Cato Op-Eds

Individual Liberty, Free Markets, and Peace
Subscribe to Cato Op-Eds feed

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

Over the next couple of days, as the Nor’easter honing in on the New England coast matures and eventually unleashes its winter storm fury, you are going to be subject to a lot of global warming hype.

After all, the climate change alarmist credo is: let no extreme weather event pass without pointing out that it is “consistent with” climate change caused by human industrial society.

The push has already begun.

But this time around, the pushback is also well-prepared.

While the “curator” of the Washington Post’s newly-minted online “Energy and Environment” section Chris Mooney tells us in his article that global warming may make blizzards worse by increasing the temperature of the western Atlantic ocean and thereby increasing the moisture feed into the developing storm, meteorologist Ryan Maue is quick to point out that just the opposite is likely the result—that the elevated sea surface temperatures actually act to make such storms tamer.

Maue goes on to add that it is “easy to make case that global warming weakened this blizzard significantly due to warmer [sea surface temperatures].”

While Ryan is probably being a bit optimistic here, the reality is that this blizzard (in fact pretty much all storm events) are the result of a very complex system of physical interactions—the precise behavior of each one of which is not completely understood, much less perfectly predictable. This makes ascertaining the influence of human-caused climate change virtually (if not entirely) impossible.

Blizzards affecting New York City are perfect examples of this.

A couple years back, during another New York City blizzard, we looked at some of the confounding factors at play in determining how much it snows in Central Park. Our conclusion after reviewing the cases for both more and less snowfall there?

 Which leaves natural variability as the primary driver of just how white New York City’s winters are.

Figure 1 will give you some idea of what we were talking about. It shows the winter snowfall history from New York’s Central Park since the late 1800s.

 

Figure 1. Winter snowfall totals from New York City’s Central Park.

Kudos to you if you can pick out the patterns formed by global warming. And if you can, please write them up for scientific publication somewhere. The world awaits the definitive answer.

In the meantime, don’t belive the hype.

 

 

Nicole Kaeding

The launch of HealthCare.gov in 2013 was a disaster. A new report from the Health and Human Services Inspector General (IG) describes how the department mishandled the website’s construction. The department failed to follow federal contracting rules, and did not have a cohesive plan for the website. This led to cost overruns and project delays, and HealthCare.gov’s eventually rocky start.

The Center for Medicare and Medicaid Services (CMS) was given primary responsibility within HHS for HealthCare.gov launch. For the report, the IG reviewed 60 CMS contracts for the project. These contracts were awarded to 33 different companies.

One problem with these contracts was not designating a single company as the project lead. According to the IG, CMS “missed the opportunity” to designate a “single point-of-contact with responsibility for integrating contractors’ efforts and communicating the common project goal to all 33 companies.” A project of this complexity needs a central command to oversee project development. CMS failed to assign one.  

Another problem was that CMS only sought bids from a small group of previously-used companies. CMS claimed this was to speed along the contracting process, but it left the agency with limited options. For instance, CMS received only four bids for one of the main contracts. Three were determined to be technically insufficient leaving CMS with only one choice, CGI Federal. In other instances, CMS only solicited or received bids from one company.

Additionally, CMS did not consider the previous contractor performance for many bids even though federal contracting rules require it. CMS did not access the main performance management database in the case of CGI Federal, which had had previous missteps with the department.

Compounding the mistakes, CMS selected contract types that put the government, not the contractor, at risk in the case of cost overruns for five of the six main contracts. Taxpayers are paying dearly for CMS’ choice. One contract grew from $58 million to $207 million. The six major contracts for HealthCare.gov grew in costs from $464 million to $824 million.

The IG summarized the findings:

When awarding the Federal Marketplace [HealthCare.gov] contracts, CMS did not meet all requirements and did not leverage all available acquisition planning tools, oversight activities, or contracting approaches to identify and mitigate risks…Because CMS did not leverage all of these tools, it operated without a comprehensive roadmap when awarding the Federal Marketplace contracts.

Construction of HealthCare.gov was a complex technical project. CMS’ mismanagement made the task even more difficult and even more expensive.  

Jason Bedrick

In 2012, New Hampshire launched a bold initiative to advance educational freedom: scholarship tax credits.

The New Hampshire Opportunity Scholarship Act grants business tax credits worth 85 percent of those businesses’ contributions to nonprofit scholarship organizations that fund low- and middle-income students to attend private or home schools. More than 100 students received scholarships in the first year and the results were remarkable.

In a survey of scholarship recipients, nearly 97 percent of families reported being satisfied with their chosen school, including 89.5 percent who were very satisfied. Just a few months into the school year, more than two-thirds reported seeing measurable improvement in their child’s academic achievement. This is especially impressive because the scholarship recipients were among the most disadvantaged in the state. More than nine out of ten scholarship recipients were from families that had a household income low enough to qualify for the federal “free and reduced-price lunch” program, about $43,568 for a family of four.

Yet despite all that, the scholarship tax credit law faced both a repeal effort in the legislature and a bitter lawsuit that went to the state’s highest court. The law survived both—much to the relief of the scholarship recipients—but not without doing great harm. During the period of uncertainty that the repeal effort and lawsuit created, donations to the Network for Educational Opportunity, the state’s sole scholarship organization, fell from about $130,000 to just over $50,000. The reduction in funds meant a significant reduction in the number of scholarship recipients, a drop from 103 to just 40.

In the second year’s scholarship recipient survey, 80 percent reported seeing measurable academic improvement in their child since participating in the scholarship program. It’s a shame that so few students had access to those scholarships. Opponents of the scholarships have vowed to bring another lawsuit and eight legislators are once again sponsoring legislation to repeal the law. The struggle for greater educational freedom continues.

Tonight at 8 p.m. EST, in celebration of National School Choice Week, the Cato Institute will present Live Free and Learn: Scholarship Tax Credits in New Hampshire, a short film detailing the struggle over New Hampshire’s scholarship law and some of the families it has touched. After the film, please join us live online and on Twitter at #CatoConnects for a discussion the politics, policy, and constitutionality of scholarship tax credit laws with former NH state senator Jim Forsythe, Institute for Justice Senior Attorney Dick Komer, and yours truly.

