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The Case for Fishery Property Rights

Fri, 05/09/2014 - 16:32

Peter Van Doren

In the last few days, some commentators have praised the role of federal regulation in enhancing the health of fishing stocks. Brad Plumer at Vox.com, Paul Krugman at the New York Times, and Kevin Grier at Cherokee Gothic, have all weighed in.

The current issue of Regulation features a cover story that offers insight into what government interventions work and what doesn’t in the management of fisheries.

Authors Jonathan Adler and Nathaniel Stewart argue that fisheries are a classic example of what economists call the “Tragedy of the Commons.” Open access resources such as fishing stocks are overharvested because no one owns the rights to the harvest. Instead, everyone has an incentive to grab what fish they can before another boat does.

The traditional policy response to the commons problem has been regulating the length of the fishing season or limiting the total amount of fish that can be caught. The problem is these policies don’t change the incentives that lead fishermen to race after and grab as many fish as they can. For example, codfish quotas in the Gulf of Maine and Georges Bank were cut 77% and 61%, respectively in 2013. Such regulations do not fix the problem because the incentives for boats to get faster or bigger remain.

A better solution would be a system of Individual Transferable Quotas. These quotas assign to individuals a right to a small portion of the total allowed catch in a fishery. This “catch share” ends the incentive to race and grab because a fisher owns the rights to a defined amount of fish, and no one can take that right from him. A 2012 study of 15 catch-share programs in the United States and Canada found that, because the programs worked so well, fishinging seasons were lengthened from 63 to 245 days. And the introduction of the catch-share systems allowed fish populations to recover from previous overharvesting. After five years of catch share implementation, catch limits increased 13 percent on average.

Fishery property rights a vast improvement over traditional fisheries regulation.

Categories: Policy Institutes

Transportation Cliff or Pothole?

Fri, 05/09/2014 - 09:24

Randal O'Toole

Recent news reports have zeroed in on Washington’s next “cliff,” the “transportation cliff” that is expected to happen when the federal Highway Trust Fund runs out of money sometime this summer. Most of those articles have a hidden agenda: to increase spending for transit even though transit now gets 20 percent of federal surface transport dollars but carries little more than 1 percent of the travel carried by automobiles (about 55 billion passenger miles by transit vs. 4.3 trillion passenger miles in cars and light trucks). This post will explain some of the politics of the transportation cliff.

1. Why are we about to go off a transportation cliff?

Since 1956, federal highway programs have been financed with federal gasoline taxes. Those revenues go into the so-called Highway Trust Fund (“so-called” because it’s no longer very trustworthy) and then are distributed to the states for highway construction and maintenance. In 1982, Congress began dedicating a small but growing share of gas taxes to transit. Today, more than 20 percent of federal gas taxes are spent on transit, and there is no guarantee that the remaining 80 percent goes for highways, as Congress often diverts some of that money to such things as bike paths, national park visitor centers, museums, and other local pork barrel projects.

Congress reauthorizes this spending every few years. Traditionally, an authorization bill provides a spending ceiling. But the 2005 reauthorization bill made spending mandatory, meaning the ceiling was also the floor. (In 2012, Congress passed another reauthorization bill. That one didn’t mandate spending, but Congress went ahead and spent to the limit anyway, knowing full well that this would mean the Highway Trust Fund would be exhausted by sometime in 2014.)

When the 2008 financial crisis led to a reduction in driving, gas tax revenues failed to keep up with spending. Since then, Congress has had to supplement gas taxes with about $55 billion in general funds in order to keep the Highway Trust Fund from running out of money.

Anti-auto interest groups often portray these supplements as highway subsidies. But they would not be necessary if Congress weren’t diverting 20 percent of gas tax revenues to transit. Although more money goes to highways than to transit, because highways are so much more heavily used, federal subsidies to transit are about 80 times as great, per passenger mile, as federal subsidies to highways.

2. What will happen if we go over the transportation cliff?

In the past, states made their highway and transportation budgets assuming they will get a steady flow of federal dollars. But as transportation expert Ken Orski has shown, states have already realized they can’t count on a steady stream of federal funds and at least half have taken steps to back away from federal dependence.

If Congress goes over the transportation cliff, it won’t mean a sudden halt to highway projects and transit systems. Instead, states will spend money out of their own accounts, possibly getting short-term loans until the federal funding situation is resolved. Rather than a transportation cliff, it would be more accurate to describe current events as a “transportation pothole.” But while everyone expects Congress to soon supplement the Trust Fund, this particular pothole will give more states incentives to find alternative sources of funding.

The cliff isn’t the real issue. Instead, it is the reauthorization bill. Though most transportation reauthorization bills last six years, the 2012 bill expires this September. All of the posturing about the cliff is really an effort to promote changes in a new reauthorization bill.

3. What is the Obama administration’s position?

President Obama has proposed to replace the 2012 law with the “GROW AMERICA Act,” which absurdly stands for “Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America.” This bill would increase overall transportation spending by 38 percent, including a 22 percent increase in highway spending and a whopping 70 percent increase in transit funding.

Where would all that new money come from? Obama has also proposed to reform corporate taxes, which is supposed to reduce them in the long run but somehow produce a $150 billion one-time increase in revenues over 10 years. Obama proposes to spend four years of this increase on transportation. After that, the Highway Trust Fund would go over another transportation cliff.

There are a lot problems with this proposal. Congress hasn’t agreed to corporate tax reform, nor has it agreed to dedicate any revenues from that reform to transportation. The one-time injection of funds still leaves federal transportation programs unsustainable in the long run. Perhaps most important, increasing transportation’s dependence on general funds will make it less accountable to users and more accountable to pork-barrel politicians.

Historically, most federal transportation money is in “formula funds,” meaning it is distributed to states based on such factors as state populations, land areas, and road miles. Such funds are hard to use as pork. But Obama wants much, if not most, of the new spending in competitive grant programs, which supposedly allows the money to be spent where it is most needed. But in reality, competitive grants give the administration enormous power to reward the faithful and punish opponents. For example, Obama’s last grant of $2.5 billion to the California high-speed rail project came with a mandate that the money be spent in the congressional districts of two Democrats who were facing stiff opposition in an election that took place a few weeks after the grant was awarded. (They narrowly won re-election.)

4. What is Congress’ position?

Most observers assume that the GROW AMERICA bill is DOA. While House Transportation and Infrastructure Committee Chair Bill Shuster has promised to have a new reauthorization bill “on time,” there is still likely to be a major fight in Congress.

In 2012, the House Transportation Committee passed a bill that reduced spending to little more than revenues. But they couldn’t get the House as a whole to approve the bill because Republicans representing big cities objected to reduced federal spending on transit. So Congress eventually passed a version of the Senate bill, which spent about $15 billion a year more than revenues. That’s why we’re headed for a transportation pothole today.

The 2012 election failed to change the balance of power that led to those conflicts, so Congress is unlikely to pass a long-term bill in 2014. Instead, the push will be to supplement the trust fund and pass another two-year bill that continues the status quo. Unfortunately, the status quo means more congestion and more wasteful spending on obsolete rail projects.

5. Do we need to increase spending to keep America’s highways from crumbling?

For several years, there has been an almost continuous drumbeat about “crumbling infrastructure” which naturally carries over into the Highway Trust Fund debate. “Nearly one in four of America’s bridges [are] either structurally deficient or functionally obsolete,” says the Washington Post.

