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The sharing economy’s undead capital, and its discontents

Out of the Storm News - April 15, 2014, 2:17 PM

From the American Conservative:

Last week, R Street’s Daniel Rothschild described these services as bringing to life massive stores of previously “dead capital,” allowing a tremendous democratization of commercial life. He wrote, “If the key economic trend of the nineteenth and twentieth centuries was the growth of economies of scale—factories, big firms, multinationals—we are now seeing the opposite.” The sharing economy combined with the Etsy (an online craft marketplace) economy in his eyes to represent a tremendous turn towards filling the coffers of the common person, rather than the great industrialist. Ever more easily, people can rent out their car to pay for a dinner, a room to pay for a date, a house to pay for their own vacation. In Rothschild’s eyes, corrupt cities bought off by entrenched interests risk stomping out this tremendous innovation, sending the undead capital back into the ground for good and depriving countless people of a chance to make a bit of extra money.

Renters and rent-seeking in San Francisco

Out of the Storm News - April 15, 2014, 1:36 PM

As anyone who’s lived in a major coastal American city knows, apartment renting is about as far from an unregulated free market as you can get. Legal and regulatory stipulations govern rents and rent increases, what can and cannot be included in a lease, even what constitutes a bedroom. And while the costs and benefits of most housing policies can be debated and deliberated, it’s generally well known that housing rentals are subject to extensive regulation.

But some San Francisco tenants have recently learned that, in addition to their civil responsibilities under the law, their failure to live up to some parts of the city’s housing code may trigger harsh criminal penalties as well. To wit: tenants who have been subletting out part or all of their apartments on a short-term basis, usually through web sites like Airbnb, are finding themselves being given 72 hours to vacate their (often rent-controlled) homes.

San Francisco’s housing stock is one of the most highly regulated in the country. The city uses a number of tools to preserve affordable housing and control rents, while at the same time largely prohibiting higher buildings that would bring more units online, increasing supply and lowering prices. California’s Ellis Act provides virtually the only legal and effective means of getting tenants (especially those benefiting from rent control) out of their units — but it has the perverse incentive of causing landlords to demolish otherwise useable housing stock.

Again, the efficiency and equity ramifications of these policies can be discussed; the fact that demand curves slope downward, however, is really not up for debate.

Under San Francisco’s municipal code, it may be a crime punishable by jail time to rent an apartment on a short-term basis. More importantly, it gives landlords the excuse they need to evict tenants they otherwise can’t under the city’s and state’s rigorous tenant protection laws. After all, they’re criminals!

Here’s the relevant section of the code:

Any owner who rents an apartment unit for tourist or transient use as defined in this Chapter shall be guilty of a misdemeanor. Any person convicted of a misdemeanor hereunder shall be punishable by a fine of not more than $1,000 or by imprisonment in the County Jail for a period of not more than six months, or by both. Each apartment unit rented for tourist or transient use shall constitute a separate offense.

Here lies the rub. There are certainly legitimate reasons to prohibit the short-term rental of a unit in an apartment or condo building — some people want to know who their neighbors are, and a rotating cast of people coming and going could potentially be a nuisance.

But that’s a matter for contracts and condo by-laws to sort out. If people value living in units that they can list on Airbnb or sublet to tourists when they’re on vacation, that’s a feature like a gas stove or walk-in closet that can come part-and-parcel of the rental through contractual stipulation. Similarly, if people want to live in a building where overnight guests are verboten, that’s something landlords or condo boards can adjudicate. The Coase Theorem can be a powerful tool, if the law will allow it.

The fact that, so far as I can tell, there’s no prohibition on having friends or family stay a night — or even a week — under San Francisco code, it seems that the underlying issue isn’t a legitimate concern about other tenants’ rights, but an aversion to commerce. From the perspective of my neighbor, there’s no difference between letting my friend from college crash in my spare bedroom for a week or allowing someone I’ve never laid eyes on before do the same in exchange for cash.

The peer production economy is still in its infancy, and there’s a lot that needs to be worked out. Laws like those in San Francisco — which circumvent the discovery process of markets — prevent landlords, tenants, condos, homeowners and regulators from learning from experience and experimentation — and lock in a mediocre system that threatens to put people in jail for renting out a room.

This #TaxDay, Let’s Also Look to Rid Ourselves of Global Anti-Free Trade Tariffs

Somewhat Reasonable - April 15, 2014, 12:23 PM

It’s Tax Day in America.  Which brings to mind one of the late, great Ronald Reagan’s many great lines:

“Republicans believe every day is the Fourth of July, but the Democrats believe every day is April 15.”

And of course Reagan was right.  Taxes damage individuals, families and economies every single day of the year – not just on Collection Day.

Taxes are about the government taking your coin.

U.S. State Government Tax Revenue Rises Third Year to Record

Pro-government folks view taxes like Jello – there’s always room for more.

Obama’s Budget Packed with New Spending and Tax Hikes

Taxes are also the government wanting less of the taxed activity.  Even the most virulent pro-taxers admit it – sometimes.

Raising Cigarette Taxes Reduces Smoking

So if you want less income – tax it.