Families participating in New Hampshire’s pioneering scholarship tax credit program report near-universal levels of satisfaction because it enables them to choose the best educational fit for their children. Whatever parents are seeking for their children—improved academic performance, more engaged teachers, social acceptance, freedom from bullying, special needs programming, and so on—they are more likely to find it when they have more than one choice. Policymakers across the country who are seeking to expand the educational choices available in their state should look to New Hampshire as a model—then perhaps students from all states will have the opportunity to live free and learn.

Steve H. Hanke

J.P. Morgan Chase’s CEO Jamie Dimon has it right when he asserts that banks are “under assault.

This has put a damper on the source of 80 percent of the U.S. money supply, broadly measured. The CFS Divisia M4 is growing at an anemic 2.2 percent on a year-over-year basis.

Since the course of nominal national income is determined by the money supply, it’s not surprising that U.S. growth is also anemic. Final Sales to Domestic Purchasers, the best proxy for U.S. aggregate demand, has still not reached its trend rate of growth. In the face of these facts,

I don’t anticipate that the Fed will (or should), “tighten” at its Federal Open Market Committee meetings on January 27–28. Nor do I think the Fed will tighten as soon as most people think. 

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

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger. While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic. Here we post a few of the best in recent days, along with our color commentary.

In this week’s installment of You Ought to Have a Look, we take a look at the “climate” section of President Obama’s State of the Union address and highlight some reactions to it from around the web.

A bit of our own reaction is captured in this excellent video of Cato scholars’ responses to the SOTU. As a group, we ranged from being underwhelmed to being horrified.

Here is what the President had to say about the issue of climate change and what he is “doing about it”:

[N]o challenge—no challenge—poses a greater threat to future generations than climate change.

2014 was the planet’s warmest year on record. Now, one year doesn’t make a trend, but this does—14 of the 15 warmest years on record have all fallen in the first 15 years of this century.

I’ve heard some folks try to dodge the evidence by saying they’re not scientists; that we don’t have enough information to act. Well, I’m not a scientist, either. But you know what—I know a lot of really good scientists at NASA, and NOAA, and at our major universities. The best scientists in the world are all telling us that our activities are changing the climate, and if we do not act forcefully, we’ll continue to see rising oceans, longer, hotter heat waves, dangerous droughts and floods, and massive disruptions that can trigger greater migration, conflict, and hunger around the globe. The Pentagon says that climate change poses immediate risks to our national security. We should act like it.

That’s why, over the past six years, we’ve done more than ever before to combat climate change, from the way we produce energy, to the way we use it. That’s why we’ve set aside more public lands and waters than any administration in history. And that’s why I will not let this Congress endanger the health of our children by turning back the clock on our efforts. I am determined to make sure American leadership drives international action. In Beijing, we made an historic announcement—the United States will double the pace at which we cut carbon pollution, and China committed, for the first time, to limiting their emissions. And because the world’s two largest economies came together, other nations are now stepping up, and offering hope that, this year, the world will finally reach an agreement to protect the one planet we’ve got.

Immediately afterwards, climate/political scientist Roger Pielke Jr. sent out a few pointed tweets:

Over at American Energy Alliance (AEA), whose mission statement reads, in part, “to enlist and empower energy consumers to encourage policymakers to support free market policies,” their take was laid out in a blog piece titled “Obama’s SOTU: the Good, the Bad, and the Forgotten,” and summed up as:

In his 2015 State of the Union address, President Obama referenced booming domestic energy production and low gas prices. Unfortunately, the U.S. has more abundant and affordable energy despite the president’s policies, not because of them. While America’s energy innovators are producing record amounts of oil and natural gas on state and private lands, output on federal lands has been dropping for years. Meanwhile, the president’s costly climate agenda would make energy more expensive for all Americans, particularly minorities and low-income households. A positive vision for energy prosperity lies with America’s energy producers and American families, not with President Obama’s policies.

Be sure to stop by to see what AEA found in the president’s address that was good, bad, and what he left out.

But perhaps, when it comes to climate science, Judy Curry, in her blog post “Raw Politics of Climate Change in the U.S.,”  said it best. Curry seemed to be taking a page right out of our playbook (see highlighted section, our emphasis):

So what is wrong with President Obama’s statements as cited above?

  • His statement about humans having exacerbated extreme weather events is not supported by the IPCC.
  • The Pentagon is confusing climate change with extreme weather.
  • ‘Climate change is real’ is almost a tautology; climate has always changed and always will, independently of anything humans do.
  • His tweet about ‘97%’ is based on an erroneous and discredited paper [link].
  • As for ‘Denial from Congress is dangerous’, I doubt that anyone in Congress denies that climate changes. The issue of ‘dangerous’ is a hypothetical, and relates to values (not science).

The apparent ‘contract’ between Obama and his administrators to play politics with climate science seems to be a recipe for anti science and premature policies with negative economic consequences that have little to no impact on the climate.

Maybe some day, in a future administration, we can have a grown-up conversation about climate change (natural and human caused), the potential risks, and a broad range of policy responses.

Well put, Dr. Curry.

David Boaz

I’ve written before about the propensity of journalists to declare modest budget cuts—or reductions in the rate of growth of government spending—in apocalyptic terms such as “slashing” and “draconian.” I was thus amused by this line in a Washington Post editorial today:

Mr. Hogan is slashing those payments by half, which will mean cuts approaching 1 percent to the school budgets of both Montgomery and Prince George’s counties.

The editorial is generally sympathetic to budget cuts proposed by the new governor of Maryland, and of course the “extra funding from Annapolis mainly to cover higher teacher salaries” may actually be subject to larger cuts. Still, when the impact on the county school budget is “approaching 1 percent,” I’d think “slashing” is, well, overkill.

K. William Watson

President Obama has proven once again that he is his own worst enemy on trade policy. Despite expectations that he would make a strong push for trade promotion authority (TPA), President Obama offered only quick mention of trade in this week’s State of the Union address. 