In fact, state highways are in excellent condition. The number of bridges that are “structurally deficient,” meaning worn out and requiring extra maintenance, has steadily declined from nearly 119,000 in 1992 to less than 67,000 in 2012, and now stands at less than 11 percent of the total. “Functionally obsolete” bridges represent the other 14 percent of the Post’s “one in four,” but these are simply bridges that have lower clearances, narrower lanes, or other issues that might slow traffic but not create serious problems. As for the 11 percent that are structurally deficient, few are in any danger of falling down: the recent bridge collapses in Minnesota and Washington states were due to design flaws, not maintenance failures.

A disproportionate share of the structurally deficient bridges are locally owned, not state owned. While states pay for most of their roads out of gas taxes, tolls, and other user fees, local governments rely heavily on sales taxes, property taxes, and other general funds. This underscores the importance of funding transportation out of user fees, not general funds.

6. Do we need to increase spending on transit?

Many of the groups most eager to portray the transportation pothole as a crisis are really interested in increasing transit spending. Yet there is virtually no relationship between transit subsidies and transit ridership. Since 1970, federal, state, and local governments have collectively spent more than a trillion dollars (in today’s dollars) subsidizing transit, yet transit ridership has declined from nearly 50 annual trips per urban resident in 1970 to around 44 annual trips today.

The real goal of increased transit spending is to build new rail lines. Such lines mean increased profits for rail contractors and excuses for urban planners to increase urban densities because people living in dense housing are supposedly more likely to ride transit than drive.

At the same time, while highways and bridges are in pretty good shape, our transit systems are not. Rail transit lines suffer from a $60 billion maintenance backlog. That backlog is growing because transit agencies are putting less money into maintenance than is needed to keep transit lines in their current state of poor repair.

The problem is that politicians prefer to fund new transit lines rather than maintain existing ones. Peter Rogoff, who until recently was the head of the Federal Transit Administration, even complained that transit agencies with crumbling systems still applied for funds to build new rail lines that they couldn’t afford to maintain. “If you can’t afford to operate the system you have,” he asked, “why does it make sense for us to partner in your expansion?” Having said that, he continued to give out grants for new rail lines because Congress effectively required him to do so.

In 2012, about 30 percent of the money spent on highways came from general funds, mostly at the local level, but 75 percent of the money spent on transit came from general funds. That made transit agencies far more responsive to unions, rail contractors, and other special interests than to transport users, which is the main reason why transit systems are in such poor shape.

7. Should we raise gas taxes?

Raising federal gas taxes by 10 cents per gallon over the current 18.4 cents could allow Congress to continue to spend on both highways and transit at current or increased levels. Rep. Earl Blumenauer (D-OR) has even proposed a 15-cents-per-gallon tax increase. Proponents of such an increase, including Blumenauer, want to see even more money flowing into transit and the construction of new rail projects.

In the long run, however, such an increase will still run into a transportation cliff. This is partly because Congress is likely to fully spend whatever revenues come in, and partly because a combination of inflation and increasingly fuel-efficient cars will reduce long-term revenues no matter what the tax.

Gas taxes function more of a user fee than sales, income, or other general taxes. But they are an imperfect user fee, as they don’t give signals to users about the costs of the facilities they use and don’t give signals to highway providers about the real demand for the roads they build.

8. What’s the solution?

In the immediate term, Congress will no doubt supplement the Highway Trust Fund with another $8 billion to $10 billion in general (meaning borrowed) funds. Beyond that, Congress needs to curb transportation spending so that it is no more than revenues.

In the long run, we need to find a better way to pay for transportation than gas taxes. For highways, that means mileage-based user fees. That will not only assure adequate funds for maintenance and improvements, but also enable the use of variable fees, which could virtually eliminate the traffic congestion that costs Americans $200 billion per year. One issue is that, if roads are funded out of mileage-based fees, there won’t be any need for federal involvement, which is good for those who want to devolve federal power to the states but bad for members of Congress who want to get credit for giving people money.

Meanwhile, most if not all transit costs should be funded out of fares, not taxes. Funding transit out of fares means relying more on buses and halting all or nearly all rail expansions. The best way to do this is to privatize transit, as private operators will be focused on serving users while public agencies end up serving mainly transit unions and suppliers. If Congress or the states feel the need to support low-income transit riders or other transit-dependent people, they should do so using transportation vouchers, not by subsidizing unresponsive transit agencies.

None of this will happen so long as Congress remains focused on increasing revenues to spend on special interest groups. Instead, Congress needs to recognize that transportation facilities are primary for transportation users, not unions, not rail car manufacturers, and not engineering and design firms.

Categories: Policy Institutes

Mad Magazine vs. Hollywood

Thu, 05/08/2014 - 16:19

Chris Edwards

Side-by-side obituaries in the Washington Post on Sunday were an interesting juxtaposition.

One obituary was for Efrem Zimbalist, Jr., a fine actor known for playing an agent in the television series “The F.B.I.,” which ran from 1965 to 1974. I never saw this show, but it sounds like many shows over the decades that have portrayed government agencies as super-efficient, laser-focused on the public interest, and always getting the bad guys.

By the end of each episode, “Mr. Zimbalist’s character, Inspector Erskine, and his fellow G-men had captured that week’s mobsters, subversives, bank robbers, or spies.” That surely helped to burnish the FBI’s image, as did the “stunning good looks” of Zimbalist.

The Washington Post notes: “Perceiving that the series could provide the real FBI with an important P.R. boost, [J. Edgar] Hoover opened the bureau’s files to the show’s producers and even allowed background shots to be filmed in real FBI offices.” Hmm, I wonder whether that influenced the show’s portrayal of the agency?

The other obituary was for Al Feldstein, a pioneering editor of Mad magazine, which had a circulation of 2.8 million by the 1970s and “shaped” many young minds. I had one of those young minds, and was influenced by the magazine’s “mockery of adult hypocrises.”

Feldstein saw his magazine “as a form of civic education” for young people. He said “it was their pipeline into the truth about what was happening in the country.” It “taught them skepticism,” which was certainly true for me.

While “The F.B.I.” was apparently portraying the FBI as beyond reproach, Mad magazine was busy “puncturing pomposity.” And here is where the two obituaries collide. Mad “asked readers to write FBI Director J. Edgar Hoover to request an ‘Official Draft Dodger Card,’” and many did. One would think that the agency would have been too busy catching mobsters to pay attention to such a prank. But no: “In a predictably bizarre encounter, FBI agents paid a visit to Mad’s offices in New York, dropping hints that Hoover didn’t take kindly to such shenanigans.”

Later on, America found out that it was Hoover who was committing the real shenanigans. In 1971 a group of skeptical young people “broke into a Bureau branch office outside of Philadelphia, seeking evidence for what they’d long suspected: that Hoover’s FBI was engaged in a secret, illegal campaign of surveillance and harassment of American citizens. The documents they found revealed massive abuses of power and helped lead to new legal checks on domestic surveillance.”

They probably didn’t find any files on Mad in that Philadelphia office, but apparently FBI HQ had accumulated 36 of them over the years.

The Washington Post says that Mad “warped the sensibilities of America’s youth” and exerted a “subversive” influence. But there is nothing warped about teaching skepticism. The real warping comes from all the Hollywood portrayals of government as a benevolent force led by technocratic experts who can solve all our problems.   

Categories: Policy Institutes

Is the Constitution Relevant Today?

