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Doug Bandow

Washington again is at war in the Middle East. Unfortunately, pressure for military intervention will grow with Republican control of the Senate.

The likely result of any new conflicts will be similar to America’s past interventions. The United States will be intervening again in a few years to try to clean up the mess it is creating today.

The United States is not bombing the Islamic State out of necessity. Rather, Washington is acting in response to past mistakes. ISIL exists only because the Bush administration invaded Iraq.

The Obama administration’s decision to attack the Islamic State makes no policy sense. So far, ISIL has focused on creating a quasi-government in the Middle East and has not targeted America.

Of course, the Islamic State killed two U.S. citizens who fell into its hands in truly monstrous behavior. But these murders are no different than similar barbarities committed by others around the globe. Such personal tragedies are no reason to go to war.

If successful in creating a viable “caliphate,” ISIL’s leaders might turn towards terrorism, but doing so would risk their quasi-state by bringing America’s wrath down upon it. Moreover, Iraq demonstrated the foolishness of launching preventive wars based on fantasies disguised as forecasts. The United States is more likely to turn the Islamic State to terrorism now by making war on it, encouraging it to retaliate.

Perhaps the worst aspect of Washington’s policy is absolving nearby states of their responsibility to destroy ISIL. These countries will not act if the United States bails them out.

More fundamental is the fact that American policymakers have so often gotten the Middle East wrong, intervening arrogantly and maladroitly, creating more problems than they solved. Already the attack on the Islamic State has caused al-Qaeda affiliates such as the al-Nusra Front to support ISIL.

The United States is in the middle of a sectarian war in Iraq, with atrocities committed against Sunni civilians by Shia militias backing the Baghdad government. Washington’s limited bombing has made little progress in defeating the Islamic State. Aiding the “moderate” insurgents in Syria risks further undermining the Assad government, the single force best positioned to block further ISIL gains.

But blowback is to be expected. In 1953, Washington helped oust Iran’s democratically elected prime minister. Eventually the authoritarian Shah was overthrown, with radical Islamists targeting America.

The Reagan administration inserted the U.S. military into the middle of Lebanon’s bloody civil war. Attacks on the U.S. embassy and Marine Corps barracks followed.

Fear of Iranian domination of the Persian Gulf caused Washington to back Saddam Hussein in his aggressive war against Tehran. That helped persuade Hussein that the United States would not block his conquest of Kuwait.

The first Bush administration expelled Hussein’s forces without overthrowing his regime. But the Bush and Clinton administrations launched regular air strikes, while U.S-led sanctions harmed Iraqi civilians. American forces garrisoned Saudi Arabia, providing one of Osama bin-Laden’s grievances against America.

The immediate result of the second Bush administration’s invasion of Iraq was sectarian war, mass civilian casualties, destabilization of surrounding nations, and strengthened Iranian influence, along with high American human and financial costs. The Islamic State turned out to be a longer-term consequence.

The Obama administration joined with Europe to intervene in Libya’s civil war, leaving violent chaos. The United States blundered into the Syrian imbroglio, originally declaring President Bashar al-Assad to be a reformer, then insisting that Assad resign, discouraging any negotiated settlement. The administration now simultaneously criticizes the government, backs supposedly moderate insurgents, and bombs radical regime opponents.

Washington has reentered the Iraqi conflict. As I warn on Forbes online:  “Experience suggests that U.S. authorities lack the knowledge, judgment, and competence to carry out almost any policy there without making the situation worse.”

It is impossible to predict the exact outcome of Washington’s newest military intervention in the Middle East. But experience suggests that new problems created will generate pressure for new interventions in coming years.

Now more than ever Washington should implement the “humble” foreign policy originally advocated by presidential candidate George W. Bush.

Roger Pilon

How sweet it is. Less than a year ago—on November 21st, to be exact—Harry Reid went nuclear. As he’d threatened, in order to get a few of President Obama’s D.C. Circuit Court nominees past a Republican filibuster—staged because that court for years had had more judges than its workload required—Reid unleashed what had come to be called “the nuclear option.” He ended the availability of the filibuster for most executive branch nominations, not by the two-thirds vote that Senate rules had long required but by a simple majority. With yesterday’s mid-term election results now in, it looks like Reid will have enjoyed his win for less than a year. As I wrote at the time, here, here, and here, stating the obvious, what goes around comes around.

Not that he didn’t get some substantive results over that short period, mind you: After a D.C. Circuit panel struck a major blow against Obamacare in July, for example, followed only hours later by a Fourth Circuit decision going the other way, thus setting up a circuit split suited for Supreme Court resolution, the full DC Circuit, on which Obama’s new appointees were now sitting, vacated the panel’s decision just six weeks later, thus removing the circuit split. The Supreme Court is likely to take up the issue in time in any event, as other circuits weigh in on it. But timing is important on a matter like this. We’ll see.

The larger issue, however, is that there will be other nominations over the next two years, and not only for life-time appointments on our federal courts. There is, for example, a looming vacancy at the Department of Justice: Attorney General Eric Holder has said he will stay on until his successor is confirmed. Among those under serious consideration for that post is one Thomas Perez, whose stints as the current secretary of labor and, before that, as assistant attorney general for civil rights have raised enough concerns to keep the new Republican Senate Judiciary Committee’s staff occupied for some time.

And where will those remaining Democratic senators who voted for Harry Reid’s nuclear option be sitting? Why on the minority side, watching Republicans enjoy their newly acquired power to block controversial Democratic nominees by the vote of a mere majority—all because of Harry’s hubris. But it wasn’t Harry’s alone. As the Wall Street Journal editorializes this morning, after his victory speech following his 2012 re-election, President Obama walked off the stage and made separate calls to Nancy Pelosi and House Democratic campaign chairman Steve Israel, telling them “he would spend the next two years helping Democrats retake the House in 2014.” In politics as in life, hubris has its price. We will now have a proper vetting of the president’s nominees, and that is good.

Ilya Shapiro and Trevor Burrus

While California endures its worst drought in a century, a small, finger-sized fish with no known redeemable qualities, the delta smelt, has become the centerpiece of extensive litigation. The U.S. Fish and Wildlife Service (FWS) classifies the delta smelt as “threatened,” and since 2008 it has said that large amounts of water should not be pumped out of the delta smelt’s habitat—the wetlands north of San Francisco—and into the state’s drought-stricken central and southern regions.

That “imported” water from northern California has become vital to the state’s important agricultural business, and the FWS’s decision has substantially harmed California’s farms, farm-laborers, and millions of others dependent on the water supply. In short, in order to protect the 3-inch fish, the state has pumped billions of gallons of water straight into the ocean rather than using it to help California’s struggling farmers.

The farmers, represented by the Pacific Legal Foundation, filed a lawsuit in response to these draconian measures to save the irrelevant fish. The farmers argued that the FWS should not have ignored the harsh financial and human costs of the FWS’s “reasonable and prudent alternatives” to pumping water out of the northern wetlands. The U.S. Court of Appeals for the Ninth Circuit disagreed, holding that the FWS’s decisions deserve deference and that the “FWS is not responsible for balancing the life of the delta smelt against the impact of restrictions” on water pumping. Congress, wrote the court, has already decided that the FWS should protect endangered species “whatever the cost.”

In an attempt to get the Supreme Court to review their case, the farmers argue that the circuit court misread the history of the Endangered Species Act (ESA) and should not have ignored the economic impact of so-called “reasonable and prudent alternatives.” Cato, joining the National Federation of Independent Business, filed a brief in support of their petition. We argue that the ESA has changed since the Supreme Court ruled, in 1978, that species must be protected “whatever the cost.”

The ESA has been amended many times and now commands the FWS to take “into consideration the economic impact” of its proposals. Moreover, the 1978 case that required species to be protected “whatever the cost” has been limited by subsequent decisions.

