Marian L. Tupy
I hope that many of you had a chance to check out Cato’s new website: www.humanprogress.org.
In the same vein, here is a just-released video put together by the folks at Science Magazine summing up the greatest scientific advances of 2013:
As G.K. Chesterton put it, “The world will never starve for want of wonders; but only for want of wonder.”
Daniel J. Mitchell
Last year, while writing about the corrupt and self-serving behavior at the IRS, I came up with a theorem that explains day-to-day behavior in Washington.
Simply stated, government is a racket that benefits the D.C. political elite by taking money from average people in America
I realize this is an unhappy topic to be discussing during the Christmas season, but the American people need to realize that they are being pillaged by the insiders that control Washington and live fat and easy lives at our expense.
If you don’t believe me, check out this map showing that 10 of the 15 richest counties in America are the ones surrounding our nation’s imperial capital.
Who would have guessed that the wages of sin are so high?
D.C., itself, isn’t on the list. But that doesn’t mean there aren’t a lot of people living large inside the District.
Here are some interesting nuggets from a report in the Washington Business Journal:
D.C. residents are enjoying a personal income boom. The District’s total personal income in 2012 was $47.28 billion, or $74,733 for each of its 632,323 residents, according to the Office of the Chief Financial Officer’s Economic and Revenue Trends report for November. The U.S. average per capita personal income was $43,725.
Why is income in D.C. so much higher? Well, the lobbyists, politicians, bureaucrats, interest groups, contractors, and other insiders who dominate the city get much higher wages than people elsewhere in the country.
And they get far higher benefits:
In terms of pure wages, D.C., on a per capita basis, was 79 percent higher than the national average in 2012 — $36,974 to $20,656. …Employee benefits were 102 percent higher in D.C. than the U.S. average in 2012, $7,514 to $3,710. Proprietor’s income, 137 percent higher — $9,275 to $3,906. …The numbers suggest D.C. residents are living the high life.
Below is a chart from Zero Hedge comparing income growth for both D.C. and the nation as a whole over the last few decades. It uses median household income rather than total personal income, so the numbers don’t match up exactly with the numbers from above. Regardless, it shows how D.C. income grew faster than the rest of the nation during the Bush years, and then even more dramatically during the Obama years.
Want some other examples of profitable Washington sleaze? Here are some excerpts from Rich Tucker’s column for Real Clear Policy:
The real place to park your money is in Washington, D.C. That’s because the way to get ahead isn’t to work hard or make things; it’s to lobby Washington for special privileges. Look no further than the sweet deal the sugar industry gets. It’s spent about $50 million on federal campaign donations over the last five years. So that would average out to $10 million per year. Last year alone, the federal government spent $278 million on direct expenditures to sugar companies. That’s a great return on investment.
Big Corn may get an even better deal than Big Sugar:
Until 2012, the federal government provided generous tax credits to refiners that blended ethanol into gasoline. In 2011 alone, Washington spent $6 billion on this credit. The federal government also maintains tariffs (54 cents per gallon) to keep out foreign ethanol, and it mandates that tens of billions of gallons of ethanol be blended into the American gasoline supply. Nothing like a federal mandate to create demand for your product. How much would you pay for billions of dollars worth of largesse? Well, the ethanol industry got a steep discount. In 2012, opensecrets.org says, the American Coalition for Ethanol spent $212,216 on lobbying.
Rich warns that the United States is sliding in the wrong direction:
What makes Washington especially profitable is that its only products are the laws, rules, and regulations that it has the power to force everyone else to follow. …[W]e seem to be sliding toward what the authors term “extractive” institutions. That means government [is] using its power to benefit a handful of influential individuals at the expense of everyone else.
And let’s not forget that some people are getting very rich from Obamacare while the rest of us lose our insurance or pay higher prices.
This Reason TV interview with Andrew Ferguson explains that there is a huge shadow work force of contractors, consultants, and lobbyists who have their snouts buried deeply in the public trough:Washington’s Parasitic Economy with The Weekly Standard’s Andrew Ferguson
I particularly like his common sense explanation that Washington’s wealth comes at the expense of everyone else. The politicians seize our money at the point of a gun (or simply print more of it) to finance an opulent imperial city.
So if you’re having a hard time making ends meet, remember that you should blame the crowd in Washington.
P.S.: Despite Republican claims of being the party of free markets and smaller government, the insider corruption of Washington is a bipartisan problem. Indeed, some of the sleaziest people in D.C. are Republicans.
P.P.S.: Though scandals such as Solyndra show that Obama certainly knows how to play the game.
P.P.P.S.: Making government smaller is the only way to reduce the Washington problem of corrupt fat cats.
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.”
We know this: Every holiday season some of our readers make some offhanded comment at a party, to the effect that, well, global warming (or its effects) appear to have been a bit overblown. Before you finish, you’re likely to be assaulted by a sharp ranch dressing-laden carrot stick or you might get a face full of dill-dipped broccoli.
Fight back! Before things escalate to the level of food assaults, trot out some of the facts in this, our annual guide for holiday parties.
First of all, the tendency for prominent findings about the impacts from human-caused global warming to be “worse than we thought” is not only a pure play for press coverage, but also strains, if not obliterates, scientific credibility.
The unscientific preponderance of “worse than we thought” stories is starting to become more widely recognized (although we have been talking about it for years). And it is having consequences. Fresh from accepting his Nobel Prize for physiology/medicine, University of California’s Randy Schekman announced that his lab would no longer be sending any research papers to “luxury journals” like Science and Nature because of their preference to select papers “that will make waves because they explore sexy subjects.” Schekman explains that “These journals aggressively curate their brands, in ways more conducive to selling subscriptions than to stimulating the most important research.” Global warming alarmism is a prime example of this.