Thu, 05/08/2014 - 14:19

David Boaz

In the Washington Post, Paul Kane reports that recent experiences with ultra-conservative Senate candidates have made Republican leaders fearful of candidates like Rep. Paul Broun in Georgia. There may be reasons for party leaders or voters to have doubts about Broun, but I hope they aren’t actually concerned about the purported problem that Kane identifies:

Broun is prone to fiery speeches invoking the Founding Fathers and applying those 1789 principles to issues 225 years later.

Seriously? He thinks the Constitution is still the law of the land? And that the framework it established for individual rights and limited government is still relevant today? Do Republican leaders really think that’s a bad message? Or does the Washington Post?

Thomas Jefferson and his followers hailed “the principles of ‘76” or “the spirit of ‘76” in their battles with Federalists. As historian Joseph Ellis put it, “Jefferson’s core conviction was that what might be called ‘the spirit of ‘76’ had repudiated all energetic expressions of government power, most especially power exercised from faraway places, which included London, Philadelphia or Washington.” Good thing there isn’t an actual Jeffersonian running!

But the principles of 1789, or actually of 1787, also protect freedom from government power and are just as essential today as they were at the Founding. The Framers knew their history. They knew that people with power tend to abuse it and to restrict freedom. In his last letter, 50 years after the Declaration of Independence, Jefferson wrote:

All eyes are opened, or opening, to the rights of man. The general spread of the light of science has already laid open to every view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.

Because they feared the exercise of power, the Framers wrote a Constitution that established a government of delegated, enumerated, and thus limited powers. Then the people insisted on a Bill of Rights to further protect their rights even from the very limited federal government established in the Constitution. Then, after identifying specific rights that individuals retained, they also added, “for greater caution,” as James Madison put it, the Ninth Amendment to clarify that “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”

One would hope that all members of Congress – and voters, and political reporters – believe that those principles and those constitutional rules should be applied to issues of today. Surely the First Amendment remains relevant. And the Fourth. And the limits on unconstrained power in the basic structure of the Constitution. The merits of any particular candidate aside, support of the Constitution and the principles it embodies seems like a good, even minimal, qualification for public office.

Categories: Policy Institutes

Copyright Law's Abuse

Thu, 05/08/2014 - 11:53

Jim Harper

Yesterday, we had a very interesting discussion of copyright at our event on Tom W. Bell’s book, Intellectual Privilege. (Video will be available soon.) Today, I received an email that reflects how the copyright statute can be misused.

In a 2009 blog post about an $18,000,000 U.S. government web site, I pointed to the web site, Recovery.org, which was then hosting the same information as the government site, and doing it for free. Since then, the Recovery.org domain has evidently been transferred to an organization specializing in recovery from addiction (to alcohol and drugs, not government spending).

The email I received today purports to be from an attorney named “Rick Smith” of the “Law Offices of Rick Smith & Associates”—no web site or phone number, and only a Gmail account. It asks me to remove the link to http://www.recovery.org/, claiming to have “received numerous complaints” from readers of the 2009 blog post.

It goes on: “If you fail to respond by May 13 we will be forced to serve you with a formal DMCA take down notice. A copy can also be sent to the hosting provider and major search engines that can exclude this and other pages from organic search rankings.”

The notice-and-take-down provision of the Digital Millennium Copyright Act allows aggrieved copyright holders to attack the wrongful Internet posting of material over which the law gives them control. It is not there to help people seeking correction of web site inaccuracies, much less for them to threaten suppression of access to material in which they do not hold the copyright.

I know this, of course, but many people don’t. Emails like this can fool people into thinking that they have to make demanded changes.

I’m going to make the change because there’s no sense in preserving a bad link. I’m also going to contact the folks at Recovery.org to see if they’re aware that someone purporting to be their attorney is misusing copyright in their name.

Categories: Policy Institutes

Venezuela Arrests Human Rights Activist, Cato University Alum

Thu, 05/08/2014 - 11:45

Juan Carlos Hidalgo

Last night Venezuela’s Bolivarian Intelligence Service (SEBIN) arrested Rodrigo Diamanti, president of “Un Mundo sin Mordaza” (A World Without Gag), an NGO that promotes human rights and freedom of expression in that country. Diamanti is also a good friend of the Cato Institute and attended the Cato University that we co-hosted in Venezuela in 2009.

No charges have been filed, although reportedly he had an arrest warrant against him. Two weeks ago, while visiting Caracas to run another Cato University and speak at a conference of the pro-liberty think tank Cedice, my colleague Ian Vásquez and I got to talk to Rodrigo and other Venezuelan friends who were part of the student movement that defeated Hugo Chávez in a referendum in 2007. They told us how the government was increasingly harassing NGOs. Sadly, we noticed that many of the guys that attended that Cato University in 2009 have left Venezuela. Those who stayed and continue to fight against the increasingly authoritarian government face the consequences.

Also, early this morning the Bolivarian National Guard violently took over two camps in downtown Caracas where students had been staging a permanent protest against the government. The authorities claim they arrested 243 people. I visited both camps and met several of the students there. One of them, Maria Alejandra, 23, told me she had an arrest warrant against her and woke up every day not knowing whether she would be free –or even alive—by the end of the day. I haven’t been able to contact her today and I’m afraid she’s among those detained during today’s raid.

The crackdown comes at a time that the government is holding phony dialogue meetings with a sector of the opposition. Yesterday a poll by Datanálisis found that 78% of Venezuelans are pessimistic about the situation of the country and 59% thinks that president Nicolás Maduro is doing a bad job. The trend is clear: As the popularity of the regime dwindles, its authoritarianism increases.

Categories: Policy Institutes

North Korean Purge Opportunity for America to Extricate Itself from Potential Conflict

Thu, 05/08/2014 - 10:17

Doug Bandow

It doesn’t pay to be number two in North Korea.  In December the young dictator Kim Jong-un executed his uncle, Jang Song-taek, supposedly Kim’s top advisor.  Now Vice Marshal Choe Ryong-hae, who climbed atop Jang’s corpse, has been relieved of his important positions.

Choe’s fall is particularly important because, though he was an aide to Kim’s father, Kim Jong-il, he rose rapidly under the younger Kim.  Dumping Choe reshapes the political environment of Kim’s making.

While Kim’s dominance in Pyongyang does not guarantee the regime’s survival, it dampens hope for any change outside of Kim.  Today’s Korean Winter isn’t likely to give way to a Korean Spring. 

Moreover, nothing suggests that the North’s communist monarchy is about to give way.  Many observers have waited a long time for regime collapse in the North.  They probably will have to wait a lot longer.

So far Kim Jong-un doesn’t appear to be much interested in reform.  If anything, he is more committed to his government’s nuclear weapons program and confrontational foreign policy than were his predecessors.

North Korea’s policy toward the South has oscillated wildly, but has headed mostly downward.   The North also appears to be preparing a fourth nuclear test.  The DPRK recently test-fired two medium-range missiles, predicting “next-stage steps, which the enemy can hardly imagine.”

The Obama administration obviously is frustrated, and reportedly is considering easing preconditions for resuming the long-stalled Six Party Talks.  However, it’s unlikely that renewed negotiations would lead anywhere.  Which has left the major U.S. response to tie itself closer to its South Korean ally, loudly reaffirming that America will defend the Republic of Korea if necessary.