Although he did ask Congress to pass TPA to help him complete free trade agreements, the president backed up that request with some of the weakest arguments possible. I’ll give you the entire two paragraphs here:

21st century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.

Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense. But 95 percent of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities. More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China. Let’s give them one more reason to get it done.

This is essentially a protectionist argument in favor of trade agreements. According to the president, the trade agreements his administration is negotiating will protect American workers from (1) China, (2) unfair competition, and (3) outsourcing. They’ll level the playing field and bring back jobs to America. 

Isn’t that what tariffs and subsidies are for?!

Free trade and free trade agreements are meant to open up the U.S. economy to foreign competition and opportunity. The result is economic growth, innovation, better quality of life, more jobs, higher wages, and international peace. President Obama could have based his argument on any one of those rationales. He instead chose to talk about who makes the rules. I suppose it shouldn’t surprise anyone that this president thinks economic success comes from government writing the best rules.

At the core of this focus on rules is the call for enforcement. The president says “we’ve gone after countries that break the rules at our expense.” He may be referring to bringing cases at the World Trade Organization, where the United States has won nine cases, mostly against China, since Obama took office. During that same period the United States lost 15 cases brought by other members—we are a notorious trade scofflaw, even when we write the rules. Ironically, the most common way the United States breaks the rules is through abusive antidumping measures, which technically count as part of Obama’s “enforcement” efforts. Sometimes, though, breaking the rules simply means selling lots of goods at low prices. For example, in a past address President Obama touted actions taken to protect the U.S. tire industry from mundane Chinese competition.

This enforcement rhetoric appeals to the ranks of trade-skeptic Democrats who routinely use foreign rule-breaking as an excuse for protectionism and a reason to oppose trade agreements. 

From the Hill:

Rep. Joseph Crowley (N.Y.), the vice chairman of the House Democratic Caucus, has supported some trade deals but was quick to acknowledge the divisions. 

“There’s a great deal of skepticism within our caucus because of a lack of enforcement,” he said. 

To Obama’s credit, perhaps knowing that the president is also a protectionist will convince some of those Democrats to support his trade agenda.

I doubt our negotiating partners overseas find the president’s “pitch” at all reassuring. Calling our trade partners cheaters who need to be reined in with new rules that benefit American companies and keep jobs in America is what protectionists do when arguing against free trade. It is a sad and cynical way to promote free trade agreements. 

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

When it comes to opinions about climate change, there have traditionally been two main camps: either you think human activities are warming the climate at a pace that will largely outstrip our ability to adapt and therefore we must take strong and immediate action to try to mitigate it, or, you think climate change is entirely natural and that human activities play virtually no role. But a new, more moderate group is emerging, one colloquially known as the “lukewarmers”—folks who acknowledge a human role in climate change, but who think that the resulting change will be moderate, will remain well within our abilities to adapt, and question the need for actions to mitigate future change in lieu of other, more pressing issues (issues that will go a long way toward improving our adaptive response).

Lukewarmers often find themselves nearly friendless, as neither of the major groups looks favorably on their outlook. “Rational Optimist” Matt Ridley recently took us through his experiences as a lukewarmer—and they weren’t particularly pretty. We’ve had similar experiences ourselves.

But perhaps times are changing.

Yesterday, the U.S. Senate held votes on three different amendments—each climate-related—to be attached to the bill they are currently discussing. That bill aims at wresting the long overdue decision on the Keystone XL pipeline from the State Department, and instead give a congressional green light to the project. (The House as already passed a bill doing the same.) The outcome of the votes seemed to give indication that the Senate was starting to favor the “lukewarming” stance on climate change.

First off, in a vote of 98-1, the Senate found that “climate change is real and it was not a hoax.” Good start!

Then, the Senate pretty much split down the middle, in a 50-49 vote, whether “human activity significantly contributes to climate change,” thus defeating the amendment (which needed 60 votes to pass). The vote was pretty much down party lines, with five Republicans casting a “yea” vote along with all the Democrats. The word “significantly” has so many different meanings that unless you were in the first camp described in our opening paragraph, you would have to vote no, just to be on the safe side (when it comes to protecting yourself from being misconstrued).

Finally, there was a third vote, on an amendment that was pretty similar to the previous one, but left out the word “significantly.” In doing so, it became something to which the lukewarmers in the chamber could warm. The vote this time was 59-40, including 15 Republican “yea” votes. Again, because of the 60-vote requirement, that meant the amendment failed, but only by the slimmest of margins.

Obviously, the Senate is not there yet—far too many Democrats continue to be at the same time optimistic that the predictions from failing climate models will somehow change course and turn out to be true, while being pessimistic about our ability to adapt to what changes may come. And too many Republicans remain aloof to the fact that we as a species can (and do) exert an effect on the global climate. But the middle road—the lukewarmers’ way—is picking up some travelers.

We welcome the company.

George Selgin

If there’s anything we ought to have learned from the recent boom and bust, it’s that a Fed commitment to keep interest rates low for any considerable length of time, like the one Greenspan’s Fed made in 2003, is extremely unwise. 

The problem isn’t simply that interest rates should be higher, or that the Fed should have a different plan for how it will adjust them in the future.  It’s that the Fed shouldn’t be making promises about future interest rates at all, because it can’t predict whether a rate chosen today will be consistent with stability in six months, or in one month, or even in a week.

Instead of making promises about future interest rates, the Fed should promise to change its interest rate target whenever doing so will serve to maintain a reasonable level of nominal spending or nominal gross domestic product, which is the best way to avoid causing either a boom or a bust.

Emma Ashford

The last few days have brought dramatic news from Yemen: rebels occupied the presidential palace, initially forcing constitutional concessions and then the resignation of President Hadi. The president was, at least nominally, a U.S. ally, cooperating with U.S. forces on drone strikes against Al Qaeda in Yemen (AQAP). Yemen itself had even been hailed as one of the few successes of the Arab Spring, with a negotiated transition resulting in steps towards democracy. But such an interpretation glosses over Yemen’s long history of instability, as well as intervention by foreign powers. The current conflict is not only a popular uprising, it’s a proxy war, one which has been worsened by U.S. policy in Yemen.