Deal Means Taxes Will Rise for Most Americans

ObamaCare Increases Income Tax

If you want less investment:

Obamacare Surtax on Investment Income

If you want less employers offering health insurance:

Obamacare Excise Tax on Comprehensive Health Insurance Plans

Less tanning?

Obamacare Tax on Indoor Tanning Services

Think the Affordable Care Act (ACA) was about a whole lot more government control than just the massive health care power grab?

Less everything?

Obama has Proposed 442 Tax Hikes Since Taking Office

So if you want more global free trade – you absolutely should tax it less.

Australia Strikes Free Trade Deal with Japan, Beef and Horticultural Industries Secure Major Concessions

A hefty 38.5 per cent Japanese tariff that currently applies on frozen beef will be halved to 19.5 per cent over 18 years, with deep cuts in the first year.

Less taxes on something means more of that something?  You bet.

The chairman of the Australian beef industry’s free trade taskforce, Lachie Hart, says the deal will be worth $5.5 billion to the industry over 20 years.

And they’re thinking much, much bigger.

There are also significant advantages for other agricultural products, with fruit and vegetables, seafood, sugar and wine among the winners.

Japanese exporters will see Australian tariffs lowered on electronics, whitegoods and cars….

Australian consumers will see prices lowered as a result.

Japanese consumers too.  The less taxes the providers have to pay, the less their customers will have to pay.

Under the deal, Japanese-made cars will be, on average, $1,500 cheaper.

Exactly.

Less taxes is good – no taxes is better.

The duty-free quota for cheese – Australia’s single largest dairy export to Japan – will be boosted from 27,000 tonnes per year to 47,000 tonnes annually.

Unfortunately, not all global trade is trending quite so freely.  In fact, sometimes the tariffs are so thick and impacted, they make your teeth hurt.

Sugar Tariffs Cost Americans $3.86 Billion in 2011

This isn’t unilateral – imposed in a vacuum.  This is one of the globe’s bigger games of tit-for-tat.  We manipulate our sugar market – in ways well beyond just taxes.  So other producers do too.

(W)e have Brazil dumping money into the sugar industry in a million different directions.  India uber-subsidizing production.  China gaming the system – stockpiling product, then shifting to direct payments.  And Thailand providing multi-billion dollar price supports….

And these are just some of the myriad ways these nations – and many others – are directly and indirectly manipulating the global market.  None of this has anything to do with a free exchange of goods.

These huge barriers to the global free trade of sugar – and many, many other goods – make trade scarcer, and consumer prices much higher.

We should all instead emulate the freer trading ways of the likes of Australia and Japan.

If we want more cheap stuff – governments must tax it less.  If we want an abundance of cheap stuff – don’t tax it at all.

Categories: On the Blog

#TaxDay: What Governments Absolutely Do Not Need – More of Our Money

Somewhat Reasonable - April 15, 2014, 12:10 PM

Tuesday is April 15 – Tax Day.  The official day that represents governments’ year-round, omni-directional shearing of We the People.

Looking to get filing help from our federal fleecers is at best a crapshoot.

IRS Can’t Do The Math

IRS Help Line Has Error Rate of 30.8%

Busy Signal Awaits IRS Help Line Callers

How very ObamaCare of them.

We self-employed have to every quarter guess what we owe and send it in.

Salaried people get skinned every paycheck – “withholding” that hides governments’ multiple, monstrous bites.  And tricks people into getting excited about an annual “refund” – which is really just a return of the interest-free loan they involuntarily made to the Leviathan.

But if any of us under pay – our mistake isn’t interest-free.  Nor is it penalty-free.  For governments, it’s forgiveness for me – not for thee.

Taxes – already obscenely multitudinous and high – have grown exorbitantly upward and outward in the last five years.

Full List of Obama Tax Hikes

Even the Poorest of the Poor Pay More Taxes Under Obama’s Budget

How Obama’s Tax Hikes Would Hit the Rich and Middle Class

Full List of Obamacare Tax Hikes: Listed by Size

Is the Leviathan slaked?  Of course not.

Obama’s Budget Packed with New Spending and Tax Hikes

More of just the same ticket for a five-plus year foundering, floundering economy.

The government’s cash drain is historic.

U.S. State Government Tax Revenue Rises Third Year to Record

U.S. states took in 6.1 percent more revenue in fiscal 2013 than they did the year before for a record $846.2 billion, according to the Census Bureau.

It was the third consecutive increase, the agency said in a statement today. Revenue rose 4.7 percent from 2011 to 2012, and 7.3 percent from 2010 to 2011.

Yet we’ve added during this time $7+ TRILLION to the federal debt.  So it’s clearly a spending problem – not a revenue one.

And that’s just the federal government.  Many of the many states are also digging ever-deeper into our wallets.

The absolute last thing we should do is open another vein for these governments to drain.  Yet looming before us is the October 31, 2014 end of the Internet tax moratorium.

Since 1998, the Internet Tax Moratorium has protected everyone from the average Internet surfer to small and large businesses from multiple and discriminatory taxes on Internet usage.

This moratorium was extended in 2001 and 2004, both times with bipartisan votes in the House and Senate.

And in 2007.