Finally, we argue that the Ninth Circuit’s decision is in conflict with the Fourth Circuit, which in 2013, vacated an FWS determination because it failed to take into account the economic impact of the reasonable and prudent alternative. This conflict between circuits should be rectified by the Supreme Court, and the ESA should be rightly interpreted as requiring the FWS to take into account the economic impacts of its decisions.

No offense to the delta smelt, but we prefer human beings.

The Supreme Court will decide whether to take the case of Stewart & Jasper Orchards v. Jewell later this year or early in 2015.

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

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 just-released “synthesis” report from the U.N.’s Intergovernmental Panel on Climate Change (IPCC) could be the last gasp of this clumsy dinosaur. 

Containing no new science, the new IPCC offering is just a rehash of its series of Fifth Assessment Reports that have been released over the past year or so.

When the IPCC’s “science” portion of the Assessment was released last fall, it was immediately faulted for being based upon climate models which have greatly overpredicted the amount of climate change that has been occurring largely because they completely missed the slowdown of the rate of global warming that has taken place over the past two decades. The IPCC tried a few band-aid-type solutions to keep its cold blood, but they were too little, too late. With its dismal track record exposed, no one should possibly take the IPCC future projections seriously, including the folks down at 1600 Pennsylvania Avenue.

More and more, people are calling for the United Nations to render the IPCC dinosaur to the strata of history, reaching a crescendo with this “new” report.

The Synthesis Report was shaped by the climate alarmists who were enraged that the IPCC even feebly admitted that its future projections were likely on the high side of things. Instead, they demanded a strong statement from the IPCC that could be used to force fossil fuel restrictions on the unwilling (which partially explains the ham-handed  release two days before pivotal U.S. elections). So despite no new science and another year—making now 16 out of the past 16 years—in which the global average temperature has fallen beneath IPCC projections, the IPCC released what has been called its “starkest” and “most important” report yet

From The (predictable) Guardian:

“Science has spoken. There is no ambiguity in the message,” said the UN secretary general, Ban Ki-moon, attending what he described as the “historic” report launch. “Leaders must act. Time is not on our side.” He said that quick, decisive action would build a better and sustainable future, while inaction would be costly.

Ban added a message to investors, such as pension fund managers: “Please reduce your investments in the coal- and fossil fuel-based economy and [move] to renewable energy.”

Hopefully, such talk from the U.N. will spark the rest of us to get what we deserve, that is, an end to this government-funded U.N. charade claiming to represent the “consensus of scientists.”  With luck, the extinction this dinosaur will herald the extinction of all the government-funded climate change “assessments,” ushering in the rise of Homo sapiens.

Ilya Shapiro and Trevor Burrus

David and Susan Kentner own residential lots along San Carlos Bay in Sanibel, Florida. Because their property is along the high-tide line, the Kentners enjoy an age-old common-law right to build docks over the water abutting their property, subject to reasonable regulation. But Sanibel passed an ordinance forbidding the Kentners and others from taking advantage of this common-law right. The city claimed that the ordinance was necessary to protect seagrass, which it called an “invaluable natural resource.”

Whether or not seagrass is invaluable, the city passed the ordinance without considering whether seagrass was actually present in the areas subject to the ordinance and whether modern technology could effectively be used to avoid harming the seagrass. Moreover, there is evidence that the city passed the ordinance in order to satisfy the aesthetic preferences of certain interest groups and to enhance the property values of other dock-holders. On top of that, in 2006 the city issued itself an exemption to build a dock in San Carlos Bay, explaining that it should be allowed to build a dock because no seagrass was found on the site.

The Kentners, represented by the Pacific Legal Foundation, challenged the ordinance on the ground that it did not substantially advance any legitimate government interest. In other words, the Kentners claimed that the ordinance violated the due-process rights to their property, which is lawyer-speak for laws that don’t have a good-enough justification. Both the trial and appellate judges held that property rights aren’t “fundamental rights” protected by due process, thus ruling that the government didn’t need a good reason to pass these restrictions. In other words, property rights simply don’t enjoy protection against irrational government regulations.

On appeal to the Supreme Court, the Kentners argue that the lower courts were mistaken in treating property rights as no-class—not even second-class—rights. In support of the Kentners’ petition to have the Supreme Court hear the case, Cato joined the National Federation of Independent Business, Owners Council of America, and Rutherford Institute on a brief arguing that the lower courts were gravely mistaken in classifying property rights as not deserving of due-process protections. The Fourteenth Amendment, after all, explicitly says that no state shall deny “life, liberty, or property” without due process of law.

Further, the Court should review the case to clarify and solidify longstanding precedents that treat property rights as on par with other rights. After all, if the government is allowed to violate property rights with no justification whatsoever, then any ordinance that confiscates, destroys, or restricts property will be simply unassailable, regardless of how unreasonable or shocking it may be. The high court should take this case to reaffirm that property rights are indeed constitutionally protected and cannot be abridged with impunity by opportunistic, corrupt governments.

The Supreme Court will decide later this year or early in 2015 whether to take Kentner v. City of Sanibel.

Nicole Kaeding

Open enrollment for Obamacare’s second year begins next week. In the chaotic launch of HealthCare.gov, the Department of Health and Human Services (HHS) delayed the launch of the sister portal for small businesses. Now, the health insurance exchange for small businesses is expected to open, but it is still plagued with problems.

The Small Business Health Options Program (SHOP) provides an online portal for small businesses with fewer than 50 employees to purchase insurance. The website allows employers to provide a contribution towards an employee’s health insurance purchase.

A new report from the New York Times summarizes the issues discovered during recent testing:

For example, they said, some health insurance plans approved for sale on the exchange did not show up on the website. The site worked well with some web browsers, like Chrome, but not with others, like Internet Explorer and Firefox. Premiums and other charges for some plans were erroneously displayed as percentages rather than dollar amounts — 350 percent rather than $350, for example. For some households, the principal subscriber was listed as a dependent, or vice versa.

HHS is claiming that the website will be functional when open enrollment starts on November 15.

The future success of SHOP is doubtful even if HHS gets the website working. States had the option of creating their own SHOP or relying on the federal exchange. Several states decided to launch their exchanges last year. The results were lackluster:

California signed up 1.4 million people through its individual exchange, but its small-business exchange enrolled only 1,700 companies, with 11,500 employees and dependents. In Minnesota, the small-business exchange signed up 190 employers covering 1,500 people.

The low participation is not surprising since businesses can still purchase insurance outside of an exchange. The primary reason to use a SHOP exchange would be to receive a tax credit. Firms with fewer than 25 workers who purchase via the exchange are eligible for a tax credit to help offset the cost of the employer contribution. Credits can be as large as 50 percent of the employer contribution.

However, the tax credit is unlikely to induce many small businesses to use the exchange. Only a small number of eligible businesses claimed the previous version of the tax credit, which did not require the extra step of a SHOP purchase. According to the Government Accountability Office (GAO), many employers did not claim it due to the complexity in its calculations. Adding another requirement suggests even fewer employers will take advantage of the credit.  Additionally, GAO estimates that very few small firms offer health insurance as benefit to employees because the tax credit is small. Firms are not encouraged to provide the benefit.

HHS had an additional year to get its SHOP website development right. Reports suggest that HHS is still not ready, despite the large cost. But even if the website becomes functional, success of the overall SHOP program looks unlikely.

Doug Bandow

The U.S. government has failed to stop the drug trade at home. Washington also has not created a competent, effective, and honest central government in Afghanistan. How effective will Kabul be in limiting opium production when American troops go home?

Not much.

A new report from the Office of the Special Inspector General for Afghanistan Reconstruction reports that opium production last year was the highest ever, 209,000 hectares, up 36 percent from 2012.

Alas, the sky is the limit. SIGAR warned:  “With deteriorating security in many parts of rural Afghanistan and low levels of eradication of poppy fields, further increases in cultivation are likely in 2014.”

Last year the United Nations Office on Drugs and Crime estimated that opium exports accounted for 14 percent of the country’s GDP. Unfortunately, explained SIGAR:  “the narcotics trade poisons the Afghan financial sector and undermines the Afghan state’s legitimacy by stoking corruption, sustaining criminal networks, and providing significant financial support for the Taliban and other insurgent groups.”