In fact, there are scientific studies that conclude that things aren’t likely to be worse than we thought, but looking to the “luxury journals” or to the press to highlight them is a fool’s errand.
But that’s where we can help!
In the spirit of this season of good cheer, and as a respite for the increasing number of those out there suffering from “apocalypse fatigue,” your obedient servants at the Center for the Study of Science are here to bring you a little holiday joy and good news.
Below, we’ve collected some clips and quips culled from the recently published scientific literature (and observations) that show that perhaps the impacts from climate change resulting from our production of energy from fossil fuels isn’t going to worse than we thought—and, in fact, may not prove to be so bad at all.
Coral reefs are supposed to suffer badly under a process called “ocean acidification” in which the pH levels of the oceans drop as more carbon dioxide (a result of burning fossil fuels) is absorbed by ocean waters. The resulting pH drop is supposed to erode the shells of calcifying organisms such as those that build coral reefs. A recent study summed up the doom and gloom outlook:
Coral communities may have limited capacity to adapt to levels of acidification projected for the 21st century, and that healthy coral reefs could cease to exist within this time frame. [citations omitted]
But new research by Kathryn Shamberger and colleagues describes the existence of coral reefs in locations that, for a variety of reasons, have naturally occurring acidification levels on par with those projected to result from human carbon dioxide emissions. The authors write:
Here, we report the existence of healthy, diverse coral reef communities living under levels of natural acidification approaching those projected for the tropical western Pacific open ocean by 2100. Understanding the combinations of genetic and/or environmental factors that enable coral reefs to thrive under relatively extreme conditions … will help to improve projections of reef health.
Apparently, in the real world, coral reef communities can well-adapt to the prevailing conditions.
Arctic Sea Ice
A new paper characterizes the situation with Arctic sea ice:
The observed reduction in sea-ice extent has been significantly faster than projected by most numerical models using realistic anthropogenic increases in greenhouse gases. The mismatch between observations and models can arise from: model underestimation of the sensitivity of sea ice to radiatively forced climate change, incorrect or missing types of radiative forcing, and/or nonmodelled natural variability. [citations omitted]
The first two potential reasons why the observed Arctic sea ice decline (note that in the Antarctic, sea ice has increased contrary to model projections) has been faster than model projections imply things are “worse than we thought.” But this new research favors the latter explanation—that is, the decline from global warming has been boosted (temporarily) by natural variability acting in the same direction. From a paper by Martin Miles and colleagues:
These results imply that the AMO [natural variability operating over the Atlantic Ocean basin] may be an important factor in the faster-than-projected decreases in sea ice, in qualitative agreement with a recent modelling–satellite-data analysis [Day et al., 2012] that attributes up to 5–30% to the satellite-era (1979–2010) summer sea-ice decrease to the concurrent AMO warm phase, and an even higher proportion for the winter sea ice.
In other words, the influence from human-caused global warming is not “worse than we thought.”
Great Lakes Water Levels
Another doom and gloom climate change projection is that the water levels in the Great Lakes will fall dramatically, interfering with (degrading) all sorts of environmental and economic activities. Last year’s Midwestern drought was a sign to some that things were even worse than we thought.
A new paper by Carl Watras and colleagues sums up the situation:
During the past decade, unusually low water levels have been observed in both the NHLD [Northern Highland Lake District of Wisconsin] and the upper Great Lakes. Following a peak in 1998, NHLD water levels have trended downward for roughly 12 years – reaching a record low elevation in 2010. Similarly, the water level of Lake Michigan-Huron recently dropped at a rate not seen since the 1930s mega-drought. Both Lake Superior and Lake Michigan-Huron have been consistently below average level for the longest sustained period in their historical records; and in January 2013 Lake Michigan-Huron reached an all-time low water level. [citations omitted]
Watras et al. go on to conclude that the low water levels of the past 12 years may “mark the onset of a new hydroclimatic regime.”
But, in what is an incidence of unfortunate timing, just as the Watras paper was being published, Mother Nature has made her own announcement. After reaching historic (or nearly so) low lake levels during the beginning of 2013, over the course of this year, and as a result of ample precipitation, the water levels in the Great Lakes have risen rapidly. The Detroit Free Press observes:
A snowy winter and wet spring and summer led to an almost unprecedented recovery of Great Lakes levels this year, officials with the U.S. Army Corps of Engineers and National Oceanic and Atmospheric Association said Wednesday.
The extended lake level forecasts keep the water levels near or just-below normal for the foreseeable future.
Perhaps a new climate regime of low Great Lakes water levels is not upon us. In fact, the situation doesn’t look to be worse than we expected after all.
Global warming has been variously predicted to slow down, or even shut down, the Gulf Stream, wreaking havoc on the climate on both sides of the North Atlantic and leading to sea level rise along the U.S. East Coast that may even be worse than expected from warming oceans and melting ice.
Last summer, an article in USA Today stoked these fears with its coverage of a just-published article in the one of the “luxury journal” offshoots—Nature Climate Change:
From Cape Hatteras, N.C., to just north of Boston, sea levels are rising much faster than they are around the globe, putting one of the world’s most costly coasts in danger of flooding, government researchers report.
U.S. Geological Survey scientists call the 600-mile swath a “hot spot” for climbing sea levels caused by global warming. Along the region, the Atlantic Ocean is rising at an annual rate three times to four times faster than the global average since 1990, according to the study published Sunday in the journal Nature Climate Change.