Yemen has experienced chronic instability throughout its history, in large part due to interference from Saudi Arabia, which has long been worried about Yemeni influence. The first Saudi King, Abdulaziz, is reputed to have called his senior sons to his deathbed, admonishing them to ‘keep Yemen weak.’ The Kingdom has at various times provided funds not only to the Yemeni government, but also to various opposing tribal leaders.

The most recent iteration of Yemeni instability is a decade-long civil conflict between the Saudi-backed Yemeni government, Sunni militias, and a Zaidi Shi’a militia group known as the Houthis. This latter is also known as the Shabaab al-Marmineen (or the Believing Youth), and is believed to receive large quantities of funding and arms from Iran (and formerly Syria). The insurgency has spanned a decade, with only sporadic ceasefires, resulting in widespread death and displacement. The Houthis even initiated cross border attacks against Saudi Arabia in 2009, which led to a large-scale Saudi invasion of Northern Yemen.

The Houthis were also heavily involved in the 2011 protests against Yemeni dictator Ali Abdullah Saleh, although they rejected the Saudi-negotiated transfer of power to Vice President Hadi. Since late last year, the Houthis have controlled large parts of the capital Sanaa, although power has remained nominally vested in the hands of the Hadi government.

The crisis in Yemen is thus not only a civil conflict, but also a proxy conflict between Saudi Arabia and Iran. In this, it is similar to the early Syrian civil war, which was initially driven by Saudi support for rebel groups and Iranian support for the Assad regime. While the situation in Yemen is unlikely to deteriorate in this way, it is worth focusing on the fact that many conflicts in the Middle East are actually driven by larger regional actors, some of them U.S. allies.

U.S. involvement in Yemen has also helped to worsen this crisis. The Hadi government’s support for U.S. drone strikes against AQAP contrasts strongly with Yemeni popular opinion, which has been widely outraged by the killing of innocents. Such unfortunate killings are driven by U.S. reliance on Yemeni targeting data: Yemeni leaders have a tendency to present political rivals as terrorists in order to engineer their demise. These deaths have driven growing anger at the Hadi government.

Ironically, the Houthi fighters are themselves strongly opposed to AQAP, and actively engage in combat against the group. There is even evidence that the United States has cooperated with the Houthis on targeting AQAP.

The situation in Yemen remains fluid. The country appears to have no leader, and it is unclear whether the Houthi occupation of the capital constitutes a coup or not. But in either case, the United States should stay out of the conflict. Evacuate the embassy if Sanaa becomes too dangerous. The crisis in Yemen is typical of the country’s long-running instability, and the pressures it faces from regional powers. U.S. involvement won’t help.

Kat Murti

On Tuesday night, President Obama delivered his sixth annual State of the Union address. Cato scholars took to Twitter to live-tweet not only the President’s address, but also the Republican and Tea Party responses—delivered by Sen. Joni Ernst and Rep. Curt Clawson respectively—focusing, as always, on what the policies being discussed would mean for the future of liberty. 

Many on Twitter joined the discussion, which was billed as a chance to ask experts what to expect from the policy world in 2015; the hashtag #CatoSOTU has been used over 4,400 times since Tuesday, a number which will likely continue to grow as Cato scholars and members of the public continue the online conversation. 

 

 

 

Over the years, the State of the Union has become an annual spectacle much larger than the founding fathers would ever have expected, and Cato scholars were quick to put it in context:  

   

Topics spanned the gamut—from cybersecurity and Guantanamo Bay to the President’s community college proposal and what he has termed “middle class economics”—but Cato responses remained strong throughout.  

Cato’s policy analysts were quick to call out factual inaccuracies:

 

 

 

And hypocrises:  

 

 

  

 They highlighted omissions: 

  

And, even, doled out praise where it was due: 

The conversation certainly wasn’t one-sided however. Cato scholars were just as critical of the response speeches as they were of the President’s address:

  

  

 

 

Many Cato scholars also took the opportunity to make policy suggestions to the President and the legislature:

  

 

At the end of the night though, Cato Institute Executive Vice President David Boaz probably summed it up best: 

 

Looking for even more reactions? Watch our annual State of the Union response video

Steve H. Hanke

Every country aims to lower inflation, unemployment, and lending rates, while increasing gross domestic product (GDP) per capita. Through a simple sum of the former three rates, minus year-on-year per capita GDP growth, I constructed a misery index that comprehensively ranks 108 countries based on “misery.”

Below the jump are the index scores for 2014. Countries not included in the table did not report satisfactory data for 2014.

The five most miserable countries in the world at the end of 2014 are, in order: Venezuela, Argentina, Syria, Ukraine, and Iran. In 2014, Argentina and Ukraine moved into the top five, displacing Sudan and Sao Tome and Principe.

The five least miserable are Brunei, Switzerland, China, Taiwan, and Japan. The United States ranks 95th, which makes it the 14th least miserable nation of the 108 countries on the table.

Walter Olson

Rumors of ethics problems have long swirled around long-time New York assembly speaker Sheldon Silver, many of them connected with his role as a private lawyer associated with a personal-injury firm whose interests extend to many government- and policy-related matters. This morning, according to multiple reports, the FBI took Silver into custody following a corruption investigation. 

The complaint (courtesy WSJ, more here and here) alleges improprieties with Silver’s income both from a real estate law firm patronized by developers and from asbestos-injury legal work. On the latter, it alleges that Silver directed hundreds of thousands of dollars in state research money to a university doctor in Manhattan, and that the doctor referred lucrative cases over asbestos-related mesothelioma to Silver’s law firm. The doctor is described as a “well-known expert” who “conducts mesothelioma research” at a center at his university dedicated to that purpose. The unnamed “Doctor-1” “has entered into an agreement with the USAO SDNY [U.S. Attorney’s Office for the Southern District of New York] under which he will not be prosecuted for the conduct described herein, and that obligates him to provide truthful information to and cooperate with the government.” [pp. 24-25]

As science has grown more dependent on government funding, libertarians have warned that the money isn’t really free. Whatever the stated intentions at first, legislators come to scrutinize science budgets with an eye toward what’s in it for them: promoting a favored policy initiative, catering to the whims of some constituent or family member, employing the right people in the right districts. And how deeply embarrassing it must be – assuming the truth of the prosecutors’ allegations, which of course are at this stage unproven – to support one’s work through state grants for medical research while quietly referring patients to the assembly speaker’s law firm. According to the complaint, the state paid $500,000 to the research center, while the asbestos-suit referrals brought Silver more than $3 million.