The Afghan public is understandably cynical. When I visited the country Afghans called large homes behind high walls lining Kabul streets “poppy palaces.” 

Drug production exploded despite $7.6 billion spent by Washington alone to stop cultivation and distribution. Noted SIGAR, “the recent record-high level of poppy cultivation calls into question the long-term effectiveness and sustainability of those prior efforts.”

The State Department’s response to SIGAR was a marvel of delusion. Production “is only one indicator of counternarcotics progress.”  And “we are making good progress in building the capability of our Afghan partners,” even as cultivation surges.

This is the best case for years of expensive efforts? Even UNODC admitted that the Afghan State is beset by “fragmentation, conflict, patronage, corruption and impunity.” The Pentagon stated that “the failure to reduce poppy cultivation and increase eradication is due to the lack of Afghan government support for the effort.” 

Nevertheless, State said it looked “forward to the new Afghan government assuming a leadership role in this regard.”

Eradication was difficult enough when backed by a strong allied military presence. Wrote Vanda Felbab-Brown of the Brookings Institution, early programs were “manipulated by local Afghan strongmen to eliminate drug competition and ethnic/tribal rivals.”

Moreover, the eradication campaign, turned poppy farmers into Taliban supporters.  Eradication efforts also inflated Taliban revenues. As economist Jeffrey Clemens pointed out, the counter-narcotics campaign both redirected opium production to Taliban-controlled areas and raised poppy prices.

Operating on their own, the Afghan National Army and Afghan National Police will be hard-pressed to fulfill their most important responsibility to sustain the Kabul government against the Taliban. Drug interdiction inevitably will be a secondary objective for security forces which already suffer from corruption.

But no strategy likely would succeed even in the best circumstances. As noted earlier, attempting to suppress drugs could lose the geopolitical war without winning the fight against poppies. Even with greater development few legal opportunities would be better than poppy production.

Another approach is to reduce demand for drugs in Western societies to discourage production in Afghanistan. However, only the most draconian enforcement has much effect on drug use.

The West must set priorities in Afghanistan. Attempting to eradicate poppy production is almost guaranteed to lose the battle for hearts and minds.

Instead, allied policymakers should consider strategies to drain money and profit from the drug trade. Western governments should scale back the drug war.

Afghanistan could be allowed to produce opium for the legal morphine market. Ultimately the entire market should be legalized or at least decriminalized for adults.

Indeed, frustration with years of militarized eradication efforts, some in the midst of insurgencies akin to that in Afghanistan, has caused several Latin American governments to deemphasize enforcement.

As I noted in Forbes online:  “Afghanistan is merely one front in a global drug war. There are no good solutions. But Afghanistan and its Western-backers should recognize reality and abandon the futile and counterproductive campaign against the opium trade.”

Doug Bandow

With President Barack Obama further tarnishing his Nobel Peace Prize by starting yet another Middle Eastern war, exuberant Neoconservatives claim their moment has arrived. And it has: Neocon claims that war-mongering and nation-building serve America’s interests have become obviously ever more absurd.

In 2001 President George W. Bush initiated what was supposed to be The Neocon Moment, projecting a swaggering global presence in which the U.S. would bomb, invade, occupy, and otherwise intervene whenever and for whatever reason it chose. As I wrote for Forbes online:  “Autocrats would flee, candies would be tossed, enemies would be defeated, flowers would bloom, allies would comply, cakewalks would be held, democrats would flourish, and the lion would lie down with the lamb.”

Alas, administration policy wrecked Iraq. Although President Bush never repudiated what he’d done, he appeared to lose his taste for war.

Candidate Obama ran against the Bush presidency, but little changed U.S. foreign policy. No one could mistake the latter as a peacenik libertarian.

Except, apparently, for the Neocons. They now proclaim The Neocon Moment. Explained Matthew Continetti, “monsters [have been] brought forth by American retreat,” and “the threat of those monsters requires unilateral deadly force wherever necessary to kill our enemies and deter our foes.”

Retreat?

In fact, “The Neocon Moment” is distinguished by its failure. As evidence of the need for a return to swaggering interventionism Continetti offers a parade of horrors either created by Washington or well beyond its control.

There’s the Islamic State, which exists only because of the misguided Bush invasion of Iraq. There’s Ukraine, a testament to what happens when one encourages one’s allies to be helpless dependents while facing an adversary with a far greater interest in the outcome of any confrontation.

There are al-Qaeda affiliates in several countries, which arose in response to promiscuous U.S. meddling abroad and persisted in the midst of multiple wars. There’s Iran, in which Islamists overthrew a U.S.-supported dictator who took power in a U.S.-supported coup. There’s the Taliban, which survived more than a dozen years of Washington’s efforts at nation-building.

Neocons have no answer to any of these. They imagine a world of immaculate intervention, in which foreigners welcome being killed and never strike back. Alas, the more Washington attempts to micro-manage the globe, the more likely it is to be attacked.

Neocons also imagine a world in which America automatically deters and only America deters. No one would dare challenge Washington if the president exercised “leadership.”

In fact, countries with the most at stake will risk and spend more than their adversaries, as the U.S. demonstrated during the Cold War in Latin America. Does the U.S. have anything at stake in Ukraine and the Senkakus which warrants the risk of war? The answer is no.

One doesn’t have to look far to see the wreckage left by today’s interventionist consensus. Washington has attempted to fix the Middle East and Central Asia for decades. The result? War, instability, autocracy, brutality, collapse. U.S. officials consistently have demonstrated the reverse Midas touch.

The Balkans has turned out little better, with nationalist divisions still evident two decades after Washington imposed an artificial political settlement. Europe represents the globe’s greatest aggregation of economic power, but is not inclined to defend itself, preferring instead to rely on the U.S.

Only now is Japan finally emerging from hiding behind the “peace constitution” to consider a more active military role. South Korea continues to subsidize the North even as U.S. troops guarantee the former’s security.

It’s true: Americans are not living in the Libertarian Moment. Rather, we are living in The Neocon Moment, a testament to the foolishness and arrogance of those who believe themselves to be engineers of peoples, societies, and nations. Only when the American people insist that politicians make peace, not war, will The Libertarian Moment finally arrive.

David Boaz

The Gallup Poll has a new estimate of the number of libertarians in the American electorate. In their 2014 Gallup Governance Survey they find that 24 percent of respondents can be characterized as libertarians (as compared to 27 percent conservative, 21 percent liberal, and 18 percent populist).

For more than 20 years now, the Gallup Poll has been using two questions to categorize respondents by ideology:

Some people think the government is trying to do too many things that should be left to individuals and businesses. Others think that government should do more to solve our country’s problems. Which comes closer to your own view?

Some people think the government should promote traditional values in our society. Others think the government should not favor any particular set of values. Which comes closer to your own view?

Here’s a graphic depiction of the number of respondents who gave libertarian answers to both questions in the Bush-Obama years: 

Libertarians, who disagree with both Democrats and Republicans on major issues, have not been reliable voters for either party. They generally tend to vote Republican by about a two to one majority. But as David Kirby and I wrote in our 2010 study, “The Libertarian Vote in the Age of Obama”:

In 2004 libertarians swung away from Bush, anticipating the Democratic victories of 2006. In 2008, according to new data in this paper, libertarians voted against Barack Obama. Libertarians seem to be a lead indicator of trends in centrist, independent-minded voters. If libertarians continue to lead the independents away from Obama, Democrats will lose 2010 midterm elections they would otherwise win.

And of course the Democrats did have a bad 2010. If libertarian-leaning voters react against Obamacare, overregulation, endless wars, and the surveillance state, then Democrats are likely to have a bad 2014 as well. But Republican positions on immigration, gay marriage, and marijuana push libertarian voters, especially millennial libertarians away; that might account for the surprisingly weak showing of many Republicans in polls in a year when President Obama is unpopular and the economy remains dismal.