It’s not just a faster rate, but at a faster pace, like a car on a highway “jamming on the accelerator,” said the study’s lead author, Asbury Sallenger Jr., an oceanographer at the agency.
Now, a newly-published study says “nonsense” to this claim. Tom Rossby and colleagues looked at 20 years of direct measurements of Gulf Stream behavior and found no evidence at all that it is slowing down or effecting sea level rise along the East Coast. Rossby et al. took direct aim at the findings highlighted by USA Today:
Recently, two papers have suggested that the [Gulf Stream] may be weakening based on the well-documented accelerated Sea Level Rise (SLR) along the U.S. east coast (Sallenger et al., 2012; Ezer et al., 2013). …In contrast to these recent assertions of a weakening Gulf Stream our direct measurements of Gulf Stream currents for the past 20 years indicate no such trend…”
Not only is the situation not “worse than we thought,” but it is leaning toward being even “not as bad as we thought.”
North American Pika
And we’ll end with something warm and fuzzy—the North American pika. This little critter has long appeared on global-warming-is-going-to-kill-all-things-cute-and-cuddly posters, alongside polar bears, puffins, sea turtles, etc. The story goes that as the climate warms, the high-altitude, cold weather-loving pikas will be pushed off their mountain-top refuges and into extinction.
New research, however, shows that the pikas aren’t quite so prone to climate change extermination after all. According to the authors of a soon-to-be-published paper in the Journal of Mammalogy, by altering their foraging behavior and diet,
“[Pikas] may be more resistant to climate change than we thought.”
Call us stunned—not!
So there you have it, a stocking’s full of good news regarding climate change.
All of this could come in handy during holiday cocktail parties and post-dinner conversations—FIGHT CARROT STICKS WITH FACTS!!!
Miles, M. W., et al., 20130. A signal of persistent Atlantic Multidecadal variability in Arctic sea ice. Geophysical Research Letters, DOI: 10.1002/2013GL058084
Rossby, T., et al., 2013. On the long-term stability of Gulf Stream transport based on 20 yers of diurect measurements. Geophysical Research letters, DOI: 10.1002/2013GL058636
Shamberger, K. E. F., et al., 2013. Diverse coral communities in naturally acidified waters of a Western Pacific reef. Geophysical Research Letters, DOI: 10.1002/2013GL058489
Watras, C. J., et al., 2013. Decadal oscialltion of lakes and aquifers in the upper Great Lakes region of North America: hydroclimate implications. Geophysical Research Letters, DOI: 10.1002/2013GL058679
Jeffrey A. Miron
To address global warming, many economists advocate raising carbon taxes while lowering income taxes or other distorting taxes. This makes sense in principle–if global warming concerns are valid–but in practice the approach can easily generate more cost than benefit.
For those who believe global warming merits a policy response, therefore, the question is whether any policy change can generate greater benefit than cost.
The answer is yes: removal of existing carbon subsidies. As documented by economist Lucas Davis (Berkeley), many countries keep gasoline and diesel prices far below market levels, thus encouraging over-consumption. These subsidies harm economic efficiency, independent of global warming.
Other policies have the same features as carbon subsidies: they reduce economic efficiency and encourage over-consumption of energy. One example is the deductibility of mortgage interest, which means bigger houses and therefore higher heating and cooling bills. A second example is agriculture subsidies, which encourage production in inefficient locales that require energy-intensive techniques like irrigation.
Repeal of all such policies is thus a no-brainer. When policy is shooting the economy in the foot, the best response is less shooting, not new taxes to fund a bullet-proof shoe.
The new budget bill has passed, hiking spending and taxes. Capitol Hill is back to the bipartisan business of mulcting taxpayers.
Unfortunately, Washington can’t afford to wait for fiscal reform. The Congressional Budget Office’s most optimistic estimate, the so-called “baseline,” is that Uncle Sam will add $6.3 trillion more in red ink over the next decade. Annual deficits are expected to begin moving up again in 2016.
More realistic is CBO’s “alternative” scenario, given how politicians usually behave. In this case Uncle Sam would run up $8.8 trillion more in red ink.
These estimates presume good economic times ahead and a minimum of new bail-outs. Unfortunately, that seems over-optimistic. Even the Postal Service continues to lose money.
Moreover, the entitlement tsunami—Social Security, Medicare, Medicaid, and now health insurance subsidies—will not have fully developed by 2023. As a result, warned CBO, without substantial policy changes “debt will rise sharply relative to GDP after.” Put everything together and economist Laurence Kotlikoff figures that unfunded federal liabilities currently exceed $220 trillion.
There’s more. Because federal debt crowds out private investment, CBO estimates that every additional dollar of government debt reduces national saving by 57 cents. As a result, the GDP likely will drop between four and seven percent, or perhaps even more, by 2038.
As I observe in my new column in American Spectator online:
In short, borrowing more causes us to owe more and pay more in interest. At the same time, we will be saving, producing, and earning less. It’s a prescription for economic and budget disaster.
Unwilling to cut spending, Uncle Sam instead would have to raise taxes or borrow ever more. Under the alternative scenario the official (exclusive of Social Security-Treasury transfers) debt to GDP ratio would run around 190 percent by 2038, greater than Greece at its worst. In a paper for the U.S. Monetary Policy Forum earlier this year, economists David Greenlaw, James D. Hamilton, Peter Hooper, and Frederick S. Mishkin posited one scenario under which “The debt/GDP ratio would rise much more rapidly, hitting 304 % of GDP by 2037.”