Senate Passes Internet Tax Moratorium Extension: 7 More Years Tax-Free

Which brings us to now.  Thankfully, the desire to preempt this new rash of taxes is again bipartisan.

Rep. Bob Goodlatte (R-VA) and others introduced HR 3086, the “Permanent Internet Tax Freedom Act”.

Sen. Ron Wyden (D-OR) and 16 other Senators introduced S 1431, the “Internet Tax Freedom Forever Act”.…

And even better – both sides are looking to make the tax ban permanent.  Which means we won’t ever again have to play the brinksmanship games for which governments are notorious.

It’s an election year.  We the People aren’t too keen on DC’s denizens.

Congress Now Less Popular than Head Lice, Cockroaches

I guess they had to poll on cockroaches and head lice to have something proximate.

Here’s a potential Kumbayah moment.  A way for Congress to help themselves politically – and also avoid another concussive blow to a feeble economy.

Let’s get it together and get it done – now, well before November 1.

 

[Originally published at Daily Caller]

Categories: On the Blog

Legislators to consider state-wide public smoking ban, includes e-cig

Out of the Storm News - April 15, 2014, 11:51 AM

From NBC News:

Dr. Joel Nitzkin is inclined to agree. As the past co-chair for the Tobacco Control Task Force, Dr. Nitzkin brought his own findings before the California Assembly Governmental Organization Committee in August 2013 in opposition to SB 648, a similar bill that has yet to be passed in that state.

“The e-cigarette is one of a number of smoke-free tobacco/nicotine alternatives to the cigarette that can reduce the risk of tobacco-attributable illness and death by 98% or better, while satisfying the user’s urge for nicotine,” Dr. Nitzkin told the committee. “Misrepresenting e-cigarettes has the practical effect of reinforcing real tobacco cigarettes as the dominant product for nicotine consumption.”

Dr. Nitzkin went on to note the absence of pharmaceutical nicotine inhalers from the ban, questioning the true intentions of the committee in their stated claims to improve public health. He stated the exclusion of the inhalers readily dissolves the feared hazard of e-cigarette vapors. The current version of SB209 excludes similar devices from Alaska’s proposed state-wide ban.

McCutcheon Decision: Supreme Court Splits on Individual Free Speech vs. ‘Collective Voice’

Somewhat Reasonable - April 15, 2014, 10:54 AM

In its recent ruling in McCutcheon v. Federal Election Commission, the Supreme Court struck down yet another provision of federal campaign finance law as a violation of the First Amendment‘s free speech guarantee.

This time it was the Bipartisan Campaign Reform Act’s limitation on the aggregate amount of contributions — presently $123,200 — that a donor may contribute to all candidates or party committees in one election cycle.

Of course, McCutcheon follows the now-famous Citizens United ruling, in which the Court held that the BCRA provision restricting corporations and unions from making expenditures advocating the election or defeat of a candidate violates the free speech rights of those entities.

Like Citizens United, McCutcheon was another 5-4 decision. While the case was narrowly decided, the gulf between the understanding of the majority and the dissenters of the First Amendment’s meaning is wide.

Indeed, two different conceptions of the role of individual rights in our constitutional regime emerge.

In his dissent, Justice Stephen Breyer asserts that “the First Amendment advances not only the individual’s right to engage in political speech, but also the public’s interest in preserving a democratic order in which collective speech matters.”

The emphasis on “matters” is Breyer’s. But I think what matters most in his statement is the reference to “collective speech,” a term with somewhat Orwellian overtones.

Contrast Breyer’s language with this from Chief Justice John Roberts‘ majority opinion:

“The First Amendment safeguards an individual’s right to participate in the public debate through political expression and political association.”

Roberts declares the First Amendment is intended to remove governmental restraints from the arena of public discussion, “putting the decision as to what views shall be voiced largely in the hands of each of us.”

The contrast between Breyer’s emphasis on “collective speech” and Roberts’ focus on an “individual’s right” is rather stark.

And to my mind, Breyer’s formulation is disturbing. The Bill of Rights — of which the First Amendment is foremost — were added to the Constitution to protect fundamental individual liberties from abrogation by popular majorities, not to secure some notion of collective rights.

A window into Breyer’s thinking concerning “collective speech” may be gleaned from his citation toJean-Jacques Rousseau, whom the justice rightly calls “an influential 18th century continental philosopher.”

Rousseau was indeed an influential philosopher but, thankfully, not one whose thinking greatly influenced our Founders.

It is widely acknowledged that they looked for guidance foremost to John Locke and Montesquieu.

Rousseau is best known for his theory of the “general will,” elaborated in his major work, The Social Contract.

In a nutshell, Rousseau’s philosophy requires the individual to submerge his own ideas to what he calls the “general will,” which Rousseau explains this way:

“When, therefore, the opinion opposed to my own prevails, that simply shows I was mistaken, and what I considered to be the general will was not so. Had my private opinion prevailed, I should have done something other than I wished; and in that case I should not have been free.”

It is easy to see that Rousseau’s philosophy nurtures collectivist thinking — including notions of the primacy of “collective speech” — rather than an appreciation for the role of individual rights in a democratic society.

