federal law.

These changes include:

Environmental Protection Agency (EPA): The EPA’s funding was cut by $60 million over last fiscal year. The agency’s budget has been cut by 21 percent since fiscal year 2010.

Department of Homeland Security (DHS): Following President Obama’s executive action on immigration, Republican sought to limit funding for DHS. According to the deal, DHS is only funded through February. The incoming Congress will need to fund the agency for the remainder of the fiscal year.

Internal Revenue Service (IRS): The IRS’ budget is cut by $345.6 million.

ObamaCare: The bill does not cut funding to ObamaCare implementation, but it also does not include any new funding to the Department of Health and Human Services and the Internal Revenue Service, the two agencies with primary implementation responsibilities. The bill also limits ObamaCare’s risk corridor provision, which provided a bailout to insurance companies.

Marijuana: The District of Columbia voted overwhelmingly in November to legalize marijuana. The Cromnibus halts the legalization process.

Yucca Mountain: The bill continues funding for the proposed nuclear storage site. Earlier this year, the Nuclear Regulatory Commission confirmed Yucca Mountain’s safety.

Overseas Contingency Operations: The budget deal also provides $64 billion in funding for military operations, including $5 billion for the fight against ISIS. The $64 billion is in addition to the $1.1 trillion in discretionary spending.

Internet Tax Moratorium: The federal moratorium on state and local internet taxes continues for one year.

 

Neal McCluskey

When I first heard about the White House Summit on Early Education being held today, I worried. “I sure hope this isn’t going to be a PR stunt to cheerlead for government pre-kindergarten programs,” I thought. Then I got the announcement: U.S. Secretary of Education Arne Duncan will be having a Twitter chat with pop sensation Shakira in conjunction with the summit! “Oh, I was just being silly,” I said to myself, relieved that this would be a sober, objective discussion about what we do – and do not – know about the effectiveness of pre-K programs.

Okay, that’s not actually what happened. In fairness to Shakira, she does appear to have a very serious interest in children’s well-being. Unfortunately, the White House does not appear to want to have an objective discussion of early childhood education.

Just look at this, from the official White House blog:

For every dollar we invest in early childhood education, we see a rate of return of $7 or more through a reduced need for spending on other services, such as remedial education, grade repetition, and special education, as well as increased productivity and earnings for these kids as adults.

Early education is one of the best investments our country can make. Participation in high-quality early learning programs—like Head Start, public and private pre-K, and childcare—provide children from all backgrounds with a strong start and a solid foundation for success in school.

Let me count the ways that this is deceptive, or just plain wrong, as largely documented in David Armor’s recent Policy Analysis The Evidence on Universal Preschool:

  • The 7-to-1 ROI figure – for which the White House cites no source – almost certainly comes from work done by James Heckman looking at the rate of return for the Perry Preschool program. It may well be accurate, but Perry was a microscopic, hyperintensive program from the 1960s that cannot be generalized to any modern, large-scale program.
  • If you look at the longitudinal, “gold-standard” research results for Head Start, you see that the modest advantages accrued early on essentially disappear by first grade…as if Head Start never happened. And federal studies released by the Obama administration are what report this.
  • It stretches credulity to call Head Start “high quality,” not just based on its results, but on its long history of waste and paralysis. Throughout the 2000s the federal Government Accountability Office and general media reported on huge waste and failure in the program.
  • Most evaluations of state-level pre-K programs do not randomly assign children to pre-K and compare outcomes with those not chosen, the “gold standard” mentioned above. Instead they often use “regression discontinuity design” which suffers from several shortcomings, arguably the biggest of which is that you can’t do longitudinal comparisons. In other words, you can’t detect the “fade out” that seems to plague early childhood education programs and render them essentially worthless. One large-scale state program that was evaluated using random-assignment – Tennessee’s – appears to be ineffective.
  • The White House says early childhood programs can help “children from all backgrounds.” Not only is that not true if benefits fade to nothing, but a federal, random-assignment evaluation of the Early Head Start program found that it had negative effects on the most at-risk children.