Moreover, explained CBO, “Growing federal debt would increase the probability of a fiscal crisis, when … the government would thereby lose its ability to borrow at affordable rates.” Based on international experience, David Greenlaw and his colleagues warned “that countries with debt above 80 percent of GDP and persistent current-account deficits are vulnerable to a rapid fiscal deterioration as a result of these tipping-point dynamics.” In that case federal liabilities likely would explode, as they did in the 2008 financial crisis.
The feedback loop would continue to worsen. Noted Greenlaw, et al., “If U.S. government finances are not put on a sustainable path, … then the public might expect the Federal Reserve to be forced to monetize this debt. What would then unhinge inflation expectations would be the fear of fiscal dominance, which could then drive up inflation quickly.”
Amazingly, observed David Greenlaw, et al., “As recently as the 1990s, the United State government was running budget surpluses and there was serious discussion of what would happen if the federal government was able to retire its debt.” That world is long gone, probably forever.
Still, Washington is celebrating Good News! For the first time in five years, the annual federal deficit has dropped below $1 trillion.
Alas, the cheery interlude will be brief. Soon the red ink again will be growing, and the more government spends and taxes, the worse will be the economic impact. No wonder CBO warned of “the unsustainable nature of the federal government’s current tax and spending policies.”
Washington only faces “difficult choices,” in CBO’s words. America’s political leaders should be choosing among them instead of passing another dishonest feel-good budget agreement.
If you’ve been reading Cato at Liberty and www.cato.org, then you already know, as the lead story in the Washington Post reported this morning, that both the constitutionality and the necessity of the NSA’s massive surveillance are in doubt:
From the moment the government’s massive database of citizens’ call records was exposed this year, U.S. officials have clung to two main lines of defense: The secret surveillance program was constitutional and critical to keeping the nation safe.
But six months into the controversy triggered by former NSA contractor Edward Snowden, the viability of those claims is no longer clear.
In a three-day span, those rationales were upended by a federal judge who declared that the program was probably unconstitutional and the release of a report by a White House panel utterly unconvinced that stockpiling such data had played any meaningful role in preventing terrorist attacks.
Immigration and Customs Enforcement (ICE) released figures showing that they deported fewer people during FY2013 than any year since FY2008 –368,644. But that number is still higher than at any time during the Bush administration despite the unauthorized immigrant population peaking in 2007. Just eyeballing the bottom graph confirms that the level of deportations is largely explained by the size of the unauthorized immigrant population (R-Squared=813). The more unauthorized immigrants there were, the higher the number of deportations.
Source: Department of Homeland Security and author’s estimate.
So how does Obama’s enforcement record compare to the years before he took office? Is he under-enforcing or over-enforcing immigration laws relative to what we’d expect given the size of the unauthorized immigrant population?
President Obama is over-enforcing immigration laws. During his administration a yearly average of 3.37 percent of all unauthorized immigrants have been deported every year compared to just 2.3 percent during President George W. Bush’s administration. It is true that deportation as a percent of the unauthorized immigrant population have slackened in 2013 but that is still above any year during the Bush administration.
Source: Department of Homeland Security, Pew, and author’s estimate.
Shifting subjects a bit, these deportation numbers point to just how effective immigration enforcement is. There are only 11.7 million unauthorized immigrants in the United States – an admittedly large number – but much smaller than I would expect given the tremendous economic gains from coming here. Measured in that way, most would-be unauthorized immigrants actually follow our laws.
Last June I wrote a post where I was shocked at just how low the total number of unauthorized immigrants is. Here is an updated chart from that post using data that is more specific to the characteristics of the immigrants themselves and the skilled-specific occupations they’re most likely to have in the United States.
Median Earnings, US Full Time
Income in Home Country
1st Year Wage Gain/SmugglingBrazil
Source: 2011 American Community Survey, DHS, Havocscope, Center for Global Development
Our immigration laws are terribly restrictive, do great harm to immigrants and Americans, and are responsible for creating such a large unauthorized immigrant population in the United States. But immigration laws, unlike most other laws, are intended to regulate foreigners more than Americans, so just examining the number of unauthorized immigrants in the U.S. is not a good measure of how well-followed or enforced these laws are. Given the number of people who want to immigrate here, the relatively low price of coming here illegally, and the tremendous economic gains from doing so, our immigration laws are shockingly well-enforced and followed by most people of the world.
On Thursday, [Democrat State Senator Capri] Cafaro released the following statement in regard to Senate Bill 248 [a.k.a. “Teddy’s Law”]:
“SB 248 was never meant to be a policy debate about educating children in the home. It was meant to address weaknesses in the law pertaining to child protection. Unfortunately, the true intent of the bill to curtail child abuse has been eclipsed the by the issue of homeschooling.”
In fact, the bill was entirely about homeschooling. The bill would have forced all would-be homeschoolers to seek permission from the government to educate their own children at home. Homeschooling parents would have had to submit to background checks and social services would interview each member of the family separately, then the government would decide whether homeschooling was in the children’s “best interest.” In other words, the government would treat all homeschooling parents as child abusers until proven innocent.
It is said that the price of liberty is eternal vigilance. This episode demonstrates that vigilance pays off.
The “President’s Review Group on Intelligence and Communications Technologies” has issued their report. Convened in late summer to advise the president on what to do in the wake of the Snowden revelations (without mentioning Snowden), the group was rightly criticized for its ‘insider’ composition. The report has beaten the privacy community’s low expectations, which is good news. It advances a discussion that began in June and that will continue for years.