Read more about the libertarian vote in our original study or in our 2012 ebook.

Hat tip to Lydia Saad for the unpublished Gallup data and to Derek Lee and David Dewhurst for the chart.

David Boaz

As we hear the usual frenzied concern about big money in politics, Cecilia Kang and Matea Gold offer an interesting fact in today’s Washington Post:

Total political advertising in 2014 is expected to reach a record $2.4 billion, up $100 million from four years ago, according to estimates by the Kantar Media research firm.

That sounds like a lot of money. But the first thing I notice is that the increase from 2010 is only about half the rate of inflation. Given the increasing scope of government, it might be surprising that the increase has been so minimal. But divided government may have caused some potential donors to see fewer opportunities and/or risks in the next couple of years.

The Institute for Justice offers another timely way to look at the magnitude of political spending:

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

You Ought to Have a Look is new 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 articles and essays in recent days, along with our color commentary.

We have a couple of new introductions to make to our You Ought to Have a Look line-up.

We’re big fans of Daniel Botkin. He is an environmental biologist with a panoramic view of nature. He started his career as a forest modeler (that’s someone who predicts the future composition and structure of forests) and was a Government-Issue global warmer. Since then, he has written 16 books on the environment and has become a champion lukewarmer—a person who, like us, synthesizes the climate data and comes to the hypothesis that warming will be modest and readily adapted to. On May 29, he testified before the House Committee on Science, Space, and Technology, on systematic problems with the United Nations’ Intergovernmental Panel on Climate Change. On June 18, he was before a subcommittee of the Senate Environment and Public Works Committee.

Botkin has a thought-provoking piece this week in the National Parks Traveler—a website dedicated to all things National Parks. In his article, he critiques a report issued by the Union of Concerned Scientists (UCS) with the predictably alarming title, “National Landmarks at Risk: How Rising Seas, Floods, and Wildfires Are Threatening the United States’ Most Cherished Historic Sites.”  The paleolithic media were all over the UCS report when it came out six months ago, and it headlined several news shows on the dinosaur networks. For “balance,” we managed a few soundbites.

Botkin’s article is more in-depth than the UCS report, concluding that human-caused global warming gets far more attention than it deserves in the universe of environmental issues, which precludes appropriate attention to real issues.

Botkin writes:

However, global warming has become the sole focus of so much environmental discussion that it risks eclipsing much more pressing and demonstrable environmental problems. The major damage that we as a species are doing here and now to the environment is not getting the attention it deserves.

You ought to have a look at Botkin’s complete article!

Next we bring your attention to Watts Up With That, “the world’s most viewed site of global warming and climate change,” the result of (now retired) broadcast meteorologist Anthony Watts’ blood, sweat, and tears over the past several years. WUWT, as it is known, features a large array of climate-related articles, about four or five per day.  A recent story that caught our eye was one featuring a collection of newsbites highlighting record agricultural output from around the world during the past year. The article “World Food Production at Record Levels” reinforces a point that we like to repeat as often as we can: the world is thriving in the face of, or even because of, climate changes.

Again, we recommend a click on Judith Curry’s Climate Etc. blog. Recently, she featured a guest post by Matt Skaggs, who presents an entirely new (to climate people, anyway) way to isolate (or, perhaps, not find) the signature of carbon dioxide-induced warming. “Root Cause Analysis of the Modern Warming” says that documenting a human fingerprint on global warming is much more uncertain than it is typically made out to be, as it is based upon a faulty line of reasoning. Curry offers this teaser:

The main point of relevance here is that there are different ways to frame and approach the climate change attribution problem, and the one used by the IPCC and mainstream climate scientists isn’t a very good one.

The post is lengthy and technical in spots, but it does make you wonder whether everyone has been trying to solve the attribution issue the wrong way.  

The interwebs also provide a rapid-response platform when one’s scientific work is challenged in the refereed literature, as shown in a recent post at www.drroyspencer.com. Roy Spencer is writing about a recent publication in the journal Climate Dynamics claiming that his satellite-sensed temperatures—which show much less warming than do surface thermometers—are confounded by cloudiness. According to author Fuzhong Weng and colleagues, when the effects of cloudcover are accounted for, the warming trend in the satellite record increases by about 30%, putting it more in line with the surface records.

(Actually, that wouldn’t cut it for at least one obvious reason—Spencer’s satellite record does not have as much of the “pause” in warming since 1997 that appears in the surface temperature history that scientists prefer over others.)

Spencer’s rejoinder is pretty powerful, noting that he and his co-worker John Christy have visited and revisited the cloud issue for decades and find it to be nugatory. Further, Spencer questions why Weng et al. only looked at one of the very many sensing units that have been launched since 1978, and that only covers 13 of the 35 years of the operational data set. There’s no particular reason cited for this, which tends to confirm that the Weng et al. paper is consistent with the paradigm theory of science first put forth by Thomas Kuhn in the 1962 (and many reprints) classic, The Structure of Scientific Revolutions. Kuhn’s thesis is that most scientists spend their careers trying to defend the established order, and when that order is challenged, they resort to some pretty bizarre attempts to demonstrate that everything is hunky-dory with the established paradigm. In this case, that would be that the surface temperature trends shown in the University of East Anglia are more reliable than the satellite data—providing more (but declining) support for the notion that the human influence on climate is large and dangerous.

Observant readers of our ramblings will notice that we specifically ignore the surface temperature history from NASA, initially developed by Sergei Lebedeff and Jim Hansen. Those data have been processed (perhaps “Jimmied” is more appropriate) in ways that flunk Physics 101, and, la-dee-da, Jimmying produces more warming, more consistent with high-end fantasies about climate change that keep Hansen flying in the front of the plane. For a bit on that, see this story from the WUWT archives.

Neal McCluskey

The big higher education news this week is that the Obama administration released its “gainful employment” rules aimed squarely at beleaguered for-profit colleges, which are the schools most likely to offer programs that are explicitly about supplying job skills. This attack does not seem to come because for-profits are objectively worse performers than the rest of the decrepit Ivory Tower, but because it is easy to demonize institutions that—unlike much of higher ed—are honest about trying to make a profit. Oh, and because going after the real culprit—an aid system that gives almost any person almost any amount of money to go to college—would require federal politicians to take on a system they created, and that makes them look ever-so-caring.

Perhaps the only unexpected thing about the regulations is that they do not include cohort default rates—the percentage of an institution’s borrowers defaulting on their loans within two or three years of entering repayment—among the assessments of aid worthiness. Instead, they just use debt-to-earnings ratios. The American Association of Private Sector Colleges and Universities—proprietary colleges’ advocacy arm—suspects this was done because including the default rate was projected to ensnare some community colleges, and the administration wanted this to be all about for-profit institutions.

There is reason to believe this may be true. The administration has lauded community colleges as the Little Schools That Could for a long time, and, indeed, directly compared them to for-profit schools in its press release for the new regulations. “The situation for students at for-profit institutions is particularly troubling,” they wrote. “On average, attending a two-year for-profit institution costs a student four times as much as attending a community college.” What didn’t they mention? According to federal data, completion rates at community colleges are around 20 percent, versus 63 percent at two-year for-profits. The data aren’t perfect—they capture only first-time, full-time students who finish at the institution where they started—but it is a yawning gap that illustrates a crucial point not just about gainful employment, but overall higher education policy: emotions and political concerns, not objective analysis, seem to drive it.

And speaking of objective analysis: We will be hosting what should be a great, diverse panel discussion on Wednesday, November 5, that will look at the changing face of higher education—including, no doubt, gainful employment—as well as offer predictions about what the previous night’s election results might mean for higher education. Hope to see you there!

Patrick J. Michaels

Increasingly, federal monies have been disbursed to the various departments and agencies in support of the Obama administration’s politically strange perseveration on global warming. Specifically, many millions go out each month for “public outreach,” more properly labeled propaganda, on the horrors of climate change.