There must be a better way to fund scientific inquiry, and maybe that way involves less appropriation of tax moneys and more voluntary action. [adapted in part from a post at Overlawyered]

Craig D. Idso

One of the major concerns with forecast CO2-induced global warming is temperatures might rise so rapidly that many plant species will be driven to extinction, unable to migrate fast enough toward cooler regions of the planet to keep pace with the projected warming. The prospect of species demise and potential extinction have served as a rallying cry in calls for restricting CO2 emissions. But how much confidence should be placed in this climate-extinction hypothesis? Do real world data support these projections? Are plants really as fragile as model projections make them out to be? 

A new paper published in the research journal Botany investigates this topic as it pertains to sugar maple trees, and the findings do not bode well for climate alarmists. In this work, Hart et al. (2014) analyzed “the population dynamics of sugar maple (Acer saccharum Marsh.) trees through the southern portion of their range in eastern North America,” selecting this particular species for this specific task because its range “has been projected to shift significantly northward in accord with changing climatic conditions” by both Prasad et al. (2007) and Matthews et al. (2011).

The three U.S. researchers

analyzed changes in sugar maple basal area, relative frequency, relative density, relative importance values, diameter distributions, and the ratio of sapling biomass to total sugar maple biomass at three spatial positions near the southern boundary of the species’ range using forest inventory data from the USDA Forest Service’s Forest Inventory and Analysis program over a 20-year observation period (1990-2010),” during which time temperatures increased and summer precipitation declined.  

And what did they discover?

Range expansion (!). Hart et al. write that,

In contrast to a contraction of the sugar maple range, our results corroborate the pattern of increased mesophyte (including sugar maple) density and dominance that has been widely reported throughout the Central Hardwood Forest of the eastern US, including sites near the southern range boundary (e.g., Hart and Grissino-Mayer, 2008; Hart et al., 2008; Schweitzer and Dey (2011).

Or put another way, they say the results of their study indicate that (1) “over the past 20 years, the southern range boundary of sugar maple has neither contracted nor expanded,” and that (2) “when accounting for documented northern range boundary shifts (Woodall et al., 2009), these results indicate an expansion of the geographic distribution for sugar maple at this time attributed to the relatively stable southern range boundary.”

Clearly, the rise in temperature and decline in precipitation observed across the study area has had no negative impact on sugar maple populations, despite model projections to the contrary.  Rather, the observed response has been positive, and largely so as evidenced by increased sugar maple density, dominance and range expansion. To most rational people, these observations represent benefits. To climate alarmists, they are problematic, inconvenient truths which they tend not to  acknowledge.

References

Hart, J.L. and Grissino-Mayer, H.D. 2008. Vegetation patterns and dendroecology of a mixed hardwood forest on the Cumberland Plateau: implications for stand development. Forest and Ecology Management 255: 1960-1975.

Hart, J.L., Oswalt, C.M. and Turberville, C.M. 2014. Population dynamics of sugar maple through the southern portion of its range: implications for range migration. Botany 92: 563-569.

Hart, J.L., van de Gevel, S.L. and Grissino-Mayer, H.D. 2008. Forest dynamics in a natural area of the southern ridge and valley, Tennessee. Natural Areas Journal 28: 275-289.

Matthews, S.N., Iverson, L.R., Prasad, A.M. and Peters, M.P. 2011. Changes in potential habitat of 147 North American breeding bird species in response to redistribution of trees and climate following predicted climate change. Ecography 34: 933-945.

Prasad, A.M., Iverson, L.R., Matthews, S. and Peters, M. 2007. A Climate Change Atlas for 134 Forest Tree Species of the Eastern United States. Northern Research Station, USDA Forest Service, Delaware, Ohio, USA.

Schweitzer, C.J. and Dey, D.C. 2011. Forest structure, composition, and tree diversity response to a gradient of regeneration harvests in the mid-Cumberland Plateau escarpment region, USA. Forest and Ecology Management 262: 1729-1741.

Woodall, C.W., Oswalt, C.M., Westfall, J.A., Perry, C.H., Nelson, M.D. and Finley, A.O. 2009. An indicator of tree migration in forests of the eastern United States. Forest and Ecology Management 257: 1434-1444.

Doug Bandow

North Korea has been in a conciliatory mood recently, suggesting a summit with South Korean President Park Geun-hye.  Pyongyang also indicated that it would suspend nuclear tests if the United States cancelled joint military exercises with the South. 

The United States refused and went ahead with the naval maneuvers.  In fact, the Obama administration recently expanded sanctions on North Korea in response to the Kim regime’s apparent hacking of Sony pictures.  Alas, past experience suggests the Democratic People’s Republic of Korea likely will respond with new provocations, perhaps another nuclear test.

Frustration with the Kim regime led retired Gen. John Macdonald to propose turning the movie ‘The Interview’ into reality:  “We’ve got to do something.”

Since Pyongyang hasn’t changed its behavior, the United States should try a different approach, but not an assassination attempt on Kim Jong-un.  Washington should start by dropping the annual military exercise and reducing America’s military presence.  The administration also should develop a comprehensive engagement plan for North Korea.

Obviously, there’s no guarantee that engagement would yield a more positive result.  However, the People’s Republic of China’s growing frustration with the younger Kim provides an unexpected opportunity for Washington. 

So far, Beijing has proved unwilling to apply significant pressure on the DPRK lest the result be a messy collapse with advantage to a united Korea allied with America.  But China has tired of the antics of its irresponsible neighbor, especially the latter’s nuclear weapons program. 