Indeed, in philosophical terms, you can draw a reasonably straight line from Rousseau to Georg Wilhelm Friedrich Hegel, then to Karl Marx.

The pronounced collectivist bent of this philosophical line, with its notions of state supremacy over the individual, differs significantly from the line running from Locke to David Hume, to James Madison and on to John Stuart Mill.

Do not get me wrong. I am not suggesting that Breyer, by relying on Rousseau for support, is a devotee of Hegel or Marx.

I am only suggesting that his conception of the First Amendment, focusing as it does on the promotion of collective speech values, necessarily disfavors protecting an individual’s right to free speech and the other individual liberties that the Bill of Rights are intended to secure.

 

[Originally published at Washington Examiner]

Categories: On the Blog

The Methane Hoax Cranks Up

Somewhat Reasonable - April 15, 2014, 10:42 AM

Having spent decades trying to convince everyone that carbon dioxide (CO2) was a “greenhouse gas” that was going to cause the Earth to heat up, the same environmental charlatans are now embarking on a campaign to do the same with methane. In the U.S. the first move was announced by the White House in late March.

The carbon dioxide hoax fell apart in the wake of a cooling cycle affecting the Earth that began around 1997 and continues to this day. Warming and cooling cycles are natural events and both are tied to the activity or lack of it of the Sun.  Humans have nothing to do with the climate other to enjoy or endure it.

Why methane? It has a lot to do with the development of hydraulic fracturing, commonly called “fracking”, and the way it unlocks natural gas, aka methane, all of which portends an America that is energy independent, along with its huge reserves of coal and oil. If, of course, the government permits this to occur.

As we know, the Obama administration does not want that. It would mean more jobs, greater prosperity, and the ability to pay down the national debt, not to mention drive down the cost of electricity, gasoline, and everything else that depends on energy.

Despite the cooling cycle that is likely to last for many more years, Steve Hamburg, chief scientist for the Environmental Defense Fund, was quoted by the Washington Post saying that “ounce for ounce, methane is 84 times as potent as a greenhouse gas over 20 years” compared to carbon dioxide. “More than a third of the warming that we’ll see as a result of today’s emissions over the next couple of decades comes from, essentially, methane. We need to remain focused on carbon dioxide emissions, but doing so is not enough.”

Excuse me, but the Environmental Defense Fund and countless other Green advocacy groups have been focused on carbon dioxide for decades and the Earth is cooling, not warming. What part of this does Hamburg not understand?

James M. Taylor, the managing editor of Environment & Climate News, a national monthly published by The Heartland Institute, reported in January that “Natural gas fracking is not causing a spike in the U.S. methane emissions”, citing Environmental Protection Agency data. “Methane emissions specific to natural gas are in a long-term decline, down ten percent since 1990 and down seven percent since 2007 when the fracking boom began.”

The Washington Post, however, asserted that emission levels “are set to rise by 2030 as shale oil and shale gas production expands in the United States.” Do you remember all those predictions about the increase of carbon dioxide emissions and how, in ten, twenty, fifty or a hundred years, the Earth would heat up?

This is not about methane, it is about finding a way to shut down fracking and the extraction of natural gas and oil in the same way the Obama administration’s “war on coal” has caused the loss of over 150 coal-fired plants that until it began, were providing electricity. Reducing sources of electricity drives up its cost to everyone. As more natural gas came on line by 2013 it had become the second greatest source of U.S. electricity, but overall the amount of electricity produced was less than in 2007 before the war on coal began.

A natural component of the Earth, it has a number of sources, but one that has also caught the eye of government regulators involves cow flatulence and belching.

The White House has proposed cutting methane emissions from the dairy industry by 25% by 2020. The Environmental Protection Agency has been tracking cow farts since 2012 and now the dairy industry has to worry along with the oil and gas industry. In addition to the EPA, the Bureau of Land Management will be announcing “new standards this fall to reduce venting and flaring from oil and gas production on public lands.”

It’s often best just to let the Greens speak for themselves, revealing their never-ending efforts to attack the energy industry that keeps our lights on, heats and cools our homes, and fuels our cars and trucks. “President Obama’s plan to reduce climate-disrupting methane pollution is an important step in reining in an out of control industry exempt from too many public health protections,” said Deborah Nardone, the director of the Sierra Club’s Keeping Dirty Fuels in the Ground campaign.

“However,” said Ms. Nardone, “even with the most rigorous methane controls in place, we will still fall short of what is needed to fight climate disruption if we do not reduce our reliance on these dirty fossil fuels.”

What the heck is a climate disruption? A blizzard, a hurricane, a flood, tornadoes? None of these phenomena have anything to do with using fossil fuels. This is the kind of utter drivel we have all been hearing for decades.

It has nothing to do with the climate and everything to do with denying access and use of the greatest reserves of coal, oil and natural gas that exist in the greatest nation on Earth, the United States of America.