- Contrary to expectations, the report is outside the White House’s “comfort zone.” That’s good, because, as noted, this group could easily have decided to ratify the status quo, handing the administration and the National Security Agency a minor victory. The report positioned Senate Judiciary Committee chairman Patrick Leahy (D-VT) to say: “The message to the NSA is now coming from every branch of government and from every corner of our nation: You have gone too far.”
- There is no reason to treat the report as a reform “bible.” This was a problem with the 9/11 Commission report, for example, which was held up as sacrosanct even when it was wrong. The Review Group report is right about some things, such as eliminating administratively issued National Security Letters, it is wrong about some things, and it omits some key issues, such as the government-wide penchant for secrecy that created the current problems.
- Weaknesses are more interesting than strengths, and a particular weakness of the report is its call for retaining the phone calling surveillance program. Recommendation Five calls for legislation that “terminates the storage of bulk telephony meta-data by the government under [USA-PATRIOT Act] section 215, and transitions as soon as reasonably possible to a system in which such meta-data is held instead either by private providers or by a private third party.” The debate over data retention mandates ended some years ago, and the government was denied this power. The NSA’s illegal excesses should not be rewarded by giving it authorities that public policy previously denied it. Outsourcing dragnet surveillance does not cure its constitutional and other ills.
- The data retention recommendation is in conflict with another part of the report, which calls for risk management and cost-benefit analysis. “The central task,” the report says, “is one of risk management.” So let’s discuss that: Gathering data about every phone call made in the United States and retaining it for years produces only tiny slivers of security benefit, the NSA’s unsupported claims to the contrary notwithstanding. Considering dollar costs alone, it almost certainly fails a cost-benefit test. If you include the privacy costs, the failure of this program to manage security risks effectively is more clear. The Review Group’s conclusion about communications surveillance is inconsistent with its welcome promotion of risk management.
Most legal scholars and most civil liberties and privacy advocates punt on security questions, conceding the existence of a significant threats, however undefined and amorphous. They disable themselves from arguing persuasively about what is “reasonable” for Fourth Amendment purposes. Concessions like these also prevent one from conducting valid risk management and cost-benefit analysis. Some of us here at Cato don’t shy from examining the security issues, and we do pretty darn good risk management. The Review Group should practice what it preaches if it’s going to preach what we practice!
From the Miami Herald:
President Barack Obama on Thursday issued 13 pardons and commuted the sentences of eight individuals.
The commuted sentences involved men and women serving long terms on drug charges, including several sentenced to life without parole.
“Each of them has served more than 15 years in prison,” Obama noted. “In several cases, the sentencing judges expressed frustration that the law at the time did not allow them to issue punishments that more appropriately fit the crime” …
Another prisoner whose sentence Obama commuted, Clarence Aaron of Mobile, Ala., was sentenced to life without parole in 1993 following his conviction on cocaine charges. Aaron has been a “model prisoner (who) has taken courses in religious studies, economics, Spanish, photography and behavioral development,” according to Families Against Mandatory Minimums.
Obama’s actions here are welcome news to the prisoners and their families, but, from a big picture perspective, the president’s actions are stingy and long overdue. For additional background, go here and here. The Pardon Power blog has more details.
Flashback: I call for the Bush administration (2007!) to pardon Clarence Aaron.
On Wednesday, the Congressional Budget Office (CBO) released a cost-estimate for the Legal Workforce Act (H.R. 1772). That bill is one part of the House Republican’s immigration reform package that would nationally mandate a version of E-Verify.
Source: CBO Cost Estimate for H.R. 1772 Legal Workforce Act, page 2.
CBO notes that many unverifiable employees will be pushed deeper into the underground economy by E-Verify – something that is already occurring in states that mandate its use. Some employers would no doubt continue to pay unverified employees, but would do so off the books and off the radar of the IRS and Social Security Administration. While the government would receive an expected $49 billion in on-budget revenues from new sources of income tax revenue and payroll tax revenue from 2014 to 2023, it would lose $88 billion in off-budget revenue during the same period – mostly from Social Security payroll taxes lost as workers join the underground economy. That’s a $39 billion net loss to revenues due mainly to E-Verify.
My colleagues and I have written extensively about the threat that E-Verify poses to employees, employers, and civil liberties. The CBO estimates that expanding E-Verify would cost the federal government $635 million over the 2014-2018 period, followed by a similar amount from 2018 to 2023. That translates to roughly $1.2 billion in new hires, data retention systems, enforcement tools, and other goodies for the Department of Homeland Security.
The Legal Workforce Act would also impose costly new mandates on state and local governments and the private sector. The CBO estimates at least $10 million in total annual costs to be imposed on state and local governments that will be forced to comply (currently, only 20 states mandate the use of E-Verify for new public hires). And the office estimates a minimum cost of $200 million annually from 2016 to 2018 for private sector employers as they struggle to verify an estimated 50 million employees.
The Legal Workforce Act imposes new costs on the federal government, on state and local governments, on employers and employees, and will push some workers further into the underground economy – all without (thankfully) achieving its core objective of excluding unauthorized immigrants from the workforce. While the CBO may not be known for its accurate fiscal projections, the inevitable net fiscal costs of this bill make it hard to draw anything positive from this recent report.
This post was written wtih the help of Scott Platton.
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.” In this edition, we cover an important story that we missed back in 2008.
People send us stuff. As a result of our recent Global Science Report on global warming ruining our bananas, one of our fans directed our attention to an important effect of climate change that we somehow missed, back in 2008, when the alarmists at the BBC wrote that it was threatening haggis.
Haggis, for the uninitiated, is sheep stomach stuffed with minced lung, liver, heart, tongue, suet, onions and oats. How offal!