To show how well-spent this money is, we draw attention to today’s posting from the Department of Energy’s communication director Marissa Newhall, featuring pumpkins with windmills (the correct name for “wind turbine”) and solar panels carved on them. A quote:

Last week, we shared some energy-themed pumpkin carving stencils to help you “energize” your neighborhood—and teach trick-or-treaters about energy—this Halloween. On our own time after work, we put the patterns to the test and carved some energy pumpkins of our own.

We’re wondering: were they also ”on their own time after work” when they came up with the “energy-themed pumpkin carving stencils”?

Energyween Pumpkin Carving

Gene Healy

Good news: after nearly three months of airstrikes in Iraq and Syria, the branding’s finally caught up to the bombing. Our latest war in the Middle East finally has a name: “Operation Inherent Resolve” is what we’re calling it, the Pentagon recently announced. DoD planners had initially rejected that name as uninspiring and “just kind of bleh,” but after several weeks of fruitless searching, they’ve decided it’s the best we can do.

Here’s Defense.gov’s banner graphic for “Operation Inherent Resolve”: simple, spare, sort of Sisyphean. 

Actually, with its air of uninspired resignation, “Inherent Resolve” suits well enough, even if something like “Operation Eternal Recurrence” might have fit better. But it surely says something that, as with hurricanes, we’re running out of cool names for the wars presidents launch.

Now that we know what to call it, what should we make of Obama’s latest military intervention and how it fits into the president’s emerging legacy on constitutional war powers? Jack Goldsmith and Matthew Waxman have an important piece on that subject in the New Republic, arguing that “it is Obama, not Bush, who has proven the master of unilateral war.” “The war powers precedents Obama has established,” they explain, “will constitute a remarkable legacy of expanded presidential power to use military force.”

It’s a remarkable legacy, all right, though I might put somewhat less emphasis on “precedent” as such. Taken individually, as Goldsmith and Waxman acknowledge, very few of Obama’s actions are wholly unprecedented. But taken as a whole, the president’s approach to war powers begins to look like something new under the sun. As I argued recently at The Federalist, Obama will “go down in history as a ‘transformational’ president, having completed America’s transformation into a country where continual warfare is the post-constitutional norm.”

Presidents and Precedents 

Goldsmith and Waxman identify “new precedents in three areas.” First, they argue that the 2011 Libya intervention (“Operation Odyssey Dawn”) marked an expansion of presidential power to launch airstrikes without congressional authorization, pointing to the Obama Office of Legal Counsel (OLC) argument that “such large-scale, non-consensual ‘airstrikes and associated support missions’ did not amount to ‘War’ that required congressional consent.”

The “police action” Truman ordered in Korea was war on a much larger scale (and with a less awful euphemism than the Obama team’s preferred coinage, “kinetic military action”—what’s the alternative, “static action”?) But perhaps Korea is something of an anti-precedent, as no president since has dared launch a ground invasion of that magnitude without seeking congressional cover. As Goldsmith and Waxman note, Bill Clinton’s 1999 air war over Kosovo is probably the closest parallel to Obama’s Libyan adventure 12 years later. The Obama OLC opinion on Libya “brought the Kosovo rationale out of the legal shadows and probably extended it. It will stand as the major precedent for unilateral presidential war from the air.”

It’s worth noting that both presidents waged war in the face of congressional votes refusing to authorize military action. In the Kosovo case, on March 24, 1999, the Senate passed a resolution supporting the bombing, but a month later the House voted down a declaration of war (427 to 2) and authorization for the airstrikes (213 to 213). “There’s broad support for this campaign among the American people, so we sort of just blew by” the House votes, the National Security Council spokesman said at the time. The House muddied the waters considerably by also voting down a resolution requiring the president to terminate the airstrikes immediately. I’d originally thought that Obama conducted the Libyan intervention amid congressional silence, but actually, in June 2011 (three months after the Tomahawks started flying), the House got around to voting on authorization and overwhelmingly rejected it (while rejecting, by a similar margin, a funding bill that would have ended direct combat operations. Sigh.)

The second precedent Goldsmith and Waxman identify is “the hole [the Obama administration] blew in the 60-day limit on unauthorized presidential uses of force imposed by the 1973 War Powers Resolution (WPR).” But here again, Clinton went first with Kosovo, with a 79-day bombing campaign that made him the first president to conduct a war beyond the WPR’s 60-day barrier. Still, Goldsmith and Waxman are right to identify the legal rationale the Obama administration advanced as especially troubling.

In Kosovo, the Clinton OLC argued that Congress had implicitly authorized a continuation of the Kosovo operation past the 60-day limit by appropriating funds for the mission. That argument was unavailable to the Obama team as the WPR clock ran out. Its solution, accomplished with an end-run around an objecting OLC, was to rely on then-State Department legal adviser Harold Koh’s risible argument that if you bomb a country, but they probably can’t hit you back, you’re not engaged in “hostilities” within the meaning of the War Powers Resolution. As James Mann has pointed out, “by that logic, a nuclear attack would not be a war.” It’s a far broader rationale than the one advanced by the Clinton team, and one that opens the door for any future president to make war at will, for extended periods, so long as he does it from a great height.

The final precedent Goldsmith and Waxman identify is the most important: the president’s staggeringly broad interpretation of the authorization for the use of military force (AUMF) Congress passed three days after the September 11 attacks, empowering the president to wage war against the perpetrators of 9/11 and those who “harbored” them. The Obama administration “extended the AUMF’s mandate dramatically, and gave its most expansive interpretation, when it pronounced last month that the statute applied to the Islamic State,” despite the fact that ISIS is an even worse fit with the plain language of the AUMF than the AQ “associated forces” targeted under the AUMF, having neither “planned, authorized, committed, or aided” 9/11 attacks, nor “harbored” a group that’s excommunicated them.

Going Permanently ‘Kinetic’

Recently, a report from Politifact evaluated the claim that Obama had bombed more countries than Bush. They rated it “True”—he’s bombed at least seven countries, possibly eight. Politifact couldn’t settle on a precise number. Their report included this intriguing sentence: “both presidents may have bombed the Philippines.” Here again, secret warfare isn’t unprecedented. But given the frequency and pace of operations under the 2001 AUMF, at some point a quantitative difference becomes a qualitative one.

Throughout the 20th century, “presidential wars” were geographically limited, often short and sharp departures from the peacetime norm. In the 21st century, however, we’ve gone permanently “kinetic.” Presidential wars are no longer temporary departures from a baseline of peace. As a “war president,” Barack Obama has institutionalized—and accelerated—a trend that began in the Bush administration: war without temporal or spacial boundaries. The “operational tempo” can range from steady to frantic, but the beat goes on, unceasingly. Perpetual presidential war is becoming “the new normal.”  

Under the AUMF, Obama has launched eight times as many drone strikes as Bush. At a Senate Foreign Relations Committee hearing last year, a top DoD official affirmed that the AUMF would allow the president to put “boots on the ground” in the Congo without further authorization from Congress; Indeed, the Pentagon envisions a war on terror that will go on “at least 10 or 20 years more.” Possibly the AUMF will serve as the basis for President Chelsea Clinton’s (or George P. Bush’s) “kill list” in 2033.

As a candidate for the Democratic nomination in 2008, Barack Obama stood out as one of the few serious contenders who hadn’t voted for the Iraq War; as a state senator in 2002, he’d decried it as a “dumb war.” Now his administration cites the 2002 authorization for that “dumb war” as a possible source of authority for another one, 12 years later. Meanwhile, as Goldsmith and Waxman write, “the man who hoped to end the war under the 2001 AUMF, and who pledged to fight expansions of its mandate, [has] unilaterally interpreted it to broaden its substantive reach geographically and its temporal reach far into the future.”

It’s said that Obama privately worries that expanded executive powers will lie around like a “loaded weapon” for future presidents to abuse. If so, he’s apparently decided it’s a worry he can live with, through all the “dumb wars” to come.