The PRC nevertheless remains reluctant to cooperate with Washington unless the United States reduces the perceived threat to North Korea.  The United States should express its willingness to negotiate with the North, and even create a low-key diplomatic presence, such as a small consular office. As I point out in National Interest:  “Whatever the North’s response, the U.S. would gain a useful window into a mysterious political system and provide the Kim regime with something to lose for bad behavior.”

Equally important, Washington should work with the Republic of Korea and Japan to prepare an offer for full engagement.  North Korea would receive diplomatic recognition and economic benefits.  The United States would withdraw its troops from the ROK and drop future military exercises.  And the three governments would pledge not to push regime change.  In return, Pyongyang would end its nuclear program, turn over existing nuclear materials, and accept a verification system.

In the unlikely event that the North agreed, the deal would benefit all Northeast Asia.  If DPRK said no, the United States would have greater leverage with China. 

Washington could point out that it had followed Beijing’s advice.  If the PRC was serious about promoting peace over the long-term on the peninsula, it would apply progressively greater pressure on North Korea to negotiate a satisfactory agreement. 

Should China fail to act, it would be clear that they planned to remain part of the problem.  The United States could plan accordingly. 

North Korea targets America only because U.S. troops confront the DPRK.  Otherwise, Pyongyang would have little reason to consider Washington.  It would be best for America to back away from the peninsula by withdrawing U.S. forces and terminating the formal defense guarantee, leaving the South responsible for its own defense. 

American officials also should stop reaffirming America’s nuclear umbrella over the region.  Nuclear non-proliferation in Northeast Asia has turned into an unfortunate variant of gun control at home: only the bad guys have guns. 

It is not in the interests of the American people to be stuck in the region’s nuclear tangle.  Moreover, stepping back, thus creating the prospect of South Korean and Japanese bombs, would be the most effective way to push Beijing into taking a more active role in discouraging a North Korean arsenal.

Pyongyang wants to talk and the United States should talk with them.  Washington has little to lose and possibly something to gain.

Christopher A. Preble

In a speech at the American Enterprise Institute yesterday, House Armed Services Committee Chairman Mac Thornberry lamented the effects of the Budget Control Act’s spending caps: “the plummeting readiness levels, the long lines of equipment in disrepair, the jets that aren’t flying, and the soldiers who aren’t practicing at the rifle range.” These are problems, to be sure. The bigger problem is a general trend that has the Pentagon spending more, and getting less.

Consider the chart below, prepared by my colleague Travis Evans. Following World War II, the United States did what it had always done at a wars’ end: it demobilized. The result was a sharp and sudden decline in both military manpower and funding. From 1948 to 1950, Pentagon spending averaged $187 billion per year (all figures in 2015 dollars). Demobilization was short-lived, however. As the British and French empires retrenched and the Soviet Union expanded, the United States assumed the role of communist counterweight. Then North Korea invaded South Korea, and all hell broke loose. The primary beneficiary of the strategic shift was the Pentagon, whose budget increased by 156 percent in just one year, from $198 billion in 1950 to $508 in 1951. Large defense budgets became the norm, with spending even after the Korean armistice well above the pre-war levels.

All told, Pentagon spending averaged $458 billion per year throughout the Cold War (1948-1990). That figure includes funding for wars in Korea and Vietnam, as well as for the 1980’s arms buildup. Pentagon spending decreased steadily following the fall of the Berlin Wall, only to ramp back up as the United States embarked on the current round of post-9/11 wars. Defense budgets under Bush the younger averaged $601 billion per year, while his successor has presided over annual budgets averaging $687 billion between 2009 and 2014. Indeed, President Obama, who was elected during an economic crisis, will leave office having approved more military spending than any presidential administration in the nuclear era. Not too bad for a president who is often accused of trying to gut the military.

To be sure, Obama inherited large and rising Pentagon budgets, and pledged to end the costly Iraq war (even as he ramped up the Afghan one – and started several others). He might have wished to dedicate even less to the Pentagon, and more to his domestic spending hobby-horses, were it not for Republicans in Congress who wouldn’t let him. Similarly, one can easily surmise that military spending under either a President John McCain or a President Mitt Romney would have been higher than what we’ve seen under Obama. But they, too, would eventually have had to contend with the messy fiscal reality: to wit, we’re broke.

The bipartisan Budget Control Act, and the dreaded sequester that it contained, may have been an elaborate gimmick either to trick Republicans into increasing taxes, or convince Democrats to approve cuts in the true drivers of fiscal imbalance: so-called entitlements. But while the BCA achieved neither of those things, it is (or at least was) bipartisan; and it has limited discretionary spending. The BCA has not, however, resulted in a precipitous decline in military spending relative to where we were a generation ago.

Less bang for the buck should not be used as an excuse for raising taxes, blowing up the deficit, or reneging on modest and sensible spending caps. If the Pentagon is getting less for every dollar spent, that is an argument for reforming bad practices – including eliminating excess base capacity, reducing the Pentagon’s bloated civilian workforce, and fixing an acquisition system that consistently delivers products late (if at all) and over budget.

David Boaz

At the National Interest, I critique the president’s State of the Union speech:

Instead, we got a sweeping vision of a federal government that takes care of us from childhood to retirement, a verbal counterpart to the Obama campaign’s internet ad about “Julia,” the cartoon character who has no family, friends, church or community and depends on government help throughout her life. The president chronicled a government that provides us with student loans, healthcare, oil and the Internet.

The spirit of American independence, of free people pursuing their dreams in a free economy, was entirely absent. Indeed, the word “freedom” appeared only once in the speech.

I wasn’t so impressed with the “middle-class economics” he laid out:

The president wants more and better jobs. And yet he wants to raise taxes on the savings and investment that produce economic growth and better jobs. And he proposes a higher minimum wage, which would cost some low-skilled workers their jobs. Those proposals are not well thought out….