I suspect the vast majority of people behind expanding preschool are well intentioned, and I encourage them to leverage as much private and philanthropic funding as they can to explore different approaches to pre-K and see what might work. But a splashy event intended to proclaim something is true for which we just don’t have good evidence doesn’t help anyone.

Let’s not mislead taxpayers…or kids.

Alex Nowrasteh

In a little-noticed memo on November 20th, Department of Homeland Security Secretary Jeh Johnson ordered Customs and Border Protection and Citizenship and Immigration Services to allow unlawful immigrants who are granted advance parole to depart the United States and reenter legally.  This memo is based on a decision rendered in a 2012 Board of Immigration Appeals case called Matter of Arrabally. Allowing the immigrant to legally leave and reenter on advance parole means he or she can apply for a green card from inside of the United States–if he or she qualifies. 

Advance parole can be granted to recipients of DACA (deferred action for childhood arrivals) and DAPA (deferred action for parental accountability) if they travel abroad for humanitarian, employment, or educational purposes, which are broadly defined

Leaving the United States under advance parole means that the departure doesn’t legally count, so the 3/10 year bars are not triggered, and the unlawful immigrant can apply for a green card once they return to the United States through 8 USC §1255 if he or she is immediately related to a U.S. citizen.  Reentering the United States under advance parole means that the prior illegal entry and/or presence are wiped out in the eyes of the law.  Crucially, individuals who present themselves for inspection and are either admitted or paroled by an immigration officer can apply for their green card from inside of the United States and wait here while their application is being considered.

In such a case, unlawful immigrants who receive deferred action and who are the spouses of American citizens will be able to leave the United States on advance parole and reenter legally, allowing them to apply for a green card once they return.  Unlawful immigrants who are the parents of adult U.S. citizen children will be able to do the same.  Unlawful immigrants who are the parents of minor U.S. citizen children and are paroled back into the country will just have to wait until those children are 21 years of age and then they can be sponsored for a green card.

According to New York based immigration attorney Matthew Kolken, “President Obama’s policy change has the potential to provide a bridge to a green card for what could be millions of undocumented immigrants with close family ties to the United States.” 

When the legal memo ensures the consistent application of the Arrabally decision, Johnson could grant advance parole to DACA and DAPA recipients who will then be able to leave the United States and reenter to adjust their status to earn a green card if they have a family member who can sponsor them.  Advance parole would wipe out the 3/10 year bars threat for millions of unlawful immigrants and allow those who “touch back” in their home country and return legally to apply for their green cards from inside of the United States–a process called “adjustment of status.” 

This will only apply to those unauthorized immigrants who only have one immigration offense, such as entering unlawfully.  An unlawful immigrant who was deported or left voluntarily and then returned will not be eligible.  Immediate relatives of citizens that overstayed a legal visa are already eligible to apply for adjustment of status if they were previously inspected and admitted despite their overstay, so this policy does not affect them.  Advance parole and legal reentry will only allow those unlawful immigrants who entered without inspection one time to legally leave and reenter the United States where they can then apply for a green card if they have a family member that can sponsor them.

There is a potential legal catch.  To be eligible for parole under the statute, the foreigner would have to be a significant public benefit or be paroled for an urgent humanitarian reason.  However, the parole requirements for DACA recipients who have received parole so far are less onerous.  The “significant public benefit” or “urgent humanitarian reason” are potentially very difficult burdens for the DHS to overcome when granting parole to DACA and DAPA recipients.           

Kolken does not think those legal problems will constrain DHS in issuing advance parole.  “Advance parole is generally granted to recipients of deferred action who are able to establish that they intend to travel for humanitarian, employment or educational purposes,” he said.  “The problem lies with the fact that advance parole does not guarantee readmission into the country, which is why we need uniformity in the implementation of policy by inspecting officers.”  In other words, the current problem with advance parole is the unpredictability of the CBP officers at the port of entry.  The DHS memo should reduce that concern.