[Originally published at Warning Signs]
Categories: On the Blog

R Street’s Lehmann on terrorism insurance

Out of the Storm News - April 15, 2014, 10:36 AM

R Street Co-Founder, Editor-in-Chief and Senior Fellow R.J. Lehmann participated in a panel organized by National Journal magazine and hosted at Chicago’s Soldier Field by Zurich North America on whether, and how, Congress should reauthorize the Terrorism Risk Insurance Act. Lehmann argued that — while some form of backstop may be necessary, particularly for workers’ compensation insurance — Congress should adjust the program’s trigger levels, industry deductible and recoupment mechanism to reflect that more capacity has entered the terrorism insurance market. He also questioned whether a backstop for commercial liability insurance is wise public policy, given that, by definition, it amounts to subsidizing behavior that a court has found reckless.

Lehmann was joined on the panel (which was moderated by Steve Clemons, editor-at-large of National Journal and The Atlantic) by Anne Gron, vice president of NERA Economic Consulting; Kyle Logue, professor at the University of Michigan Law School; Wisconsin Insurance Commissioner Ted Nickel; Kristin N. Pate, associate general counsel of General Growth Property Inc.; and Leigh Ann Pusey, president and CEO of the American Insurance Association. Below you can watch video of the discussion, along with a keynote speech by Rep. Randy Hultgren, R-Ill.

TRIA Triage Policy Summit from National Journal on FORA.tv

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Checkout Lanes with No Checkers: Another Result of Minimum Wage

Somewhat Reasonable - April 15, 2014, 9:37 AM

So my wife and I are out running errands, and we stop at a big grocery store. As we go through checkout, I see probably the biggest argument against raising the minimum wage I can think of: no cashier.

I look up and down the checkout lanes. Most are self-checkout and bag-your-own. It gets me thinking. When I was a kid, self-serve gasoline was unheard of. You pulled up at a gas pump, rolled over a hose that would “ding-ding” for an attendant, and out would come someone to pump the gas for you, clean your car’s windows, and offer to check your car’s oil level. Today, gas station attendants are almost extinct. It’s almost all self-serve gas now. Also gone are our local movie theater ushers, and our bowling alley pin setters. I’m not old enough to remember elevator operators, but I’ve seen them in old movies. They’re gone too.

Employers are always looking for ways to cut costs. Elevator operators, pin-setters, movie theater ushers, and gas station attendants have all been priced out of existence. Based on what I saw at the grocery store, checkout lane cashiers are being priced out too.

Force employers to pay people so much that they produce less than it costs to hire them, and before long, in comes automation and out go jobs.

The costs of hiring someone go well beyond wages. There’s also unemployment insurance (required), workers compensation insurance (required), Social Security/Medicare tax (required), liability insurance to cover actions of employees (a virtual necessity), and other benefits an employer might offer such as paid sick days (usually optional).

The February unemployment figures recently came out. The national average rate is up a bit to 6.7 percent. But for young people, who have the least education and work experience and therefore are the least-productive workers, the official rate is a Depression-level 11.4 percent—and it’s 15.8 percent if we include the nearly two million persons ages 18 to 29 who are not counted as unemployed because they’re so frustrated they’ve given up looking for work.

It’s even worse for young people who are minorities. Among young blacks the official unemployment rate is 19.3 percent (23.8 percent if we include those who’ve given up looking). Among young Hispanics it’s 12.5 percent (16.6 percent if we include those who’ve given up looking.)

President Obama is agitating for a $10.10 an hour minimum wage, up from the $7.25 an hour federal minimum. Doing this would make it even more expensive to hire people with poor educations, few skills, and little or no work experience. There’d be a bigger gap between what these people produce for an employer and what they would receive in wages and benefits. They won’t get jobs; it’s as simple as that.

The recent Congressional Budget Office report says a higher minimum wage would likely put hundreds of thousands of entry-level people out of work. Those in minimum-wage jobs who manage to stay employed would receive higher pay, but as the example of the cashier-less checkout lanes shows, their employers would surely start looking for ways to eliminate their jobs.

Two more points:

First, throughout the minimum-wage debate we speak as if persons with minimum-wage jobs will always have these low-paying jobs. In fact, however, these are usually first jobs, second jobs, or jobs to tide people over until they can find higher-paying work. In other words, they’re temporary or transient. There is not a permanent group of minimum-wage workers.

Second, what’s magic about $10.10 an hour? If an employer offers $10 an hour, should the government force people to remain unemployed over one thin dime? The White House is crawling with unpaid interns—unpaid. They work for no pay … but not for nothing. The unpaid interns have decided it’s worth receiving no pay to have the experience, the connections they expect to make, the resumé they’ll be able to flaunt. There are many jobs where experience, connections, and impressive resumes might be worth low pay or even no pay.

It’s our lives. We should be able to work for whomever we want for whatever pay and benefits we agree to take.

Categories: On the Blog

Expert FAQ: How will depopulating Citizens Insurance affect Florida?

Out of the Storm News - April 15, 2014, 9:23 AM

From NerdWallet:

According to the R Street Institute’s Florida director, Christian Cámara, “If the claims arising from a storm (or series of storms) taps all of Citizens resources, the remaining claims would be borne by Floridians through costly assessments (“hurricane taxes”) on virtually every type of policy – including homeowner’s, renter’s, business, and even automobile insurance. This would have a ripple effect on the economy for years to come.”