While there’s no accounting for taste, it tastes as bad as it smells.
According to the story, there has been a rise in a parasite effecting Scottish sheep that renders the lung “unfit for consumption” (something that many of you probably thought was the case already).
And, so as not to miss the bandwagon, an official from the Scottish Agricultural College Veterinary Investigation Centre told the BCC that:
Part of the reason will be the parasite is able to live a pretty happy life on the ground because of higher temperatures. Maybe it’s climate change.
Or maybe not.
It turns out that another potential cause of the increase in the lung parasite is that Scottish farmers have reduced their application of parasite treatment due to declining infections of roundworm. The treatment of roundworm also killed the lung parasite.
There was no mention made in the BCC article as to whether global warming was behind the decrease in roundworm infestations.
Instead, the article went on the describe the events which took place in the World Haggis Eating Championship, won by Willie Robertson from Dunkeld, who managed to put away a pound of haggis in 125 seconds. For his victory, Mr. Robertson was awarded a trophy and a bottle of whiskey—no doubt a key feature in the rest of the day’s merrymaking.
BBC’s writing in the haggis story appears similarly merry. Here are the last three paragraphs of their report, verbatim, a candidate for first place in the 2008 International Nonsequitur Competition.
The championship was held as part of the 125th Birnam Highland Games, and attracted competitors from Australia, New Zealand and the US.
Climate change, meanwhile, has been blamed for affecting natural habitats in Scotland and across the world.
Most notably, scientists and conservationists say it threatens survival of polar bears.
Federal Reserve chairmen are famous for their opaque but sophisticated-sounding comments designed to make it appear that they know more about the shape of the economy than they really do. But outgoing chairman Ben Bernanke’s direct and transparent assertions yesterday about fiscal policy also left me scratching my head.
In response to a reporter’s question about why the economy has not created more jobs:
Bernanke saw several of the usual reasons: the nature of the financial crisis, the housing bust and trouble in Europe. But he added one more. ‘On the whole, except for in 2009, we’ve had very tight fiscal policy,’ he said. ‘People don’t appreciate how tight fiscal policy has been.’
In the usual (and weird) Keynesian view of the economy, government deficits are stimulative while surpluses are “tight” or destimulative. The following chart (based on CBO) shows that in the four years after 2009, we had $4.4 trillion of federal deficit spending, or supposed Keynesian stimulus. Calling that “very tight fiscal policy” is absurd.
Daniel J. IkensonEarlier this month in Bali, WTO ministers reached agreement on a set of negotiating issues known as “trade facilitation,” which deal mostly with customs reform and related measures to reduce the time and cost of transporting goods and services across borders. If removing tariffs is akin to turning on a water spigot full blast, trade facilitation is the act of untangling and straightening out the attached hose. A kinked hose impedes the flow as an administratively “thick” border impedes trade. This paper, which I wrote a few years ago, describes the importance of trade facilitation reforms to economic growth, and explains why subjecting such self-help reforms to negotiation – instead of just undertaking them as a matter of surviving in a competitive global economy – would only delay the process of removing inefficiencies. Five years after the paper was written and 12 years after multilateral negotiations were launched in Doha, a deal was reached obligating governments to reform and streamline their customs procedures, with technical and financial assistance provided by the wealthy to the developing countries. As I wrote yesterday, this is small relative to the overall Doha Round agenda and relative to what might have been accomplished over these past 12 years in the absence of Doha (i.e., without adhering to the pretensions that our own domestic barriers to foreign commerce are assets to be dispensed with only if foreigners dispense of theirs). But perhaps nobody has been more gifted at exposing the absurdity of administrative trade barriers with pithy wit and grace than the 19th century French classical liberal business and economics writer Frederic Bastiat. Around 1850, Bastiat made a case for trade facilitation that can scarcely be improved: Between Paris and Brussels obstacles of many kinds exist. First of all, there is distance, which entails loss of time, and we must either submit to this ourselves, or pay another to submit to it. Then come rivers, marshes, accidents, bad roads, which are so many difficulties to be surmounted. We succeed in building bridges, in forming roads, and making them smoother by pavements, iron rails, etc. But all this is costly, and the commodity must be made to bear the cost. Then there are robbers who infest the roads, and a body of police must be kept up, etc. Now, among these obstacles there is one which we have ourselves set up, and at no little cost, too, between Brussels and Paris. There are men who lie in ambuscade along the frontier, armed to the teeth, and whose business it is to throw difficulties in the way of transporting merchandise from the one country to the other. They are called Customhouse officers, and they act in precisely the same way as ruts and bad roads. Congratulations, negotiators, for agreeing to remove the kinks from your hoses.
Daniel J. Mitchell
After nearly five years in office, what’s President Obama’s most significant accomplishment?
This is a serious question, so no jokes about the Nobel Prize he received for not being Bush. And no partisan GOP answers about the 2010 election, either.
Put yourself in the position of a future historian and think about what you would put in a book to describe Obama’s biggest accomplishment.
Proponents of big government, by contrast, also aren’t big fans of the stimulus, though they’re dissatisfied because they think Obama should have wasted even more money.
Another potential answer is Obamacare. Libertarians and conservatives, needless to say, would say it was a significant accomplishment in the same sense that the Titanic had a significant maiden voyage.
Leftists, by contrast, obviously can’t be pleased by the way Obamacare is imploding in the short run, but they nonetheless may think that it will be worth it in the medium run because more people will be dependent on government (though they may regret their choice in the long run).