The president spoke a lot about the future. He mentioned Social Security, Medicare and Medicaid. And he twice boasted of shrinking deficits. But he never addressed the elephant in the room: The deficit is about to head back up, reaching $1 trillion in a few years. The national debt is $18 trillion and still growing. Worse, those entitlements programs have an unfunded liability of around $90 trillion. What’s his plan to avert an unprecedented financial crisis a few years after he leaves office? He didn’t say, because he has no plan.

Things got a little better when he turned to foreign policy:

When he turned from economics, the president offered a bit more to libertarian-minded voters. He said that we don’t want to be “dragged into costly conflicts that strain our military and set back our standing” or “dragged into another ground war in the Middle East.” He said that “when the first response to a challenge is to send in our military, then we risk getting drawn into unnecessary conflicts, and neglect the broader strategy we need for a safer, more prosperous world.” Music to noninterventionist and realist ears.

But the reality is somewhat different. He has officially ended the wars in Afghanistan and Iraq, but American troops remain in both countries, which are hardly experiencing postwar tranquility. He has bombed seven countries, three more than President Bush. We are getting more deeply entangled in a new war in Iraq and Syria, without congressional authorization. Obama asked Congress to “pass a resolution to authorize the use of force against ISIL. We need that authority.” Really? He hasn’t shown any need for it these past six months. Nor did he ask for authorization to wage war in Libya. The senator who said in his 2008 campaign, “The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation,” has become a president who acts as if he does.

I also found an opportunity to praise his promises on Cuba, criminal justice reform, and the dignity of every citizen. But I concluded:

Early in the speech the president said, “We need to set our sights higher than just making sure government doesn’t screw things up, the government doesn’t halt the progress we’re making. We need to do more than just do no harm.” Please, just do no harm. Americans will make plenty of progress if government doesn’t interfere. 

William Poole

Here is the statement I would like to see the Federal Open Market Committee issue on January 28 on conclusion of its first meeting of 2015:

Information received since the FOMC met in December confirms that economic activity is expanding at a moderate pace. Inflation has continued to run below the Committee’s longer-run objective, primarily reflecting a decline in energy prices. That decline appears to be principally a consequence of improving technology in oil and natural gas production and is, thus, a change in relative prices that has no long-term implications for the aggregate rate of inflation.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. To support continued progress toward these goals, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate.

To minimize uncertainty over the course of policy, the Committee judges that the process of normalizing interest rates should begin in June. However, the exact timing is data dependent and might be adjusted as necessary.

The Committee also judges that it is now appropriate to begin the process of normalizing its open market portfolio. Effective immediately, the Federal Reserve will cease to reinvest interest on the portfolio and maturing principal.

Several FOMC members have suggested that midyear will be the appropriate time to begin to raise policy rates. The FOMC itself has been vague. No member of the leadership team–which I would define as Chair Janet Yellen, Vice Chair Stanley Fischer, and William Dudley, President Federal Reserve Bank of New York–has ruled out the midyear timing. In general, it is not good practice to announce a future date for a policy change, but such an approach makes sense at this time given that policy rates have been near zero since December 2008. Announcing a June date will not be a shock to the market, as market commentary widely suggests that June is the time the FOMC will act. It is, of course, always possible that economic conditions will change dramatically before June, requiring a change of plan. Nonetheless, it is time for the FOMC to clear the air by stating a plan.

By beginning the process of letting the portfolio run off, the FOMC will dispose of that issue. This part of the plan should not be subject to revision, because any revision would send a confused signal about the direction of policy. If the portfolio is left to a future decision, the matter will become entangled with signals about future interest-rate policy. Dealing with the problem of defining the appropriate course of policy rates and helping to set corresponding market expectations on that course will be difficult. The FOMC does not need to complicate interest-rate policy with implicit announcements—possibly intended, possibly not—flowing from decisions on the portfolio.

The U.S. economy is growing in a balanced fashion. Employment growth has exceeded most forecasts from a year ago. Inflation is below the two percent target but will rise once oil prices stop falling. Treasury and corporate bond rates are almost 100 basis points below where they were a year ago. The stock market has been volatile day-to-day but without a clear trend.

It would be easy to recite additional data. but the bottom line is that the economy is doing fine and is not fragile. The FOMC is unlikely to face more benign circumstances in which to address its policy challenges than it faces today. The Committee should act in a preemptive fashion, leading the markets rather than being led by them.

Further FOMC patience on policy is indecision on leadership. What is the Committee waiting for?

My statement does away with statement bloat—the profusion of meaningless sentences and phrases that, over the past few years, have made the FOMC statement increasingly long, obscure, and difficult to interpret. The final policy statement of the Greenspan era contained 120 words, excluding the final paragraph reporting the vote. Measured the same way, a year before Bernanke left office, the January 2012 statement contained 348 words. The final statement of the Bernanke era contained 563 words. The December 2014 FOMC statement had 564 words.

My statement has 190 words. It is longer than the last Greenspan statement for two reasons. First, it makes the important point, which the FOMC has not yet made, that the decline in energy prices reflects a relative price change with minimal significance for long-run inflation. Second, it announces the policy decision to begin to wind down the portfolio. There would be no need to repeat this language in future statements unless that decision were changed.

Every word in the statement ought to convey useful information to the markets. The Committee seems to have lost sight of the fact that the market reads each statement for changes against prior statements. It used to be that observers would print the statement and hold it up to the light against the previous statement. Now we rely on powerful features in the word processor to spot the changes. Even that approach fails when the Committee changes the order of sentences, or similar sentences. We can spot word changes where a synonym is substituted for a word in the prior statement but that often creates mystery. Synonyms rarely have exactly the same meaning, but differ in nuance or some other way. The question then is whether the FOMC is trying to send a signal of some sort, or has decided for stylistic reasons to change words. The Committee’s current approach is not a recipe for clarity.

Perhaps the policy statement has grown because the Committee is attempting to provide a summary on policy, very broadly defined. That cannot be done in a few paragraphs. The summary as it stands is a profusion of platitudes.