Floridian policyholders are still subject to surcharges for damage in the 2004-2005 hurricane season.

Depopulating Citizens changes the financial landscape for the state and individual Floridians. As Cámara notes, “Claims from policies in private companies would be paid for by private capital rather than public debt.”

 

NEJM Fails to Correct Data on Children’s E-Cigarette Use

Somewhat Reasonable - April 15, 2014, 9:16 AM
The New England Journal of Medicine and authors of a commentary on e-cigarette use have ignored our call for correction of a substantial error regarding e-cigarette use among American schoolchildren in 2011 and 2012.  Authors Amy L. Fairchild, Ronald Bayer and James Colgrove of Columbia University double-counted some users in a figure they used to illustrate data from the National Youth Tobacco Survey (NYTS).

The commentary, published December 18, addressed the legitimate question, What is the appropriate public health goal: eradication of smoking or elimination of all tobacco products?

Clive Bates first raised the critical data error in a group email discussion; I responded because I had used the figure’s source data for blog posts earlier in December.

Clive and I, along with my University of Louisville colleague Nantaporn Plurphanswat, submitted a letter to the NEJM editor on December 22.  We explained, “the [Fairchild] figure inaccurately represents data from the National Youth Tobacco Survey on use of cigarettes and e-cigarettes by U.S. students in 2011 and 2012 in a report from the Centers for Disease Control and Prevention (2). For example, the figure shows that 16.8% of high school students used either product in 2012. However, the correct percentage is 14.6% because of dual use, which was reported in another CDC publication (3). We submit a revised figure that accurately represents the information in both CDC reports.” 

On February 19 Editor Debra Malina informed us that our letter and corrected figure would not be published.

We subsequently sent an email request to Dr. Fairchild.  We advised that her figure was constructed incorrectly, noting, “it does not properly account for e-cigarette users who also smoke, and these are the majority.  Given this misconstruction, the chart should not be reproduced in its current form.  We have taken this up with the NEJM, but they do not wish to publish an alternative from us.  That being the case, the responsibility for amending the chart rests with you as lead author.   We urge you to submit a revised figure along the lines we included in our communication with the editor.  We attach our letter and revised chart and would be happy to discuss the underlying data (also available in the referenced CDC publications) that we used to create it.” Dr. Fairchild ignored that missive, and a March 3 follow-up email.

The NYTS survey has been subject to repeated and egregious abuse by anti-tobacco forces, all to serve the specious claim that e-cigarettes are a gateway to cigarette smoking.

Tom Frieden, director of the Centers for Disease Control and Prevention, Dr. Tim McAfee, director of the CDC Office of Smoking and Health, and FDA Tobacco Center director Mitch Zeller started the gateway fallacy with reports and press releases, a tactic that I labeled “irresponsible theatrics”.  I also detailed how the CDC abused the data (here and here).

The inaccurate information in the NEJM is a dangerous error that can undeservedly gain traction through repetition.  This happened in 1981, when National Cancer Institute epidemiologist Dr. Deborah Winn misstated oral cancer risks related to smokeless tobacco.  Her erroneous data became gospel for anti-tobacco forces, despite her subsequent acknowledgement of the misstatement.

The NEJM is doing public health and science a disservice by refusing to correct the error.

[Originally published at Tobacco Truth]
Categories: On the Blog

How to fairly tax families

Out of the Storm News - April 15, 2014, 8:42 AM

From The American:

In his 2015 budget proposal, President Obama called for expanding the Earned Income Tax Credit (EITC) for workers without children. Currently, that program heavily favors parents relative to nonparents. It also gives rise to large marriage penalties, which some observers have proposed eliminating on the grounds that marriage should not be punished. Another proposal to change the way we tax families came, last fall, from Senator Mike Lee of Utah, who unveiled a tax reform plan that would dramatically reduce taxes on parents relative to nonparents. Defending this underlying principle, Reihan Salam has argued, “By shifting the tax burden from parents to nonparents, we will help give America’s children a better start in life, and we will help correct a simple injustice” stemming from the fact that we all benefit from the work parents do in raising the next generation.

Happy Tax Day!

Out of the Storm News - April 15, 2014, 8:31 AM

From the Washington Post:

SALAM: How poor are America’s poor? “(a) It is useful to think about absolute household incomes as well as household incomes in relative terms; (b) the quality of public services matters a lot, and Sweden, a country where (for example) the market for education services is much freer than it is in the U.S. seems to do a pretty good job of offering high-quality public services; and (c) it turns out that universal coverage does not mean that households no longer face financial difficulties when it comes to securing medical care, as we see in countries like Germany and France with relatively well-regarded health systems. Many Americans romanticize European social models, and this in turn leads them to embrace public policy solutions that aren’t a good fit for the particular challenges and demands that obtain in the U.S.” Reihan Salam in National Review.

Was Stopping Nevada’s Fracking Rush Behind the Bundy Showdown?

Somewhat Reasonable - April 14, 2014, 3:38 PM

The story of rancher Cliven Bundy has captured an abundance of media attention and attracted supporters from across the West, who relate to the struggle against the federal management of lands. Bundy’s sister, Susan, was asked: “Who’s behind the uproar?” She blamed the Sierra Club, then Senator Harry Reid (D-NV), and then President Obama. She concluded her comments with: “It’s all about control”—a sentiment that is frequently expressed regarding actions taken in response to some endangered-species claim.