Killing Osama bin Laden is probably a good answer, but if terrorism and conflict with the Islamic world are still big issues in the future, then I suspect the achievements of Seal Team Six won’t be seen as making that much of a difference.
For what it’s worth, I think the change in public opinion may be the President’s most long-lasting and significant accomplishment. Take a look at these remarkable results just published by Gallup. A record share of the population now say that big government is the biggest threat to the nation’s future.
Wow. I’m tempted to say that this is strong evidence of the effectiveness of the Cato Institute (and there is independent data to support that position), but I feel compelled to admit that Obama also deserves a good bit of the credit.
Even more amazing, President Obama has done something that is probably beyond even the ability of Cato. He’s convinced partisan Democrats that big government is a serious threat. Look at how the numbers have dramatically changed since 2008.
What’s particularly amazing about the shift among Democrats isn’t that 56 percent now view big government as the major threat today, compared to 32 percent about five years ago. What’s shocking is that this change happened with a Democrat in the White House.
This is newsworthy because partisan Republicans and Democrats have a tendency to say things are good or bad depending on whether “their team” is in charge.
While these numbers are remarkable, I suppose it’s too early to say the growing concern about big government is the most significant accomplishment of the Obama presidency.
That being said, anxiety about big government may lead to big political changes in 2014 and 2016, and those political changes may then lead to big policy changes such as entitlement reform and tax reform.
And if that happens, then the shift in public opinion during the Obama years may turn out to be profoundly important. In other words, Obama may turn out to be another Herbert Hoover – a politician whose statist policies set the stage for dramatic changes in public policy.
And if that happens, Obama truly will deserve to be named “libertarian of the year.”
From the Seven Days publication:
In recent weeks, Vermont Chief Justice Paul Reiber has gone public with an unusually assertive critique of the war on drugs and the “tough on crime” approach that has defined criminal justice for decades.
Reiber, who holds an office in which occupants usually avoid saying anything remotely controversial, has stopped short of recommending policy or criticizing any individuals or government bodies. But in a pair of speeches and a brief interview with Seven Days, he has declared ineffective the current reliance on police and punishment, and touted the merits of treatment-based models for dealing with crime rooted in substance abuse….
In his Boston speech, Reiber highlighted reforms in Portugal, which in 2001 abolished criminal penalties for possession of all drugs, and replaced incarceration with drug treatment. Vermont’s chief justice called the results of that experiment “astonishing,” citing a study from the libertarian Cato Institute showing that Portugal experienced a large drop in drug use and a spike in the number of people seeking treatment.
Check out the Cato report on Portugal’s drug decriminalization policy here.
BERLIN—Germany’s Christian Democrats and Social Democrats have formed another “Grand Coalition.” The political center in Europe’s wealthiest and most populous state now swallows most of the ideological spectrum. However, the entire political spectrum has lurched to the left.
The Christian Democratic Union-Christian Social Union combination (sister parties which run as one) is a pale version of the Republican Party. The CDU-CSU long ago made peace with Germany’s generous welfare state.
Even less inclined to act is CDU Chancellor Angela Merkel. She pulled her party leftward in 2005 into a Grand Coalition with the Social Democratic Party, which went on to do essentially nothing.
She won a second term in 2005 but did little more to liberate German life. Her latest reelection campaign was based on keeping everything the way it was.
The CDU-CSU fell only five votes short of a majority. However, the poll was a disaster for the CDU-CSU’s coalition partner, the Free Democratic Party. Created in 1948 out of the ruins of the Third Reich, the FDP emphasized civil liberties, economic freedom, and entrepreneurship. In 2009, the Free Democrats enjoyed their best showing ever, 14.6 percent, and their support made Merkel Chancellor.
However, they proved to be less adept in governing. As the September election approached, the Free Democrats lacked any noticeable achievements.
A new political competitor, Alternative for Germany criticized the endless Euro bail-outs while backing the same market-oriented economic policies as the Free Democrats. Many FDP voters shifted allegiance.
The FDP fell just short of the five percent threshold, receiving 4.76 percent of the vote. It went from 93 Bundstag seats to none. The Free Democrats still hold some seats in regional parliaments and the European Parliament, but have no obvious path back to national power. The AFD came in just behind the FDP, with 4.7 percent, and also won no seats. However, it is well-positioned to advance, putting the FDP’s survival at risk.
The Free Democrats’ collapse left the Bundestag with a narrow left-wing majority. However, both the SPD and Greens pledged not to join forces with Die Linke, or Left party, since it was the successor to the Communists who once ruled East Germany.
Although the CDU-CSU was much stronger in the Bundestag, the Social Democrats demanded specific concessions, such as a national minimum wage, which will reduce Germany’s employment advantage over its European neighbors, limitations on temporary employment, which will cut job opportunities, expanded pension benefits, which will add to the financial burden of an aging society, higher than necessary state pension contributions, which will be looted to fund political initiatives, and urban rent controls, which will discourage apartment construction and maintenance.
The Economist magazine warned of “Die Grosse Stagnation” likely to come. Europe’s largest economy faces slow labor productivity, falling investment, and minimal reforms since the start of the Euro crisis.
It is not just the government which has moved left. During the last Grand Coalition the FDP was the largest opposition party, leaving its leader the unofficial opposition leader. In this Bundestag the largest opposition party will be Die Linke. Just behind will be the Greens, traditionally known for their environmental commitment but of late pushing leftist economic nostrums as well.
Nor does the drift stop with the left-wing parties. The Free Democrats held a special party congress in Berlin and responded to the election debacle by making Christian Lindner of North Rhine-Westphalia the new party chairman. Lindner is seen as less committed to the party’s liberal principles.