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 109 countries based on “misery.” Below the jump are the index scores are for 2013. Countries not included in the table did not report satisfactory data for 2013.

Steve H. Hanke

For a clear snapshot of a country’s economic performance, a look at my misery index is particularly edifying. The misery index is simply the sum of the inflation rate, unemployment rate and bank lending rate, minus per capita GDP growth. 

The epicenter of the Ebola crisis is Liberia. My October 15, 2014 blog reported on the level of misery in and prospects for Liberia.

This blog contains the 2012 misery indexes for Guinea and Sierra Leone, two other countries in the grip of Ebola. Yes, 2012; that was the last year in which all the data required to calculate a misery indexes were available. This inability to collect and report basic economic data in a timely manner is bad news. It simply reflects the governments’ lack of capacity to produce. If governments can’t produce economic data, we can only imagine their capacity to produce public health services.

With Ebola wreaking havoc on Guinea and Sierra Leone, the level of misery is, unfortunately, very elevated and set to soar.

Daniel R. Pearson

The U.S. Department of Commerce (DOC) announced Oct. 27 that it had reached draft agreements with Mexican sugar exporters and the Mexican government to suspend antidumping and countervailing duty (AD/CVD) investigations on imports of sugar from that country.  Commerce has requested comments from interested parties by Nov. 10, with Nov. 26 indicated as the earliest date on which the final agreements could be signed.  Given the obvious level of consultation by governments and industries on both sides of the border leading up to this announcement, it’s reasonable to presume that the agreements will enter into effect within a few weeks.

Suspension agreements that set aside the AD/CVD process in favor of a managed-trade arrangement are relatively rare.  They sometimes are negotiated when the U.S. market requires some quantity of imports, and when the implementation of high AD/CVD duties would be expected to curtail trade severely.  This would have been the case, assuming the duties actually had entered into effect.  However, as this recent blog post indicates, it’s not at all clear that the U.S. International Trade Commission (ITC) would have determined that imports from Mexico were injuring the U.S. industry.  A negative vote (a vote finding no injury) by the ITC would have ended these cases and left the U.S. market open to imports of Mexican sugar. 

What are the key provisions of the agreements?  There are restrictions on both the price and quantity of imports from Mexico.  Sugar will only be allowed to be imported into the United States if it is priced above certain levels:  20.75 cents per pound (at the plant in Mexico) for raw sugar, and 23.75 cents per pound for refined sugar.  (For comparison, U.S. and world prices for raw sugar currently are about 26 cents and 16 cents, respectively; for refined sugar about 37 cents and 19 cents.)  Additional price controls on individual Mexican exporters based on their alleged prior dumping (selling at a price the DOC determines to be less than fair value) will further raise the prices at which they will be allowed to sell.

Quantity restrictions on imports will be imposed through a formula related to supply and demand conditions in the U.S. market.  A knowledgeable sugar industry analyst has calculated that Mexican exporters would be allowed to sell a minimum of approximately 1.3 million metric tons raw value (MMTRV) during the 2014-15 marketing year (Oct. 1, 2014 to Sept. 30, 2015).  Depending on market conditions next spring and summer, that figure may rise to around 1.45 MMTRV.  (Over the past seven years, imports from Mexico ranged between 0.629 MMTRV and 1.927 MMTRV.)  No more than 60 percent of Mexico’s exports may be in the form of refined sugar.  The timing of import arrivals will be controlled.  Mexico will utilize export licenses to prevent more than 30 percent of its allowed sales from arriving in the United States during the October-December quarter, and no more than an additional 25 percent during January-March.

Since 2008 when NAFTA’s sugar provisions were fully implemented, there has been an open border for bilateral trade in sweeteners.   Now that trade will be subject to a tightly controlled regime in which both governments will play important roles in making sure that market forces are not allowed to operate. 

Who are the likely winners and losers from this new arrangement?  As might be expected, the U.S. sugar industry got pretty much everything it wanted.  Both price and quantity will be constrained in ways that keep the U.S. market isolated from the world.  U.S. growers can be expected to continue to enjoy artificially inflated earnings. 

Mexican growers got perhaps half of what they wanted.  True, they have at least temporarily given up the open access to the U.S. sugar market that was negotiated under NAFTA.  However, they have staved off what may have been the complete loss of their most important export market, in the event the ITC had ruled against them.  They have obtained guaranteed access for slightly more than the quantity of sugar that had been exported to the United States on average in the seven years since NAFTA’s full implementation.  And, as an additional benefit, the price restrictions imposed by the DOC will mean that they are likely to sell at higher prices in this managed market than would otherwise have been the case.

Officials in the U.S. Department of Agriculture (USDA) who run the sugar program also likely see themselves as benefitting from the suspension agreements.  They have the rather unenviable task of trying to manage sugar supplies from all sources.  This not only includes imports from the 41 countries that have rights to export sugar to the United States under the tariff-rate quota (TRQ) system.  It also encompasses commercial deliveries of sugar produced by U.S. growers, who accepted marketing limits years ago in order to retain their high level of government price support.  Up until now, the only unregulated source of supply to the U.S. sugar market has been imports from Mexico.  Managers of the U.S. market may find it easier to maintain a tight enough balance between supply and demand to prevent the price from falling to the support level.  Low domestic prices lead to costs for USDA, which no doubt generates flak for the people running the program.  (Note:  Making it easier for officials to supplant the invisible hand of the marketplace likely wouldn’t be seen as a good thing by the late free trader, Adam Smith.)

It’s not hard to identify losers from a tightly managed U.S. marketplace.  Anyone who uses sugar is paying more for it than it is worth in the outside world.  A press release by the Sweetener Users Association indicates their concerns that additional import restrictions will lead to greater market uncertainty and higher prices.  Consumers can expect to pay hundreds of millions of extra dollars per year for sugar-containing products.  This cost increase will act like a regressive tax.  Low-income people will forfeit a higher percentage of their incomes to pay for this new consumption “tax” than will people with relatively higher incomes.  (Will the White House criticize the deal because it leads to greater inequality?)

Another likely group of losers are U.S. producers and exporters of high-fructose corn syrup (HFCS).  The United States generally is believed to be the world’s lowest-cost producer of HFCS, which has become the preferred sweetener for soft drinks and other liquid applications in North America.  U.S. exports of HFCS to Mexico have risen more than three-fold since 2007 and recently have amounted to a million metric tons per year.  (Liberalization under NAFTA has led to active sweetener trade in both directions.)  The suspension agreement generates uncertainty for HFCS producers because sugar that otherwise would have been exported from Mexico to the United States now may stay south of the border and be used instead of HFCS in soft drinks.  It would not be surprising to see a notable decline in HFCS exports in the coming years. 

On the other hand, Mexico had made clear its intention to retaliate in some form in the event AD/CVD duties were implemented against sugar, with HFCS being a likely target.  (Note:  Such retaliation likely would not be consistent with Mexico’s obligations under NAFTA and the WTO, but those commitments have not been much of a restraint in the past.  The history of bilateral sweetener disputes provides ample evidence of Mexico’s ability to discriminate against imports of HFCS.)  Thus, the U.S. HFCS industry may be hurt less by the suspension agreement than it would have been hurt by Mexico’s reaction to an adverse decision at the ITC.  (Why is it that efficient industries often seem to suffer harm when governments try to protect inefficient industries?)

Of course, the U.S. and Mexican economies also will be losers under the settlement agreement.  Both will tend to see scarce resources being allocated more poorly.  GDP will be lower in each country, although minimally.  Since the effects will be small, should we be concerned?  The main concern is that this is one more among many policy choices in which the U.S. government has sided with special interests at the expense of the public interest.  Could that be a reason that the economy has struggled to get back on its feet?