Consider a couple of examples. The December 2014 statement says, “… the Committee judges that it can be patient in beginning to normalize the stance of monetary policy. The Committee sees this guidance as consistent with its previous statement … .” If there is no change in policy, then why change the language? In this same statement, we learn that, “The Committee continues to monitor inflation developments closely.” Isn’t that something we already know?

Here is a sentence in the December statement that does provide information: “The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.” However, this sentence is also a trap. When the time comes in the future to take the sentence out of the statement, doing so will be read as a signal of forthcoming rate increases. Will that be a sound way of sending such a signal? Or, does the FOMC simply leave the sentence in the statement until it becomes irrelevant?

The Committee has set such traps for itself in the past. There are many examples. Here is one of my favorites: “Although the downside risks to growth have increased somewhat, the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected.” (From statement issued on August 7, 2007) The statement language would seem to indicate that the FOMC was trying to tell the market that the next policy adjustment might be an increase in the fed funds target rate. The transcript of that meeting is publically available, along with staff documents. From these, it is clear that no member of the Committee was advocating a rate increase, or a signal of a rate increase. The markets were shaky, and this was the beginning of the financial crisis.

Why was this language in the August 7, 2007 statement? A year earlier, in August 2006, the FOMC ended its string of 17 straight fed funds rate increases. However, the Committee did not want to signal to the market that the job was done. Thus, this sentence: “Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.” Similar language appeared in every statement until the financial crisis started to become acute, shortly after the meeting of August 7, 2007. The Committee did not want to take such language out for fear of sending a signal that it was preparing to reduce rates.

Going forward, the Committee will have to deal with its current posture that, “… economic conditions may … warrant keeping the target federal funds rate below [normal] levels … .” Moreover, this language may become inconsistent with FOMC economic projections published after meetings of March, June, September and December. What the Committee ought to do is to remove this trap from its statement language and let its quarterly projections carry the burden.

The statement I propose has the virtue of addressing all these matters. It is short and focused on changes in the stance of policy. It contains the decision to begin to address the winding down of the Fed’s huge portfolio—it gets that issue out of the way. It announces a tentative decision to begin normalizing interest-rate policy in June, which corresponds to the stated views of several FOMC members and widespread market expectation. By shortening the statement dramatically, the approach clears away underbrush and will make future communication easier.

Doug Bandow

One of Washington’s greatest policy failures is North Korea.  Apparently, Pyongyang’s most recent provocation was hacking Sony Pictures in retaliation for the movie ‘The Interview.’  More fundamentally, the Democratic People’s Republic of Korea remains determined to create a sizeable nuclear arsenal.

Successive administrations have sought China’s aid to restrain the DPRK, but have failed to listen to Beijing while lobbying Chinese officials for their support.  If Washington hopes to win support from the People’s Republic of China, American policymakers must respond to the PRC’s concerns.

Understandably distrustful of Pyongyang, the United States has insisted upon de-nuclearization before delivering substantial aid to the North.  However, when approached by Washington for assistance, China has responded by blaming America for creating a sense of insecurity which encouraged the DPRK to develop nuclear weapons. 

In 2013, Wang Jiaru, head of the Chinese Communist Party’s International Department, met with several China specialists in Beijing.  I asked him about North Korea.  He criticized the United States and South Korea for contributing to increased tensions through such policies as regular military exercises.  He contended that while “the United States believes talks should start after the North abandons nuclear weapons, nuclear weapons should be abandoned through talks.”  He explained, “If the United States does not act, it cannot rely on China to solve the problem.” 

In Beijing’s view, the DPRK will not yield its nukes so long as it feels insecure.  Of course, Pyongyang might not do so in any case.  But it almost certainly is true that the Kim regime will not give up what looks like the ultimate security guarantee if it believes its future is at risk. 

As I point out on China-US Focus, “the North has no reason to take U.S. promises on faith.  Just as Washington has good reason to disbelieve North Korea’s commitments, so the DPRK has fair cause to distrust America.  Just ask Moammar Kaddafi, who made a deal sacrificing his nukes and missiles in return for engagement, only to be ousted by the Western powers at their first opportunity.”

Moreover, Pyongyang currently has nothing positive to lose from disruptive behavior.  The administration recently tightened sanctions again.  But in practice not much is going to change, especially since the PRC continues to moderate punitive U.S. actions.

Washington and its allies should consider an alternative approach.  Together, they could develop a comprehensive proposal for a grand bargain.  In exchange for the DPRK’s denuclearization and withdrawal of advanced conventional forces from near the DMZ, the allies could provide diplomatic recognition, end economic penalties, and eschew attempts at regime change.

The United States, South Korea, and Japan then should present the package to Beijing for its suggestions and, more importantly, support.  Pyongyang would lose its excuse for not responding positively.  In return for taking the PRC’s advice, the three allies could request that Beijing back allied efforts, including with the threat of cutbacks in aid, trade, and investment.

Only such a strategy of U.S. engagement seems likely to galvanize Beijing to action.  The PRC worries about regional instability and fears a united Korea allied with America and U.S. troops along the Yalu.  As long as Washington appears to be engaged in a campaign of containment, China has no reason to do the United States any favors.  This reluctance and fear is bound to continue if the Chinese believe, as some have suggested, that Washington is using North Korea’s program as an excuse to expand U.S. military involvement to ultimately threaten the PRC.

Indeed, Washington should consider a grand bargain to China as part of a broader process of re-learning the art of diplomacy.  America’s military-first policy is not working out very well anywhere, and especially against the PRC.

Washington’s frustrations with North Korea are obvious and understandable.  Nothing seems to work, and the administration’s latest sanctions are unlikely to have a different result.  At this stage, Washington has little to lose from taking China’s advice on how to address Pyongyang.  It is time for both the United States and PRC to act.

Caleb O. Brown

Cato Institute scholars Alex Nowrasteh, Aaron Ross Powell, Neal McCluskey, Mark Calabria, Bill Watson, Chris Edwards, Gene Healy, Chris Preble, Julian Sanchez, Pat Michaels and Trevor Burrus respond to President Obama’s 2015 State of the Union Address.

Video produced by Caleb O. Brown, Austin Bragg and Tess Terrible.

Pages