Washington needs to reflect first on why the North is such a problem for America.  A small, impoverished, and distant state, even with a handful of nuclear weapons (but no delivery capacity), obviously is no match for the globe’s superpower.  Ordinarily the former wouldn’t be interested in the latter.   

But the U.S. maintains a defense treaty with and garrison in the ROK, routinely deploys naval and air units around the DPRK, regularly conducts military exercises in the South, and constantly threatens war against the North.  Pyongyang can’t very well ignore America. 

Thus, going home should be the foundation of U.S. policy toward the Koreas.  When Washington agreed to a defense treaty with the South 61 years ago the latter was in no condition to defend itself from renewed attack.  But everything has changed since the end of the Cold War.  Today Seoul doesn’t need conventional back-up.

Nor does the U.S. military commitment help solve the nuclear issue.  American forces have become nuclear hostages, conveniently placed within striking distance of the North.  They also reinforce Pyongyang’s natural paranoia, increasing its perceived need for nuclear weapons.

Washington should loosen military ties with South Korea and extricate itself from a potential Korean conflict.  The U.S. should terminate the “mutual” defense treaty, withdraw the permanent garrison, and end the periodic threats.

Doing so would knock Washington down several notches on Kim’s enemies list.  Withdrawal also would reduce Beijing’s perception that the U.S. is seeking to contain China in cooperation with the ROK.

As I point out in my latest article on National Interest online:  “Having demilitarized America’s role on the peninsula, Washington then could engage the North with less controversy—opening simple consular relations, for instance.  U.S. policymakers would gain a small window into an alien society, as well as a direct communications channel.”

North Korea, so full of human tragedy, marches on with a new communist king at the nation’s head.  There’s little any other country can do to bring peace, stability, and prosperity to the DPRK.

However, the U.S. could, and should, reduce the possibility of the North interfering with America’s peace, stability, and prosperity.  By going home.  Where America’s soldiers and other military personnel belong.

Categories: Policy Institutes

Happy Hayek's Birthday

Thu, 05/08/2014 - 09:23

David Boaz

Today is the 115th anniversary of the birth of F. A. Hayek, who honored the Cato Institute by serving as a Distinguished Senior Fellow, and in whose honor the Institute’s F. A. Hayek Auditorium is named. “It is hardly an exaggeration to refer to the twentieth century as the Hayek century,” John Cassidy wrote in the New Yorker. If we’re lucky, the 21st century will also be a Hayek century.

Hayek spoke at Cato several times.  Before his 1982 Distinguished Lecture, he sat down for an interview with Cato Policy Report.  Here’s another interview by our late board member Jim Blanchard that appeared in Cato Policy Report. Senior fellows Tom Palmer and Gerald O’Driscoll have offered appreciations of his work. O’Driscoll more recently applied Hayek’s business cycle theory to the 2008 financial crisis.

Cato adjunct scholar Ilya Somin ponders Hayek’s continuing relevance in this essay from just before the crisis announced itself last fall. Somin notes that Hayek’s critique of socialism gets most attention from scholars, but his critique of conservatism is also worth pondering.

In 2011, on the occasion of the publication of a definitive edition of Hayek’s great book The Constitution of Liberty, his work was discussed in the Hayek Auditorium by Ronald Hamowy, Bruce Caldwell, Richard Epstein, and George Soros. I discussed that event, with a link to the video and transcript, here, concluding 

Hayek was not just an economist. He also published impressive works on political theory and psychology.

He’s like Marx, only right.

As the world suffers from the aftereffects of another Federal Reserve-created bubble, it’s a good time to reread Hayek on the boom-and-bust cycle. But it’s also a good day to reflect that Hayek lived just long enough to see the demise of the totalitarian socialist system that he spent his life analyzing and criticizing. The world is freer today, partly because of Hayek’s great work.

Categories: Policy Institutes

Highway Bill: Another Spending Test for the GOP

Wed, 05/07/2014 - 15:14

Chris Edwards

I testified yesterday to the Senate Finance Committee regarding federal highway and transit funding.

I appreciated the committee’s willingness to hear views different than the usual pro-spending positions of the Transportation Establishment, which includes nearly all Democrats, many Republicans active in transportation, and dozens of business, engineering, and construction lobby groups. I discussed reasons why decentralizing transportation funding and decision making would be the best policy approach.

Politically, the highway issue will be very interesting to watch in coming months. Congress needs to act because the Highway Trust Fund faces a huge gap between spending and revenues of at least $14 billion annually. The revenues mainly come from the federal gasoline tax, which everyone agrees is not going to be raised anytime soon.

What should Congress do? To believers in budget restraint, federalism, and efficient infrastructure investment, the answer is obvious: policymakers should reduce federal spending to match revenues. Heritage scholars examine the federalism angle in this piece. I discuss efficient infrastructure investment in this piece.

However, some Republicans apparently want to raise revenues to match today’s high spending levels. If Republicans go in that direction, it will be one more failure to align their policy actions with the fiscally conservative language that peppers their speeches and media comments.

Many Republicans chose the big-spending route on last year’s budget agreement and this year’s farm bill. What route will they take on an upcoming highway bill?

Categories: Policy Institutes

FERC's Prosecutorial Tactics

Wed, 05/07/2014 - 13:09

Tim Lynch

Joseph Rago of the Wall Street Journal reports on an outrageous enforcement action by the Federal Energy Regulatory Commission against brothers, Rich and Kevin Gates.  Excerpt:

[FERC] began demanding information and taking depositions in fall 2010. At first, the Gates brothers tried to adhere to the insider playbook and hired an attorney from White & Case, a D.C.-based law firm that does frequent business in front of FERC. The insular Washington energy bar trafficks in political connections, but those aren’t so useful for clients who maintain their innocence.

Things started to turn for Kevin Gates, he recalls, during his second full-day deposition with the lead FERC enforcement lawyers on the Powhatan matter, Steven Tabackman and Thomas Olson. “I would suggest that it was intimidation tactics, aggressive behavior, which I guess is natural for a federal prosecutor, maybe what you would expect,” he says. “But there were also a lot of questions asked and behavior that suggested to me that we were seeing the world very differently and—I would suggest—they didn’t know what they were talking about.”

Mr. Gates was asked to leave the room and sat in the hallway while his lawyer conferred with the feds. The lawyer emerged to relate what the FERC enforcement team had proposed: “Kevin’s a businessman, isn’t he? He knows that it’s cheaper to settle than it is to fight this investigation.” Right then, Mr. Gates says, “I realized that we had a big problem on our hands. This was unlike anything we’d ever seen before at a regulatory agency.”

The Gates brothers fired the white-shoe practice and brought on Bill McSwain of Drinker Biddle, a Philadelphia-area lawyer who “didn’t interface much with FERC. He also used to be a Marine sniper, so he had a different approach to the world.” Mr. McSwain introduced himself to FERC by calling their conduct contrary to “established law, as well as common sense,” and that was one of his subtler letters…

[FERC’s regulators] have specialized in retroactive punishments for conduct that was legal at the time. Most of these cases never go to court and end with settlements against politically disfavored defendants like J.P. Morgan (that one, like Powhatan, was led by Mr. Olson). Most companies roll over because their future business interests depend on preserving good regulatory graces and favorable FERC rulings. The Gates brothers are unusual in that their livelihoods are elsewhere, but the illogic, intimidation tactics and erosion of due process in their investigation are typical. [Emphasis added].