Which leads to the final loser:  U.S. international trade policy.  The United States currently is negotiating trade agreements including the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), and (at least still in theory) the World Trade Organization (WTO) Doha Round. Does making a public statement to the effect that protecting U.S. sugar growers is the central organizing principle of U.S. trade policy do anything to strengthen the hand of U.S. negotiators?  Hardly.  Rather, the suspension agreement with Mexico likely will make it more difficult to persuade Japan to eliminate tariffs on its sensitive agricultural products.  Our Canadian neighbors are being challenged in the TTP to end their highly restrictive dairy and poultry programs.  What kind of message does the sugar suspension agreement send to them?  It might be best if U.S. trade policy was simply to take two aspirin and go to bed until 2017.

Daniel J. Mitchell

Having a vision of a free society doesn’t mean libertarians are incapable of common-sense political calculations.

For example, the long-run goal is to dramatically shrink the size and scope of the federal government, both because that’s how the Founding Fathers wanted our system to operate and because our economy will grow much faster if labor and capital are allocated by economic forces rather than political calculations. But in the short run, I’m advocating for incremental progress in the form of modest spending restraint.

Why? Because that’s the best that we can hope for at the moment.

Another example of common-sense libertarianism is my approach to tax reform. One of the reasons I prefer the flat tax over the national sales tax is that I don’t trust that politicians will get rid of the income tax if they decide to adopt the Fair Tax. And if the politicians suddenly have two big sources of tax revenue, you better believe they’ll want to increase the burden of government spending.

Which is what happened (and is still happening) in Europe when value-added taxes were adopted.

And that’s a good segue to today’s topic, which deals with a common-sense analysis of the value-added tax.

Here’s the issue: I’m getting increasingly antsy because some very sound people are expressing support for the VAT.

I don’t object to their theoretical analysis. They say they don’t want the VAT in order to finance bigger government. Instead, they argue the VAT should be used only to replace the corporate income tax, which is a far more destructive way of generating revenue.

And if that was the final–and permanent–outcome of the legislative process, I would accept that deal in a heartbeat. But notice I added the requirement about a “permanent” outcome. That’s because I have two requirements for such a deal:

1. The corporate income tax could never be reinstated.

2. The VAT could never be increased.

And this shows why theoretical analysis can be dangerous without real-world considerations. Simply stated, there is no way to guarantee those two requirements without amending the Constitution, and that obviously isn’t part of the discussion.

So my fear is that some good people will help implement a VAT, based on the theory that it will replace a worse form of taxation. But in the near future, when the dust settles, the bad people will somehow control the outcome and the VAT will be used to finance bigger government.

Here are examples to show why I am concerned.

Here’s some of what Tom Donlan wrote for Barron’s.

…the U.S. imposes the highest corporate tax rate in the developed world. Make no mistake, corporations pay no tax. That is a tax on American consumers, American workers, and American shareholders.  Don’t think that the corporate income tax eases your personal tax burden. Add your share of the corporate income tax to the other taxes you pay.  Better yet, create a business tax we can all understand. A value-added tax is a tax on consumption. We would pay it according to the amount of the economic resources we choose to enjoy, and we would not pay it when we choose to save and invest in making the economy bigger and more productive. We would pay it on imported goods as much as on those domestically produced. The makers of goods for export would receive a rebate on their value-added tax.  Trading the corporate income tax for the value-added tax is one of the best fiscal deals the U.S. could make.

I agree in theory.

America’s corporate tax system is a nightmare.

But I think giving Washington a new source of tax revenue is an even bigger nightmare.

Professor Greg Mankiw at Harvard, writing for the New York Times, also thinks a VAT is better than the corporate income tax.

…here’s a proposal: Let’s repeal the corporate income tax entirely, and scale back the personal income tax as well. We can replace them with a broad-based tax on consumption. The consumption tax could take the form of a value-added tax, which in other countries has proved to be a remarkably efficient way to raise government revenue.

Once again, I can’t argue with the theory.

But in reality, I simply don’t trust that politicians won’t reinstate the corporate tax. And I don’t trust that they’ll keep the VAT rate reasonable.

At this point, some of you may be thinking I’m needlessly worried. After all, journalists and academic economists aren’t the ones who enact laws.

I think that’s a mistaken attitude. You don’t have to be on Capitol Hill to have an impact on the debate.

Besides, there are elected officials who already are pushing for a value-added tax! Congressman Paul Ryan, the Chairman of the House Budget Committee, actually has a “Roadmap” plan that would replace the corporate income tax with a VAT, which is exactly what Donlan and Mankiw are proposing.

…this plan does away with the corporate income tax, which discourages investment and job creation, distorts business activity, and puts American businesses at a competitive disadvantage against foreign competitors. In its place, the proposal establishes a simple and efficient business consumption tax [BCT].

At the risk of being repetitive, Paul Ryan’s plan to replace the corporate income tax with a VAT is theoretically very good. Moreover, the Roadmap not only has good tax reform, but it also includes genuine entitlement reform.

But I’m nonetheless very uneasy about the overall plan because of very practical concerns about the actions of future politicians.

In the absence of (impossible to achieve) changes to the Constitution, how do you ensure that the corporate income tax doesn’t get re-imposed and that the VAT doesn’t become a revenue machine for big government?

By the way, this susceptibility to the VAT is not limited to Tom Dolan, Greg Mankiw, and Paul Ryan. I’ve previously expressed discomfort about the pro-VAT sympathies of Kevin Williamson, Josh Barro, and Andrew Stuttaford.

And I’ve written that Mitch Daniels, Herman Cain, and Mitt Romney were not overly attractive presidential candidates because they’ve expressed openness to the VAT.

This video sums up why a value-added tax is wrong for America.

The Value Added Tax: A Hidden New Tax to Finance Much Bigger Government

Last but not least, let me preemptively address those who will say that corporate tax reform is so important that we have to roll the dice and take a chance with the VAT.

I fully agree that the corporate income tax is a self-inflicted wound to American prosperity, but allow me to point out that incremental reform is a far simpler–and far safer–way of dealing with the biggest warts plaguing the current system.

Lower the corporate tax rate.

Replace depreciation with expensing.

Replace worldwide taxation with territorial taxation.

So here’s the bottom line: If there’s enough support in Congress to get rid of the corporate income tax and impose a VAT, that means there’s also enough support to implement these incremental reforms.

There’s a risk, to be sure, that future politicians will undo these reforms. But the adverse consequences of that outcome are far lower than the catastrophic consequences of future politicians using a VAT to turn America into France.

P.S. You can enjoy some good VAT cartoons by clicking herehere, and here.

P.P.S. I also very much recommend what George Will wrote about the value-added tax.

P.P.P.S. I’m also quite amused that the IMF accidentally provided key evidence against the VAT.

David Boaz

The New York Times launches a series of investigative reports on corporate lobbying of state attorneys general. But you have to read fairly far down in the story to find the “nut graf” on why this is happening now. Radley Balko summed it up in a tweet: “As prosecutors get increasingly powerful, lobbyists will increasingly spend money to try to influence them.” And the article does note that: 

A robust industry of lobbyists and lawyers has blossomed as attorneys general have joined to conduct multistate investigations and pushed into areas as diverse as securities fraud and Internet crimes….

The increased focus on state attorneys general by corporate interests has a simple explanation: to guard against legal exposure, potentially in the billions of dollars, for corporations that become targets of the state investigations.

It can be traced back two decades, when more than 40 state attorneys general joined to challenge the tobacco industry, an inquiry that resulted in a historic $206 billion settlement.

Microsoft became the target of a similar multistate attack, accused of engaging in an anticompetitive scheme by bundling its Internet Explorer with the Windows operating system. Then came the pharmaceutical industry, accused of improperly marketing drugs, and, more recently, the financial services industry, in a case that resulted in a $25 billion settlementin 2012 with the nation’s five largest mortgage servicing companies.

The trend accelerated as attorneys general — particularly Democrats — began hiring outside law firms to conduct investigations and sue corporations on a contingency basis.

I wrote about this 30 years ago in the Wall Street Journal, citing Hayek’s assessment from 40 years before that:

Nobel laureate F.A. Hayek explained the process 40 years ago in his prophetic book The Road to Serfdom: “As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of this directing power.”