An Associated Press report describes Bundy’s battle this way: “The current showdown pits rancher Cliven Bundy’s claims of ancestral rights to graze his cows on open range against federal claims that the cattle are trespassing on arid and fragile habitat of the endangered desert tortoise.”

Bundy’s story has been percolating for decades—leaving people to question why now. The pundits are, perhaps, missing the real motive. To discover it, you have to dig deep under the surface of the story, below the surface of the earth. I posit: it is all about oil and gas.

On April 10, the Natural News Network posted this: “BLM fracking racket exposed! Armed siege and cattle theft from Bundy ranch really about fracking leases.” It states: “a Natural News investigation has found that BLM is actually in the business of raking in millions of dollars by leasing Nevada lands to energy companies that engage in fracking operations.”

This set off alarms in my head; it didn’t add up. I know that oil-and-gas development and ranching can happily coexist. Caren Cowan, executive director of the New Mexico Cattle Growers Association, told me: “The ranching and oil-and-gas communities are the backbone of America. They are the folks who allow the rest of the nation to pursue their hearts’ desire secure in the knowledge that they will have food and energy available in abundant supply. These natural resource users have worked arm-in-arm for nearly a century on the same land. They are constantly developing and employing technologies for ever better outcomes.”

The Bureau of Land Management (BLM) wouldn’t be enduring the humiliating press it has received, as a result of kicking Bundy off of land his family has ranched for generations and taking away his prior usage rights, just to open up the land for oil-and-gas—the two can both be there.

The Natural News “investigation” includes a map from the Nevada Bureau of Mines and Geology that shows “significant exploratory drilling being conducted in precisely the same area where the Bundy family has been running cattle since the 1870s.” It continues: “What’s also clear is that oil has been found in nearby areas.”

Nevada is not a top-of-mind state when one thinks about oil and gas. Alan Coyner, administrator for the Nevada Division of Minerals, describes his state: “We are not a major oil-producing state. We’re not the Saudi Arabia of the U.S. like we are for gold and geothermal production.” The Las Vegas Review Journal reports: “When it comes to oil, Nevada is largely undiscovered country…. fewer than 1,000 wells have been drilled in the state, and only about 70 are now in production, churning out modest amounts of low-grade petroleum generally used for tar or asphalt. Since an all-time high of 4 million barrels in 1990, oil production in Nevada has plummeted to fewer than 400,000 barrels a year. More oil is pumped from the ground in one day in North Dakota—where the fracking boom has added more than 2,000 new wells in recent years—than Nevada produced in 2012.”

But, Nevada could soon join the ranks of the states that are experiencing an economic boom and job creation due to oil-and-gas development. And, that has got to have the environmental groups, which are hell-bent on stopping it, in panic mode. Until now, their efforts in Nevada have been focused on blocking big solar development.

A year ago, the BLM held an oil-and-gas lease sale in Reno. At the sale, 29 federal land leases, totaling about 56 square miles, were auctioned off, bringing in $1.27 million. One of the winning bidders is Houston-based Noble Energy, which plans to drill as many as 20 exploratory wells and could start drilling by the end of the year. Commenting on its acreage, Susan Cunningham, Noble senior vice president, said: “We’re thrilled with the possibilities of this under-explored petroleum system.”

The parcels made available in April 2013 will be developed using hydraulic fracturing, about which Coyner quipped: “If the Silver State’s first big shale play pays off, it could touch off a fracking rush in Nevada.” Despite the fact that fracking has been done safely and successfully for more than 65 years in America, the Center for Biological Diversity’s (CBD) Nevada-based senior scientist, Ron Mrowka, told the Las Vegas Review Journal: “Fracking is not a good thing. We don’t feel there is a safe way to do it.”

The BLM made the leases available after someone, or some company, nominated the parcels, and the process to get them ready for auction can easily take a year or longer. One year before the April 2013, sale, CBD filed a “60-day notice of intent to sue” the BLM for its failure to protect the desert tortoise in the Gold Butte area—where Bundy cattle have grazed for more than a century.

Because agencies like the BLM are often staffed by environmental sympathizers, it is possible that CBD was alerted to the pending potential oil-and-gas boom when the April 2013 parcels were nominated—triggering the notice of intent to sue in an attempt to lock up as much land as possible before the “fracking rush” could begin.

A March 25, 2014 CBD press release—which reportedly served as the impetus for the current showdown—states: “Tortoises suffer while BLM allows trespass cattle to eat for free in Nevada desert.” It points out that the Clark County Multiple Species Habitat Conservation Plan purchased and then retired grazing leases to protect the endangered tortoise.