Read the whole thing.  As the article notes, most business people surrender to the bullying tactics of regulators.  By taking their case public and fighting back, the Gates brothers may not only win their case, but might establish some favorable legal precedents that will help others in the future.  And for that, they deserve our thanks.

For related Cato work on the erosion of due process, go here, here, here, and here.

Categories: Policy Institutes

Chile: If Ain’t Broken, Don’t Fix It

Wed, 05/07/2014 - 12:47

Juan Carlos Hidalgo

Nick Miroff of the Washington Post rightly credits Chile’s free-market system for the country’s stability, low unemployment and corruption, and for producing Latin America’s wealthiest society. But he also states that this economic model “has given Chile some of the highest levels of inequality in the developed world.”  Thus, he adopts the narrative of the Chilean left that blames free markets for producing social inequality and argues that the model needs fixing through higher taxation and government intervention in the economy. Four points need clarification:

First, high levels of inequality existed in Chile prior to the implementation of the free market reforms that began in 1975. A recent book by economist Claudio Sapelli of the Catholic University shows that Chile’s Gini index coefficient* was higher in 1970 than what it is today (see graph below). Inequality dropped significantly between 1970 and 1975 as everyone became poorer (the average annual inflation rate in that period was 124.2% and by 1975 over 50% of Chileans lived below the poverty line). Inequality rose again in the second half of the 1970s as the economy recovered and people’s incomes began growing at different paces. As Luis Larraín of Chile’s Libertad y Desarrollo institute points out in a recent book, “It is a well-known fact that fast-paced processes of growth, in the early stages of development, create a worse distribution of income, as the example of China shows today”.

Source: Claudio Sapelli, Chile: ¿Más Equitativo?, Ediciones Universidad Católica de Chile, 2011.

Second, inequality is decreasing in the Andean nation. Income disparity reached a zenith in the late 1980s and has decreased since then. Data from the UN Commission for Latin American and the Caribbean (ECLAC) shows that in 1990 Chile had a Gini index coefficient of 0.55 while in 2011 (latest year available) it was 0.51. In the last two decades of the free-market system, inequality has actually come down somewhat. Interestingly, Chile has less inequality than Brazil, but not many people blame the latter’s income disparities on its bloated big government development model.

Third, inequality in Chile will continue to go down since income distribution significantly improves among the young. Sapelli shows that Chile’s Gini index coefficient goes down with age (see graph below) as more Chileans, especially younger generations, have access to health care and education (which, as Miroff notes, are highly privatized). For example, the percentage of people aged 25-64 who have received high school education in Chile is 68%, lower than the OECD average of 71%. But when he looks at the generation aged 25-34, he notes that the rate goes up to 85%, not only higher than the OECD average of 80%, but also superior to the rates of the Netherlands, Norway and Australia. Today, 1.1 million students are enrolled in higher education (45% coverage) compared to just 200,000 in 1990. Over 70% of these students are the first generation in their families to receive higher education.

Source: Sapelli, 2011.

Fourth, some of the policies announced by the newly inaugurated president Michelle Bachelet, supposedly aimed at rescuing Chilean capitalism “from its excesses” (as Miroff puts it), would actually benefit the richest segments of society. A study by the Libertad y Desarrollo institute found that if higher education were “free” in Chile (and by “free” read “paid by taxpayers”), 41% of the resources would go to finance the education of the richest 20%, and only 9% would go to the poorest 20%. As Miami Herald columnist Andrés Oppenheimer has repeatedly documented, “free” higher education in Latin America disproportionately benefits the well-off (and adversely affects the quality of the education).

The reasons behind Chile’s left-turn have been explained elsewhere. But for the sake of Latin America’s most prominent success story, and the example it provides to the rest of the region, it’s important to tackle the myth propagated by the left that Chile’s free-market system is something that needs a radical fix through higher taxes and government intervention.

*In the Gini Index, zero implies perfect equality, while one represents perfect inequality.

Categories: Policy Institutes

New National Test Results Released Today

Wed, 05/07/2014 - 11:19

Andrew J. Coulson

The U.S. Department of Education has just released 2013 results for the National Assessment of Educational Progress—aka, “The Nation’s Report Card.” The scores are for 12th grade reading and mathematics, and neither has changed since the last time they were administered a few years ago. But of course what we really want to know is how well students are performing today compared to those of a generation or two ago. That would tell us if our education system were improving, staying the same, or declining in performance.

The trouble is, “The Nation’s Report Card” doesn’t go back very far.  The reading results reach back to 1992 (since which time, there has been a slight but statistically significant decline), but the math results only reach back to 2005 (since which time, there’s been a slight but statistically significant increase). It’s just not that long of a time period to assess trends.

Wouldn’t it be great if there were a different set of NAEP tests, called the “Long Term Trends” series, that reached back all the way to the early 1970s! And wouldn’t it be even better if we could find out how much we’ve spent per pupil over that same time period, so that we could figure out if our schools are getting more or less efficient with our dollars? Well, what do you know, there is, and we can!

But here’s the thing. Some people look at that national trend chart and think: but my state is doing much better than that! Is it? Is it really? I decided to find out, for all fifty states. The result is my recent, mysteriously-titled paper: State Education Trends. Drop by and check out how your state has done over the past 40 years.

[Note to readers: The state charts look at changes in annual per pupil spending over time, whereas the national chart above looks at the change over time in the total cost of a full K-through-12 education, so the spending trend lines are not directly comparable].

Categories: Policy Institutes

Federal Judge Halts Wisconsin "John Doe" Criminalization-of-Politics Probe

Wed, 05/07/2014 - 09:45

Walter Olson

In a huge victory for the First Amendment, a Wisconsin federal judge has ordered a halt to a wide-ranging secret prosecutorial probe aimed at groups supporting Gov. Scott Walker. From pp. 1-2 of the court opinion (which is short enough to read, here): “Defendants instigated a secret John Doe investigation replete with armed raids on homes to collect evidence that would support their criminal prosecution.” Judge Rudolph Randa goes on to cite stunningly abusive conduct by the secret prosecutors and law enforcers under their command. (This article has more on Wisconsin’s distinctively broad law allowing so-called John Doe proceedings intended to determine whether a crime has been committed.) 

“The subpoenas’ list of advocacy groups indicates that all or nearly all right-of-center groups and individuals in Wisconsin who engaged in issue advocacy from 2010 to the present are targets of the investigation,” the judge writes. At the homes of targets across the state in the predawn hours of Oct. 3, 2013, “Sheriff deputy vehicles used bright floodlights to illuminate the targets’ homes. Deputies executed the search warrants, seizing business papers, computer equipment, phones, and other devices, while their targets were restrained under police supervision and denied the ability to contact their attorneys.” Target groups were also ordered to turn over essentially their entire records of public advocacy activity over a period of years.

I covered the probe and raids earlier at Overlawyered herehere, and most recently here. One of the most remarkable and harsh aspects of the raids was that they included gag orders forbidding the targets to talk about the episode with anyone other than their lawyers. That is one reason the story seeped out to the public only slowly and partially over a period of months. The Wall Street Journal editorial page helped bring the raids to national attention a month and a half after they took place, and has continued to follow the story since.

The citizens of Wisconsin must now demand a full accounting of how these raids could have happened. They should also insist on changes in state law, in particular the “John Doe” law, aimed at ensuring that nothing like them ever happens again.