Like Americans, the German people have worked hard to prosper despite an ever-expanding regulatory welfare state. But they will find it ever more difficult to succeed as their government moves further left. Then they will come to miss having a voice for economic and social liberty in the Bundestag.
K. William Watson
As Cato’s Dan Ikenson has pointed out before, the Obama administration likes grand trade policy proposals, like the Trans-Pacific Partnership or the proposed U.S.-EU trade agreement, but isn’t putting in the political effort needed on the domestic side to secure approval of these agreements.
The president’s decision to nominate Senator Max Baucus (D-MT) to be the next U.S. ambassador to China is a perfect example of this problem. Three years into negotiations toward the Trans-Pacific Partnership agreement, the president finally decided to seek fast track trade promotion authority this fall, and Baucus has been instrumental in putting together a bipartisan bill. With Baucus being sent to China, there will be no prominent Democrats in either the House or the Senate supportive of fast track.
This development should surely not engender confidence in the ultimate success of the TPP, but there’s one counterintuitive way to help bring much-needed focus to U.S. trade policy: Stop worrying about fast track.
Fast track authority is an arrangement between the president and Congress designed to ease the passage of trade agreements. Congress agrees to hold a timely, up-or-down vote on future trade agreements. In exchange, the president agrees to adopt a series of negotiating objectives demanded by Congress.
Many trade advocates believe that fast track authority is necessary to gain Congressional approval of free trade agreements, but I have a new bulletin out today explaining how, right now, fast track will do more harm than good.
First, with the current partisan alignment in Congress, we don’t need fast track to pass the TPP. And second, the negotiating objectives Congress imposes through fast track include bad policies that could disrupt the negotiations at this late stage, and even delay completion of the agreement.
If there were a chance that Congress would use the fast track bill to make the TPP a better free trade agreement, then I would support it. But there is absolutely no indication that anyone in Congress is going to push for that. Taking up fast track now accomplishes nothing of value, but will serve as divisive political theater while ultimately reducing the quality of the TPP.
You can learn more by reading the bulletin.
At some point, I hope someone does a thorough, empirical study of the impact of NSA spying on U.S. companies. But for now, all we have is anecdotal evidence, like this:
Today Brazil’s government announced it won’t buy $4.5 billion worth of US fighter jets in a move attributed to anger over controversial US intelligence-gathering that targeted Brazilian citizens and officials, including president Dilma Rousseff.
The Brazilian government’s official statements pointed to performance and cost issues as the reason to pick Sweden’s Saab AB to develop 36 fighters, though many observers had believed Boeing had the upper hand while bidding to expand Brazil’s air force.
Calling the decision “disappointing” in a statement, Boeing says it isn’t done trying to sell to Brazil, a major client for the company’s commercial air business, noting that ”over the next several weeks, we will work with the Brazilian Air Force to better understand its decision.”
One way to understand it: “The NSA problem ruined it for the Americans,” a Brazilian government official told Reuters. Public opinion turned against the US, and Brazil is leading the charge for a United Nations resolution that would limit electronic surveillance. Edward Snowden, the former National Security Agency contractor whose leaks revealed the US surveillance, obliquely requested asylum in Brazil earlier this week, but it looks the country isn’t interested in hosting the whistleblower.Today, a White House panel charged with assessing American electronic snooping released a report urging new limits on US intelligence agencies. One of its recommendations is to more carefully assess the costs of surveilling foreign leaders like Brazil’s Rousseff. On this front, Brazil’s decision on the fighter planes is a costly object lesson for the US government.
Other than providing generous pay and fat pensions, many federal agencies are not great places to work, according to federal employees themselves on a new survey.
“The average government worker comes in 13 points below the average private-sector employee in terms of job satisfaction, according to the ‘Best Places to Work in the Federal Government’ report.
‘This is an ongoing train crash,’ said Max Stier, president of the Partnership for Public Service.
Hay Group, which collaborated on the data, found that job satisfaction in the private sector was not only higher than in the public sector, it even climbed since last year — from 70.0 to 70.7 points out of 100 — all while the government numbers fell.
Of the 10 questions that both public and private employees answered, government scored higher on only question: Do you like the kind of work you do?
On every other question, including how well colleagues cooperate and how well management keeps employees informed, private-sector workers gave their organizations higher marks.”
During the Bush years, government failures were explained away by liberal pundits as being the result of a Republican administration that (supposedly) did not believe in government. But the government-loving Obama administration has now been in office five years and federal employees are more dissatisfied than they have been in at least a decade.
Many liberal experts—such as these folks—will admit that the government bungles a lot of its activities. They usually call for reforms like more coordination, reduced overlap, and better leadership to solve the government’s mismanagement problems.
However, the government will never operate as effectively as private enterprise for many reasons. One is that government workplaces will always be buried under piles of rules and regulations that frustrate workers and stifle initiative. Another is that the government has rigid pay structures that don’t differentiate between the slackers and the hard workers. Ludwig von Mises discussed some of the fundamental differences between private enterprises and government bureaus in his book Bureaucracy seven decades ago. Little has changed since then, despite repeated efforts to “reinvent government.”
One reason why our federal government is a particularly poor performer is that it has become so large, complex, and immune to oversight. If Americans want Washington to work better, they should insist that it be downsized as much as possible. Some agencies should be abolished, such as the lowest scoring agency on the new survey, the Economic Development Administration, which is an unneeded pork barrel machine. Other agencies should be privatized, such as the low-scoring Transportation Security Administration.
Less would be more when it comes to government and its performance.