Advance parole could allow millions of DAPA and DACA recipients to adjust their status to lawful permanent residency.  By contrast, the 2013 Senate bill was only supposed to legalize around 8 million and over a much longer period of time.  Through manipulating the terribly confused and poorly written immigration laws, this executive action could legalize more unlawful immigrants more quickly than the Senate was willing to.  If he can do this legally (BIG question), one wonders: what took him so long to do it?    

Daniel J. Mitchell

Many statists are worried that Republicans may install new leadership at the Joint Committee on Taxation (JCT) and Congressional Budget Office (CBO).

This is a big issue because these two score-keeping bureaucracies on Capitol Hill tilt to the left and have a lot of power over fiscal policy.

The JCT produces revenue estimates for tax bills, yet all their numbers are based on the naive assumption that tax policy generally has no impact on overall economic performance. Meanwhile, CBO produces both estimates for spending bills and also fiscal commentary and analysis, much of it based on the Keynesian assumption that government spending boosts economic growth.

I personally have doubts whether congressional Republicans are smart enough to make wise personnel choices, but I hope I’m wrong.

Matt Yglesias of Vox also seems pessimistic, but for the opposite reason.

He has a column criticizing Republicans for wanting to push their policies by using “magic math” and he specifically seeks to debunk the notion - sometimes referred to as dynamic scoring or the Laffer Curve - that changes in tax policy may lead to changes in economic performance that affect economic performance.

He asks nine questions and then provides his version of the right answers. Let’s analyze those answers and see which of his points have merit and which ones fall flat.

But even before we get to his first question, I can’t resist pointing out that he calls dynamic scoring “an accounting gimmick from the 1970s” in his introduction. That is somewhat odd since the JCT and CBO were both completely controlled by Democrats at the time and there was zero effort to do anything other than static scoring.

I suppose Yglesias actually means that dynamic scoring first became an issue in the 1970s as Ronald Reagan (along with Jack Kemp and a few other lawmakers) began to argue that lower marginal tax rates would generate some revenue feedback because of improved incentives to work, save, and invest.

Now let’s look at his nine questions and see if we can debunk his debunking:

1. The first question is “What is dynamic scoring?” and Yglesias responds to himself by stating it “is the idea that when estimating the budgetary impact of changes in tax policy, you ought to take into account changes to the economy induced by the policy change” and he further states that it “sounds like a reasonable idea.”

But then he says the real problem is that conservatives exaggerate and “say that large tax cuts will have a relatively small impact on the deficit—or even that they make the deficit smaller” and that they “cite an idea known as the Laffer Curve to argue that tax cuts increase growth so much that tax revenues actually rise.”

He’s sort of right. There are definitely examples of conservatives overstating the pro-growth impact of tax cuts, particularly when dealing with proposals—such as expanded child tax credits—that presumably will have no impact on economic performance since there is no change in marginal tax rates on productive behavior.

But notice that he doesn’t address the bigger issue, which is whether the current approach (static scoring) is accurate and appropriate even when dealing with major changes in marginal tax rates on work, saving, and investment. That’s what so-called supply-side economists care about, yet Yglesias instead prefers to knock down a straw man.

2. The second question is “What is the Laffer Curve?” and Yglesias answer his own question by asserting that the “basic idea of the curve is that sometimes lower tax rates lead to more tax revenue by boosting economic growth.” He then goes on to ridicule the notion that tax cuts are self-financing, even citing a column by National Review’s Kevin Williamson.

Once again, Yglesias is sort of right. Some Republicans have made silly claims, but he mischaracterizes what Williamson wrote.

More specifically, he’s wrong in asserting that the Laffer Curve is all about whether tax cuts produce more revenue. Instead, the notion of the curve is simply that you can’t calculate the revenue impact of changes in tax rates without also measuring the likely change in taxable income. The actual revenue impact of changes in tax rates will then depend on whether you’re on the upward-sloping part of the curve or downward-sloping part of the curve.