Categories: Policy Institutes

Courts Must Put Administrative Agencies in Their Place

Tue, 05/06/2014 - 11:45

Ilya Shapiro

In order to govern the sprawling reach of the U.S. administrative state—its countless agencies, bureaucracies, departments, and other regulatory bodies—our courts have come to rely greatly on what is called Chevron analysis. Taking its name from the 1984 Supreme Court case in which it was pronounced, Chevron v. National Resources Defense Council, this doctrine advises when and to what extent courts are to defer to agency actions. 

Since agencies can only exercise the legislative powers granted to them by Congress, Chevron counsels that where Congress has spoken clearly on an issue, the statutory text controls, but where Congress is ambiguous or silent, the agency is permitted to fill the gap with its own rules and decisions.    Naturally then, agencies that want more rulemaking power than has been “clearly” granted to them by Congress—so, all of them—find ways to invent ambiguity. In a recent ruling, a panel of the U.S. Court of Appeals for the Fifth Circuit appears to be trying to help them.    Here’s the case: Seeing that the IRS’s definition of “taxable compensation” differed from Congress’s, BNSF Railway sought a refund of overpaid taxes on certain elements of its employee compensation plans—and won on all counts before the district court. On appeal, however, a Fifth Circuit panel reversed, employing the “dictionary rule”—a truncated version of the full, traditional statutory analysis typically required, and an approach that has already been rejected by an en banc (full) Fifth Circuit. This short analysis skips the important, rigorous examination into whether Congress has spoken on the issue (an examination required by Chevron) and looks merely to see if the word can have more than one dictionary meaning. As tends to be much more likely with this type of scant analysis, the Fifth Circuit panel found that Congress was ambiguous, which in turn allowed the IRS’s discretionary definition to prevail.    BNSF has now filed for a rehearing of the case before the en banc Fifth Circuit. Cato has filed a brief supporting this request, joined by tax law expert Patrick J. Smith and administrative law professors Michael Moreland, Jeffrey Pojanowski, and Nathan Sales. As the administrative state continues its unending spew of rules and regulations, the role of the courts as a gatekeeper of administrative authority becomes increasingly vital to maintaining any kind of sanity. That role requires courts to apply Chevron diligently and not to skimp on the considerable duty of determining where Congress’s authority ends and the domain of unelected bureaucrats begins.    By failing to make a rigorous examination, the Fifth Circuit panel adopted an approach that, if allowed to gain a foothold, could threaten a (further) massive shift of governing power away from our elected Congress to a faceless, hardly accountable bureaucracy. In our brief, we urge the Fifth Circuit to send the message that it takes Chevron and its job of checking agency authority seriously by rehearing the case and reversing the panel decision.   The Fifth Circuit will be deciding later this spring whether to take up BNSF Railway Co. v. United States. If it doesn’t, the next step is a petition to the Supreme Court.    This blogpost was coauthored by Cato legal associate Julio Colomba.
Categories: Policy Institutes

Panama Dodges a Bullet

Tue, 05/06/2014 - 10:34

Juan Carlos Hidalgo

Panamanians voted on Sunday against the efforts of their president, Ricardo Martinelli, to stay in power even though he was constitutionally barred from seeking reelection. It’s not an overstatement to say that in doing so, Panama overcame the greatest challenge in it’s 25 year-old democracy.

For several years Martinelli looked for a way to get rid of the constitutional ban on reelection. He couldn’t do it through a constitutional amendment since the vote of two separate legislatures is required to change the Constitution. And since polls consistently showed that public opinion was firmly against the idea of introducing consecutive presidential reelection, a referendum was also out of the question. Thus, Martinelli tried to pack the Supreme Court with three new justices. The idea was that a friendly Supreme Court would rule that the ban on reelection was unconstitutional (as occurred in the case of Daniel Ortega in Nicaragua). However, Panamanians took to the streets and Martinelli backtracked. Then he opted for a less overt strategy: supporting a successor and appointing his wife as his vice-presidential candidate. As Mary O’Grady of the Wall Street Journal pointed out [$], Martinelli moved his queen to stay in power.

Despite a legal prohibition to do so, Martinelli actively campaigned for his candidate José Domingo Arias and his wife, while viciously attacking their rivals. His government spent millions of dollars in publicity and the president toured the country giving away goodies such as digital TV boxes and inaugurating infrastructure projects (he ordered that the new metro in Panama City not charge a fee until after the election). It is ironic that while Panama has been the most outspoken critic of Venezuela in Latin America, Martinelli’s government engaged in similar electoral tactics as those of Chavismo.

Fortunately, it didn’t work. Juan Carlos Varela, who is Martinelli’s vice-president turned bitter rival, handily defeated Arias by 39.1% versus 31.7%. Panama City’s former mayor, Juan Carlos Navarro, came in third with 27.9%. Even though Martinelli accepted his candidate’s defeat, he didn’t call Varela on Sunday to congratulate him, claiming he had lost his phone number. That doesn’t bode well for a smooth transition. Martinelli is well-known for holding bitter grudges. After splitting with Varela, the National Assembly he controls voted to increase taxes on liquor sales to fund a subsidy for elderly people. As it happens, Varela’s family owns a rum-distillery.

One of the areas where Varela could find a nasty surprise is in public finances. Total government debt (in absolute terms) has increased by 70% during Martinelli’s watch and it wouldn’t be too surprising if the incoming administration finds that the fiscal figures have been doctored to make them look less grave. The Martinelli administration has already engaged in accounting tricks such as postponing payments, relying on turnkey projects to build infrastructure, and taking public enterprises off the books to feign a lower fiscal deficit.

The high levels of government spending have been masked by the fact that the economy grew at an annual average rate of 8% for the last 5 years. While the economy was growing at such a high pace, the fiscal deficit and the public debt (as a percentage of GDP) seemed under control. However, now that the economy is decelerating, the fiscal iceberg is becoming more apparent: the central government deficit was 4.4% of GDP last year. And, after years of declining thanks to high growth rates, total public debt as a percentage of GDP (39% by the end of 2013) is expected to start rising again in 2014.  

Varela will also have to deal with the cronies that Martinelli placed in several key posts such as the Comptroller General, the Attorney General and the head of a recently created tax authority with vast powers. Varela will also face a National Assembly with a majority that belongs to Martinelli’s party.

If Panamanians want to avoid having a president with authoritarian leanings, they should look at amending the Constitution (but not holding a Constituent Assembly as some propose) so the executive doesn’t enjoy so much power in appointing key officials in the government. For example, the next president will be able to appoint four Supreme Court Justices (out of nine), one Electoral Court Justice, and six board members to the Canal Authority (out of eleven), among others. It’s too much power to place in a single person. The constitutional reform should also grant greater independence to the Judiciary.

Panamanians dodged a bullet on Sunday. But their ability to do so in the future depends on restructuring their institutions in order to have a weaker president and a stronger republic.

Categories: Policy Institutes

Balcerowicz’s Polish Big Bang versus Ukraine

Mon, 05/05/2014 - 17:13

Steve H. Hanke

On May 21, 2014, Leszek Balcerowicz will receive the 2014 Milton Friedman Prize for Advancing Liberty during a dinner at the Waldorf-Astoria Hotel in New York. The prestigious annual award by the Cato Institute carries with it a well-deserved check for $250,000.

For those who might have forgotten the accomplishments of my long-time friend, allow me to suggest that, in Balcerowicz’s case, a picture is literally worth a thousand words.

But, before the picture, a little background.