As the size and power of government increase, we can expect more of society’s resources to be directed toward influencing government.

Those who work to increase the size, scope, and power of government need to recognize: This is the business you have chosen. If you want the federal government to tax (and borrow) and transfer – and reallocate through prosecution – $3.8 trillion a year, if you want it to supply Americans with housing and health care and school lunches and retirement security and local bike paths, then you have to accept that such programs come with incentive problems, politicization, corruption, and waste. And that special interests will find ways to influence such momentous decisions, no matter what lobbying restrictions and campaign finance regulations are passed.

David J. Armor

W. Steven Barnett’s attempt to rebut my review of preschool research begins with an ad hominem attack on my (and Cato’s) motives for publishing this piece, calling it an “October Surprise” with an aim “to raise a cloud of uncertainty regarding preschool’s benefits that is difficult to dispel in the time before the election.” He omits that my first review of preschool research was published in January, the same month Cato sponsored a public forum on the topic with both pro and con speakers.  The current, expanded review was published now because it took me that long to finish it.  

Of course, it is crucial to let the research and arguments speak for themselves, but for what it is worth, I have no formal affiliation with Cato or any other organization other than George Mason University, while Barnett is Director of The National Institute for Early Education Research (NIEER), whose mission is to “support high-quality, effective early childhood education for all young children.”  Barnett is a long-time advocate of universal preschool, while I had no position on pre-k until I read reports from the national Head Start Impact Study (HSIS).   

Moving on to substantive matters, Barnett says that because the successful Perry and Abecedarian programs were small and more intensive than current proposals, we should devote more resources to replicate them at scale, not discount them as of limited value in indicating how much larger, and different, programs would work.  But current “high quality” pre-K programs, including Abbott pre-K, do not in fact replicate either of these programs.  Moreover, Barnett ignores the national Early Head Start demonstration, a program similar to Abecedarian, which found no significant long-term effects in Grade 5 except for a few social behaviors of black parents–hardly an endorsement to make it universal.  Moreover, this one area of positive effects is tempered by significant negative effects on certain cognitive skills for the most at-risk students. 

The difference in outcomes between the tiny Abecedarian project and the national Early Head Start demonstration program may be simply one of scale and bureaucracy.   There is an enormous difference between designing and implementing a program for a few dozen mothers and infants in a single community and doing the same for thousands of children in many different communities across the country.  In a national implementation, there are many more opportunities for implementation problems in leadership, staffing, program design, and so forth.   

About my criticism of Regression Discontinuity Design (RDD) studies, Barnett says the flaws I describe are “purely hypothetical and unsubstantiated.” But I’m not alone in perceiving them; my concerns are shared by Russ Whitehurst, former Director of the Institute for Education Research in the U.S. Department of Education. More importantly, Barnett says my criticism about attrition (or program dropouts) is pure speculation, which is simply untrue.  

In my review, I reported that the Tulsa, Oklahoma, and Georgia treatment and control groups differed significantly in family background characteristics (Mother’s education and limited English proficiency) that are known to be related to achievement test scores.  The Boston study reported a 20 percent dropout rate from the treatment group, and those students were more disadvantaged than the stay-ins.  It is true, though, that I can’t estimate the dropout problem in Barnett’s 2007 Abbott study;  he does not report or describe attrition rates, nor does he provide any benchmark data that would allow a reader to compare the treatment and control group prior to testing.  For the RDD studies that provide data (many do not), there is no empirical support for Tom Bartik’s suggestion that the dropouts could be children from wealthier families.  Where data has been reported, the dropouts are more disadvantaged on one or more socioeconomic characteristics. 

Barnett next claims that the Head Start and Tennessee evaluations are “not experimental” but quasi-experimental, like the Chicago Longitudinal Study.  Regarding Head Start, Barnett (relying on Tom Bartik), misunderstands a reanalysis of the Head Start data by Peter Bernardy, which I cited.  The original Head Start study found no significant long-term effects.  Bernardy simply did a sensitivity analysis by excluding control group children who had some type of preschool; he found no long-term effects, same as the original Head Start study.  

Regarding the Tennessee experiment, Barnett is correct that I omitted a small positive effect for a single outcome: grade retention.  But he conveniently fails to mention that the Tennessee experiment found no long-term effects for the major outcome variables, including cognitive performance and social behaviors, and there was even a statistically significant negative effect for one of the math outcomes.

He then complains that my cost figures are miscalculated, saying I should subtract costs for existing pre-K programs and use “marginal” rather than average costs per child.  On the first, point, my review simply says that “states could be spending nearly $50 billion per year to fund universal preschool”; there is no need to subtract existing costs because it is simply an estimate of possible peak expenditures.  Regarding marginal vs. average costs, my $12,000 figure is based on 2010 per pupil costs. Current average costs are most certainly higher – the federal Digest of Education Statistics actually places total costs per-pupil at roughly $13,000 – and $12,000 is not unreasonable for marginal costs since 80% of education costs are for teacher salaries and benefits, the primary marginal cost components. 

Barnett then argued that I “omit[ted] much of the relevant research,” implying I would get different results had I included other reviews, especially one by the Washington State Institute for Public Policy (WSIPP) published in January. This is simply inaccurate.  The WSIPP report breaks programs down by state/city, Head Start, and “Model” programs.  Of the 13 state preschool evaluations, my review included 8 (WSIPP counted three different reports for the Tulsa, Oklahoma, program as separate studies).  Of the remaining five programs not in my review, three are RDD studies for Arkansas, New Mexico, and North Carolina with no information on attrition or relevant statistics to compare the treatment and control group at the time of testing.  I did include the New Jersey Abbott program, despite this problem of interpretation, because it is frequently mentioned and promoted as a high-quality preschool program.

Of the three model programs in the WSIPP study, my review included two, Perry Preschool and the Abecedarian project. The third is the IDS program mentioned by Barnett and also reviewed by him in other reports.  I have been unable to obtain a copy of this 1974 study, and Barnett’s review provides very little information about it.  He reports a standardized effect size of .4 at the end of pre-K, but with no documentation about treatment and control group equivalence at the start of preschool. Neither is there information about attrition or dropout rates during the preschool year. It is therefore hard to assess the reliability of this effect.  He acknowledges that a later follow-up study to document long term effects in adulthood suffered from “severe attrition” and may not be reliable. 

Most important, the average standardized effect that WSIPP found for all test scores across all state/city programs was .31, which is only somewhat higher that the average Head Start standardized effect of about .2 across all tests.  One reason the WSIPP effect is higher than Head Start is the inclusion of the extraordinary standardized effects (.9 or so) for the three Tulsa studies.  Furthermore, the WSIPP study also documented the fade-out effect.  

I do not understand Barnett’s claim that the New Jersey Abbott program has effects “three times as large” as the Head Start study.  His 2007 report says the gain in reading at age four  “…represents an improvement of about 28 percent of the standard deviation for the control (No Preschool) group”  and the gain in math “…represents an improvement of about 36 percent of the standard deviation for the control (No Preschool) group”  These represent standardized effects of .28 and .36, which averages out to .33 and thus is about the same as the WSIPP average for all state/city programs.  This is somewhat higher than the Head Start Impact Study (.2) but certainly not three times higher.  Moreover, his study presents no information about attrition for the treatment group, nor does he provide the reader with a table that compares the treatment and control group on socioeconomic characteristics prior to or at the time of testing.

Perhaps the most important point in this debate is something that Barnett does not explain, which is how any of the studies we have discussed support universal preschool.  The only studies that give reliable information – meaning valid research designs with statistically significant results – on long-term benefits such as crime, educational attainment, and employment are the Abecedarian and Perry Preschool programs.  Even assuming that these programs could be generalized to larger populations (holding aside the contrary implications of Early Head Start), these programs apply only to disadvantaged children who need a boost.  There is little justification based on these programs to claim that middle class children will experience the same benefits.

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