The real debate is the shape of the curve, not whether a Laffer Curve exists. Indeed, I’m not aware of a single economist, no matter how far to the left (including John Maynard Keynes), who thinks a 100 percent tax rate maximizes revenue. Yet that’s the answer from the JCT. Moreover, the Laffer Curve also shows that tax increases can impose very high economic costs even if they do raise revenue, so the value of using such analysis is not driven by whether revenues go up or down.

3. The third question is “So do tax cuts boost economic growth?” and Yglesias responds by stating “the credible research on the matter is very very mixed.” But he follows that response by citing research which concluded that “a tax cut financed by reductions in wasteful spending or social assistance for the elderly would boost growth.”

But that leaves open the question as to whether the economy does better because of the lower tax burden, the lower spending burden, or some combination of the two effects. But I’ll take any of those three answers.

So is he “sort of right” again? Not so fast. Yglesias also cites the Congressional Research Service (which rubs me the wrong way) and a couple of academic economists who concluded that there is “no systematic correlation between the level of taxation and the level of economic growth.”

The bottom line is that there’s no consensus on the economic impact of taxation (in part because it is difficult to disentangle the impact of taxes from the impact on spending, and that’s not even including all the other policies that determine economic performance). But I still think Yglesias is being a bit misleading because there is far more consensus on the economic impact of marginal tax rates and debates about the Laffer Curve and dynamic scoring very often revolve around those types of tax policies.

4. The fourth question is “How does tax scoring work now?” and Yglesias respond to himself by noting that the various score-keeping bureaucracies measure “demand-side effects” and “behavioral effects.”

He’s right, but CBO uses so-called demand-side effects to justify Keynesian spending, so that’s not exactly reassuring news for people who focus more on real-world evidence.

And he’s also right that JCT measures changes in behavior (such as smokers buying fewer cigarettes if the tax goes up), and this type of analysis (sometimes called microeconomic dynamic scoring) certainly is a good thing.

But the real controversy is about macroeconomic dynamic scoring, which we’ll address below.

5. The fifth question is “Can we take a break from all this macroeconomic modeling?” and is simply an excuse for Yglesias to make a joke, though I can’t tell whether he is accusing Reagan supporters of being racists or mocking some leftists for accusing Reagan supporters of being racist.

So I’m not sure how to react, other than to recommend the fourth video at this link if you want some real Reagan humor.

6. The sixth question is “What do current scoring methods leave out?” and Yglesias accurately notes that what “dynamic-scoring proponents want is a model of macroeconomic consequences. They think that a country with lower tax rates will see more investment in physical and human capital, leading to more productivity, and more economic growth.”

He even cites my blog post from last month and correctly describes me as believing that it is “self-evidently ridiculous that the current CBO model says higher tax rates would lead to faster economic growth via lower deficits.”

I also think he is fair in pointing out that “people sharply disagree about how much tax rates actually influence economic growth” and that “the whole terrain is enormously contested.”

But this is why I think my view is the reasonable middle ground. At one extreme you find (at least in theory) some over-enthusiastic Republican types who argue that all tax cuts are self-financing. At the other extreme you find the JCT saying tax policy has no impact on the economy and actually arguing that you maximize tax revenue with 100 percent tax rates. I suspect that Yglesias, if pressed, will agree the JCT approach is nonsensical.

So why not have the JCT—in a fully transparent manner—begin to incorporate macroeconomic analysis?

7. The seventh question is “Has dynamic scoring ever been tried?” and Yglesias self-responds by pointing out that a Treasury Department dynamic analysis of the 2001 and 2003 tax cuts come to the conclusion that “the resulting budget impact would be 7 percent smaller than what was suggested by conventional scoring methods” and “ended with the conclusion that the Bush tax cuts substantially decreased revenue.”