In 1989, Balcerowicz became Poland’s Deputy Prime Minister and Finance Minister in Eastern Europe’s first non-communist government since World War II. Balcerowicz held these positions from 1989 through 1991, and again from 1997 through 2000. Subsequently, in 2001, he became the Chairman of the National Bank of Poland, a post he held until January 2007.

A student of the “Five P’s”: prior preparation prevents poor performance; Balcerowicz was ready when he first took office in 1989. Indeed, he pulled his comprehensive economic game plan to liberalize and transform the Polish economy out of his desk drawer and proceeded to implement what became known as the “Big Bang”. As they say, the rest is history.

The results of the “Big Bang” speak for themselves in the accompanying chart. Poland’s economy has more than doubled since the fall of the Soviet Union in 1992, growing at an average annual rate of 4.42%.

What about neighboring Ukraine? The contrast with Balcerowicz’s Poland couldn’t be starker. As Oleh Havrylyshyn, the former deputy finance minister of Ukraine, spells out in his classic book – Divergent Paths in Post-Communist Transformation: Capitalism for All or Capitalism for the Few – Ukraine rejected the Big Bang, free-market approach to reform. In consequence, it has taken a road to nowhere, remaining in the shadow of a corrupt communist system.

Unlike Poland’s prosperity, Ukraine has witnessed a post-Soviet contraction in its economy. Yes, the Ukrainian economy has been contracting at a real annual rate of almost 1% since the fall of the Soviet Union. Accordingly, it is smaller today in real terms than it was in 1992.

Many think the International Monetary Fund, which just ponied up $17 billion for Ukraine, will turn things around. Don’t hold your breath. Over the years, the IMF has dispensed its medicine and money in Ukraine with negative results.

When it comes to much-needed liberal economic reforms, one has to do something big; something that captures the public’s imagination and garners wide support. Unfortunately, Ukraine lacks a clear economic game plan – one with wide popular support.

Categories: Policy Institutes

Why We Need Guns

Mon, 05/05/2014 - 16:52

Stephanie Rugolo

There are plenty of reasons to support the Second Amendment’s guarantee of our right to bear arms, but an expectation of being the victim of society-collapsing chemical warfare shouldn’t be one of them. Wayne LaPierre, CEO and executive vice president of the National Rifle Association, recently said at the organization’s annual meeting:

“We know, in the world that surrounds us, there are terrorists, home invaders, drug cartels, carjackers, “knock-out game”-ers, rapers [sic], haters, campus killers, airport killers, shopping mall killers, and killers who scheme to destroy our country with massive storms of violence against our power grids or vicious waves of chemicals or disease that could collapse the society that sustains us all.”

People tend to overestimate their vulnerability because politicians, reporters, and interested individuals like LaPierre stand to gain from such misperceptions. My colleague John Mueller reported that as recently as late 2011, 75 percent of Americans polled believe that another terrorist attack causing large numbers of American lives to be lost in the near future is somewhat or very likely. The reality is much tamer: outside of war zones, Islamist terrorism claims about 200 to 400 lives each year worldwide. And the United States is less violent now than it has been in years. In the short 35 years between 1973 and 2008, murder dropped by over 40 percent. Rape dropped by 80 percent over the same period.

The mismatch between perceived vulnerability to violence and reality is one of several public misconceptions that the website HumanProgress.org hopes to amend. This is not to say that the right to self defense is superfluous—quite to the contrary, it is fundamental and firearm ownership is an important component of securing that right. That alone is justification for the right to defensive weapons. But there is no need to exaggerate dangers such as probable and imminent threats from terrorists and psychopaths.

Categories: Policy Institutes

What the National Climate Assessment Doesn't Tell You

Mon, 05/05/2014 - 16:32

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

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

The Obama Administration this week is set to release the latest version of the National Climate Assessment—a report which is supposed to detail the potential impacts that climate change will have on the United States.  The report overly focuses on the supposed negative impacts from climate change while largely dismissing or ignoring the positives from climate change.

The bias in the National Climate Assessment (NCA) towards pessimism (which we have previously detailed here) has implications throughout the federal regulatory process because the NCA is cited (either directly or indirectly) as a primary source for the science of climate change for justifying federal regulation aimed towards mitigating greenhouse gas emissions. Since the NCA gets it wrong, so does everyone else.

A good example of this can be found in how climate change is effecting  the human response during heat waves.  The NCA foresees an increasing frequency and magnitude of heat waves leading to growing numbers of heat-related deaths. The leading science suggests just the opposite.

Case and point. Last week, we had an article published in the peer-reviewed scientific journal Nature Climate Change that showed how the impacts of extreme heat are often overplayed while the impacts of adaptation to the heat are underplayed.  And a new paper has just been published in the journal Environmental Health Perspectives that finds that the risk of dying from heat waves in the U.S. has been on the decline for the past several decades.

By now, this should be rather unsurprising as it has been demonstrated over and over again. Not only in the U.S. but in Europe (and yes, Stockholm) and other major global cities as well. 

The idea that human-caused global warming is going to increase heat-related mortality is simply outdated and wrong. In fact, the opposite is more likely the case—that is, a warming climate will decrease the population’s sensitivity to heat events as it induces adaptation.  We described it this way in our Nature Climate Change piece:

Some portion of this response [the decline in the risk of dying from heat waves] probably reflects the temporal increase in the frequency of extreme-heat events, an increase that elevates public consciousness and spurs adaptive response. In this manner, climate change itself leads to adaptation.

 …Our analysis highlights one of the many often overlooked intricacies of the human response to climate change.

But this information often falls on deaf ears—especially those ears responsible for developing the NCA.

Here is what the Executive Summary of the draft version had to say about heat-related mortality:

Climate change will influence human health in many ways; some existing health threats will intensify, and new health threats will emerge. Some of the key drivers of health impacts include: increasingly frequent and intense extreme heat, which causes heat-related illnesses and deaths and over time, worsens drought and wildfire risks, and intensifies air pollution.

The U.S. Environmental Protection Agency takes the same outlook (of course since it is based heavily on the National Climate Assessment).  The EPA leaned heavily on heat-related mortality as one the “threats” to public health and welfare in its justification for pursuing greenhouse gas emissions restrictions. From the EPA’s Technical Support Document for its greenhouse gas “Endangerment Finding”:

Severe heat waves are projected to intensify in magnitude and duration over the portions of the United States where these events already occur, with potential increases in mortality and morbidity, especially among the elderly, young, and frail. [emphasis in original]

Now compare the Administration’s take with the latest findings on the trend in heat-related mortality across the United States as published by a research team led by Harvard School of Public Health’s Jennifer Bobb.   Bobb and colleagues found that the risk of dying from excessive heat events was declining across the U.S. And further, that most of the overall decline was coming from declines in the sensitivity to extreme heat shown by the elderly population (75 and older).  In fact, the Bobb team found that the risk in the older population has dropped so far that it is now indistinguishable from the risk to the younger populations. Adaptation is a beautiful thing!

From Bobb et al.:

While heat-related mortality risk for the ≥75 age group was greater than for the <65 group at the beginning of the study period, by 2005 they had converged to similar levels.

In other words, all the EPA’s talk about an increasing threat from heat waves and a growing elderly population combining to negatively impact the public health and welfare has been wrong up to now and almost assuredly will be so into the future as we continually look for ways to avoid dying avoidable deaths (e.g., those from heat waves).