In other words, dynamic analysis was not used to imply that tax cuts are self-financing. Indeed, the dynamic score in the example of what would happen if the Bush tax cuts were made permanent turned out to be very modest.

So why, then, are folks on the left so determined to block reforms that, in practice, don’t yield dramatic changes in numbers? My own guess, for what it’s worth, is that they don’t want any admission or acknowledgement that lower tax rates are better for growth than higher tax rates.

8. The eighth question is “Why are we talking about dynamic scoring now?” and Yglesias answers his own question by accurately stating that “the Republican takeover of Congress starting in 2015 gives the GOP an opportunity to either change the scoring rules, change the personnel in charge of the scoring, or both.”

He’s not just sort of right. He’s completely right. I have no disagreements.

9. The ninth question is “Why does the score matter?” and his self-response is “the scores matter because perceptions matter in politics.” In other words, politicians don’t want to be accused of enacting legislation that is predicted to increase red ink.

Yglesias is also right when he writes that this “effect shouldn’t be exaggerated. In the past, Republicans haven’t hesitated to vote for tax measures that the CBO says will increase the deficit. That’s because they have a strong preference for low tax rates.”

At the risk of being boring, I also think he’s right about the degree to which scores matter.

The bottom line is that questions #1, #2, #3, and #6 are the ones that matter. Yglesias makes plenty of reasonable points, but I think his argument ultimately falls flat because he spends too much time attacking the all-tax-cuts-pay-for-themselves straw man and not enough time addressing whether it is reasonable for the JCT to use a methodology that assumes taxes have no effect on the overall economy.

But I expect to hear similar arguments, expressed in a more strident fashion, if Republicans take prudent steps—starting with personnel changes—to modernize the JCT and CBO apparatus.

P.S. While tax cuts usually do lead to revenue losses, there is at least one very prominent case of lower tax rates leading to more revenue.

P.P.S. If the JCT approach is reasonable, why do the overwhelming majority of CPAs disagree? Is it possible that they have more real-world understanding of how taxpayers (particularly upper-income taxpayers) respond when tax rates change?

P.P.P.S. If the JCT approach is reasonable, why do international bureaucracies so often produce analysis showing a Laffer Curve?

There’s also some nice evidence from DenmarkCanadaFrance, and the United Kingdom.

Patrick J. Michaels

The 20th annual “Conference of the Parties” to the UN’s 1992 climate treaty (“COP-20”) is in its second week in Lima, Peru and the news is the same as from pretty much every other one.

You don’t need a calendar to know when these are coming up, as the media are flooded with global warming horror stories every November. This year’s version is that West Antarctic glaciers are shedding a “Mount Everest” of ice every year. That really does raise sea level—about 2/100 of an inch per year. As we noted here, that reality probably wouldn’t have made a headline anywhere.

The meetings are also preceded by some great climate policy “breakthrough.” This year’s was the president’s announcement that China, for the first time, was committed to capping its emissions by 2030. They did no such thing; they said they “intend” to level their emissions off “around” 2030. People “intend” to do a lot of things that don’t happen.

During the first week of these two-day meetings, developing nations coalesce around the notion the developed world (read: United States) must pay them $100 billion per year in perpetuity in order for them to even think about capping their emissions. It’s happened in at least the last five COPs.

In the second week, the UN announces, dolefully, that the conference is deadlocked, usually because the developing world has chosen not to commit economic suicide. Just yesterday, India announced that it simply wasn’t going to reduce its emissions at the expense of development.

Then an American savior descends. In Bali, in 2007, it was Al Gore. In 2009, Barack Obama arrived and barged into one of the developing nation caucuses, only to be asked politely to leave. This week it will be Secretary of State John Kerry, who earned his pre-meeting bones by announcing that climate change is the greatest threat in the world.

I guess nuclear war isn’t so bad after all.

As the deadlock will continue, the UN will announce that the meeting is going to go overtime, beyond its scheduled Friday end. Sometime on the weekend—and usually just in time to get to the Sunday morning newsy shows—Secretary Kerry will announce a breakthrough, the meeting will adjourn, and everyone will go home to begin the cycle anew until next December’s COP-21 in Paris, where a historic agreement will be inked.

Actually, there was something a little different in Lima this year: Given all the travel and its relative distance from Eurasia, COP-20 set the all-time record for carbon dioxide emissions associated with these annual gabfests.

Doug Bandow

WALLAY, BURMA—When foreign dignitaries visit Myanmar, still known as Burma in much of the West, they don’t walk the rural hills over which the central government and ethnic groups such as the Karen fought for; for decades. Like isolated Wallay village.

Wallay gets none of the attention of bustling Rangoon or the empty capital of Naypyitaw. Yet the fact that I could visit without risking being shot may be the most important evidence of change in Burma. For three years the Burmese army and Karen National Liberation Army have observed a ceasefire. For the first time in decades Karen children are growing up with the hope of a peaceful future.

The global face of what Burma could become remains Aung Sang Suu Kyi, the heroic Nobel Laureate who won the last truly free election in 1990—which was promptly voided by the military junta. The fact that she is free after years of house arrest demonstrates the country’s progress. The fact that she is barred from running for president next year, a race she almost certainly would win, illustrates the challenges remaining for Burma’s transformation.

The British colony gained its independence after World War II. The country’s short-lived democracy was terminated by General Ne Win in 1962. The paranoid junta relentlessly waged war on the Burmese people.

Then the military made a dramatic U-turn, four years ago publicly stepping back from power. Political prisoners were released, media restrictions were relaxed, and Suu Kyi’s party, the National League for Democracy, was allowed to register.

The U.S. and Europe lifted economic sanctions and exchanged official visits. Unfortunately, however, in recent months the reform process appears to have gone into neutral, if not reverse.

While most of the military battles in the east are over, occasional clashes still occur. None of the 14 ceasefires so far reached has been converted into a permanent peace. While investment is sprouting in some rebel-held areas, most communities, like Wallay, are waiting for certain peace and sustained progress.

Of equal concern, Rakhine State has been torn by sectarian violence, exacerbated by the security forces. At least 200 Muslims Rohingyas have been killed and perhaps 140,000 mostly Rohingyas displaced.

Political reform also remains incomplete. Particularly serious has been the reversal of media freedom and imprisonment of journalists. Khin Ohmar, with Burma Partnership, a civil society network, cited “surveillance, scrutiny, threats and intimidation.”

The 2008 constitution bars Suu Kyi from contesting the presidency. Arbitrarily barring the nation’s most popular political figure from the government’s top position would make any outcome look illegitimate.

Even economic liberalization has stalled. Much of the economy remains in state- or military-controlled hands.

In short, the hopes that recently soared high for Burma have crashed down to reality.

But U.S. influence is limited. Washington could reimpose economic sanctions. However, returning to the policy of the past would be a dead end.

Nor can the U.S. win further reform with more aid. Washington’s lengthy experience attempting to “buy” political change is exceedingly poor. Anyway, participation in the Western economies is worth more than any likely official assistance package.

The administration also hopes to use military engagement as leverage for democracy. Unfortunately, contact with America is not enough to win foreign military men to democracy.

As I wrote in Forbes online:  “The best strategy would be to work with Europe and Japan to develop a list of priority political reforms and tie them to further allied support and cooperation. These powers also should point out that a substantially larger economy would yield plenty of wealth for regime elites and the rest of the population, whose aspirations are rising.”

Finally, friends of liberty worldwide should offer aid and support to Burmese activists.

During his recent visit President Obama said:  “We recognize change is hard and you do not always move in a straight line, but I’m optimistic.” This still impoverished nation has come far yet has equally far to go. America must continue to engage the regime in Naypyitaw with prudence and patience.

Pages