Bobb and colleagues summarize this way:

This study provides strong evidence that acute (e.g., same-day) heat-related mortality risk has declined over time in the US, even in more recent years. This evidence complements findings from US studies using earlier data from the 1960s through mid-1990s on community-specific mortality rates (Davis et al. 2003a; Davis et al. 2003b), as well as European studies that found temporal declines in heat-related mortality risk (Carson et al. 2006; Donaldson et al. 2003; Kysely and Plavcova 2011; Schifano et al. 2012), and supports the hypothesis that the population is continually adapting to heat.

As a note, we (Knappenberger and Michaels) were co-authors on the two Davis et al. studies cited in the above paragraph. Our work, first published more than a decade ago, was some of the first research into the declining trends in heat-related mortality across the U.S.

Clearly we have been saying all this stuff for a long time and even more clearly, the federal government hasn’t been listening for a long time. It is not what they want to hear.

References:

Bobb, J.F., R.D. Peng, M.L. Bell, and F. Dominici, 2014. Heat-related mortality and adaptation in the United States, Environmental Health Perspectiveshttp://dx.doi.org/10.1289/ehp.1307392

Davis, R.E., P.C. Knappenbergre, P.J. Michaels, and W.M. Novicoff, 2003a, Changing heat-related mortality in the United States. Environmental Health Perspectives111, 1712–1718.

Davis, R.E., P.C. Knappenbergre, P.J. Michaels, and W.M. Novicoff, 2003b, Decadal changes in summer mortality in U.S. cities. International Journal of Biometeorology, 47, 166–75.

Knappenberger, P.C., P.J. Michaels, and A.W. Watts, 2014. Adaptation to extreme heat in Stockholm County, Sweden. Nature Climate Change, 4, 302-303.

Categories: Policy Institutes

Is Obama Still the Deporter-In-Chief?

Mon, 05/05/2014 - 12:56

Alex Nowrasteh

This is a difficult question to answer.  As Matt Graham at the Bipartisan Policy Center has pointed out, the rate of internal removals as a percentage of all Immigration and Customs Enforcement (ICE) removals has declined during the Obama Presidency.  But this, in and of itself, doesn’t tell us much about the long run trends of internal enforcement.  We need data from the past that we can compare President Obama’s immigration enforcement record to.  We only have the rate of internal deportations for the last year of the Bush Administration.  Cato has filed a FOIA to find out if the government kept statistics on internal versus border removals prior to 2008 but I’ve heard the data wasn’t kept.

Let’s assume that 63.6 percent of all ICE removals were internal from 2001 to 2007.  I chose 63.6 percent because that was ICE’s internal removal rates in the year 2008 – the first year when that statistic is available.  That means that the number of internal removals under the Bush administration was about 1.25 million.  From 2009-2013, the Obama administration’s has removed just over 1 million from the interior of the United States.  Of course, Bush had three more years to deport unauthorized immigrants.  660,000 people were removed from the interior of the United States during the first five years of the Bush administration.

Source: Department of Homeland Security, BPC, Author’s Calculations.

President Bush removed an average of about 250,000 unauthorized immigrants a year, an average of 160,000 of them annually were interior removals.  President Obama has removed an average of 390,000 unauthorized immigrants a year, an average of 200,000 of them annually were interior removals.

Source: Department of Homeland Security, BPS, Author’s Calculations.

As I’ve written before, the best way to measure the intensity of immigration enforcement is to look at the percentage of the unauthorized immigrant population deported in each year.

Source: Department of Homeland Security, BPC, Pew, Author’s Calculations.

I focus on the internal removal figures as a percentage of the estimated unauthorized immigrant population and assume that the internal removal rate of 63.6 percent prevailed throughout the Bush administration.  If that interior enforcement rate was steady, then the Bush administration deported an average of 1.43 percent of the interior unauthorized immigrant population every year of his presidency.  President Obama’s administration has deported an average of 1.75 percent of the interior unauthorized immigrant population every year of his presidency.  Even when focusing on interior removals, President Obama is still out-deporting President Bush - so far.

The Obama interior removal statistics certainly show a downward trend – especially in 2012 and 2013.  However, the Obama administration has not gutted or radically reduced internal immigration enforcement no matter how you dice the numbers.

Categories: Policy Institutes

Supreme Court Wasn't Serious about the Second Amendment

Mon, 05/05/2014 - 12:11

Ilya Shapiro

While the media attention will focus on the Supreme Court’s ruling in Town of Greece v. Galloway – the legislative-prayer case – the more interesting (and consequential) decision issued today was the Court’s denial of review in Drake v. Jerejian, the Second Amendment case I previously discussed here. In Drake, the lower federal courts upheld an outrageous New Jersey law that denies the right to bear arms outside the home for self-defense – just like the D.C. law at issue in District of Columbia v. Heller denied the right to keep arms inside the home – and today the Supreme Court let them get away with it.

Drake is but the latest in a series of cases that challenge the most restrictive state laws regarding the right to armed self-defense. Although the Supreme Court in Heller declared that the Second Amendment protects an individual constitutional right, lower federal courts with jurisdiction over states like Maryland and New York have been “willfully confused” about the scope of that right, declining to protect it outside Heller’s particular facts (a complete ban on functional firearms in the home). It’s as if the Supreme Court announced that the First Amendment protects an individual right to blog about politics from your home computer, but then some lower courts allowed states to ban political blogging from your local Starbucks.

Yet each time, the Supreme Court has denied review.

New Jersey’s is perhaps the most egregious restriction. In the Garden State, local law enforcement officials have full discretion to grant or deny a license to carry a firearm, which they “may issue” only if the applicant can prove a “justifiable need” (which in practice means a specific, immediate threat to one’s safety that can’t be avoided in any way other than through possession of a handgun). Then, even if a local police chief approves a carry permit, the application goes to a judge for a hearing, during which the local prosecutor can oppose the permit. And even if the would-be gun-owner can successfully run that gauntlet, she gets a permit for two years, at which point she must repeat the entire process.

The “dual review” by two different branches of goverment is unusually burdensome, to say the least, and distinguishes New Jersey’s approach – in addition to the extreme definition of “justifiable need” – from every other permitting regime in the country. Can you imagine the exercise of any other constitutional right being handled this way?

The effect of this regulatory scheme is that virtually nobody in New Jersey can use a handgun to defend themselves outside their home. The state law inverts how fundamental rights are supposed to work – that the government must justify restrictions, not the right-holder the exercise – and apparently the Supreme Court has no problem with that.

The lower court in Drake applied a deferential review far from the heightened scrutiny normally due an individual right enshrined in the Bill of Rights. It also assumed the legislature’s good faith without requiring the state to show any evidence that a prohibitive-carry regime lowers the rate of gun crime, and excused what constitutional infringements the law causes because legislators acted before Heller clarified that the Second Amendment protected an individual right. To continue my previous analogy, it’s like a state law banning political blogging survived judicial review because the definitive Supreme Court ruling finding an individual right to political blogging didn’t come down till after the state law was enacted.

What kind of a bizarro world are we living in where this is ok?

In Cato’s amicus brief in Drake, we posed an alternate “question presented” (legalese for the issue that a brief asks a court to resolve): 

Was this Court serious in District of Columbia v. Heller when it ruled that the Second Amendment protects the individual right to keep and bear arms?

Today we learn that the answer, unfortunately, is no.

Categories: Policy Institutes

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