Once Bundy’s cattle are kicked off the land to protect the tortoise, the precedent will be set to use the tortoise to block any oil-and-gas development in the area—after all environmentalists hate cattle only slightly less than they hate oil and gas. Admittedly, the April 13 leases are not in the same area as Bundy’s cattle, however, Gold Butte does have some oil-and-gas exploration that CBD’s actions could nip in the bud. Intellihub reports: “The BLM claims that they are seizing land to preserve it, for environmental protection. However, it is obvious that environmental protection is not their goal if they are selling large areas of land to fracking companies. Although the land that was sold last year is 300 and some miles away from the Bundy ranch, the aggressive tactics that have been used by federal agents in this situation are raising the suspicion that this is another BLM land grab that is destined for a private auction.”

The Natural News Network also sees that the tortoise is being used as a scapegoat: “Anyone who thinks this siege is about reptiles is kidding themselves.” It adds: “‘Endangered tortoises’ is merely the government cover story for confiscating land to turn it over to fracking companies for millions of dollars in energy leases.” The Network sees that it isn’t really about the critters; after all, hundreds of desert tortoises are being euthanized in Nevada.

Though the Intellihub and Natural News Network point to the “current showdown” as being about allowing oil-and-gas development, I believe that removing the cattle is really a Trojan horse. The tortoise protection will be used to block any more leasing.

On April 5, 2014, CBD sent out a triumphant press release announcing that the “long-awaited” roundup of cattle had begun.

What I am presenting is only a theory; I am just connecting some dots. But over-and-over, an endangered or threated species or habitat is used to block all kinds of economic development. A few weeks ago, I wrote about the lesser prairie chicken and the huge effort ($26 million) a variety of industries cooperatively engaged in to keep its habitat from being listed as threatened. The effort failed and the chicken’s habitat was listed. In my column on the topic, I predicted that these listings were likely to trigger another sage brush rebellion that will challenge federal land ownership. The Bundy showdown has brought the controversy front and center.

For now, southern Nevada’s last rancher has won the week-long standoff that has been likened to Tiananmen Square. Reports state that “the BLM said it did so because it feared for the safety of employees and members of the public,” not because it has changed its position.

While this chapter may be closing, it may have opened the next chapter in the sage brush rebellion. The Bundy standoff has pointed out the overreach of federal agencies and the use of threatened or endangered species to block economic activity.

Categories: On the Blog

Responding to Coppage and Gobry on the sharing economy

Out of the Storm News - April 14, 2014, 1:29 PM

This morning in the American Conservative, Jonathan Coppage writes about “The Sharing Economy’s Undead Capital, and Its Discontents,” commenting on my essay in The Ümlaut last week, as well as Pascal-Emmanuel Gobry’s excellent Forbes post on the possible distributional effects of the sharing economy.

To a large degree, the discussion about the “sharing economy” has been marred by imprecise terminology — most notably, the term “sharing economy” itself. As Coppage points out, this term has more to do with the political leanings of many of the early movers in the industry than it does with accurately characterizing the economic phenomena we are seeing. Sharing, of course, implies the non-remunerative joint use of resources, based on certain norms of reciprocity within a highly personal economy. That’s all fine and well, but it’s inimical to the idea of the larger, extended order which is an absolutely necessary feature of economic growth. Perhaps that was the sharing economy founders’ point.

I’ve been using the term “peer production economy” in lieu of “sharing economy” for a couple of reasons. First, I think it’s a less normative way to describe and categorize what we are seeing — which, though it may dismay the sharing economy vanguard, has very little to do with sharing and a re-establishment of exchange based on personal or tribal relationships. (This should be self-evident: an economy based on “gifts” and “sharing” is one that does not need smartphone apps to connect heretofore-unknown buyers and sellers, or “recipients” and “givers.”) Second, the term “peer production” highlights the larger and, to me, more interesting trend: a technology-enabled movement from big firms, big bureaucracy and big capital to connecting individual buyers and sellers. In other words, it’s a deepening of markets and the number and type of transactions that may occur within them.

PEG’s post on the distributional effects of the peer production economy is a very useful and well-grounded exercise in thinking through what an Uberfied economy might look like distributionally. I’d like to offer a couple of critiques.

For one, PEG’s UberForBabysitters actually seems to highlight the limits of the peer production economy rather than illustrate the likely next steps. Babysitting markets are one area where the personal economy seems to trump the impersonal economy, and even were such a service to be introduced, it’s hard to see how it would generate robust network effects. It seems  unlikely that many parents would actually want more than a handful of babysitters to choose from (as Gobry says); here, personal knowledge of the people we are entrusting with our sprogs is a feature not a bug. That market, and many others like it, largely remains thin and personal, and that’s just fine. (Though DogVacay is, at least on the margin, a refutation of my hypothesis.)

So it seems unlikely that the full Uberization of the economy is nigh, at least for services where there is value in buyers and sellers having at least a limited personal relationship. Even Hayek argued that an extended order doesn’t preclude personal exchange, altruism and solidarity; rather, the two can be mutually supportive.

The bigger point that I think PEG misses is that an Uberized economy isn’t just about more capital and labor — it’s about who owns the capital. For better or worse, labor in our economy today has long been commoditized. This has been the progressive dream for the last century: turning people into interchangeable parts within bureaucracies that sought to efficiently administer either capital (big business) or power (big government). The civil service system, labor unions and human resources departments were all agents in this effort. Simultaneously, capital allocation has become increasingly efficient (another word for this is “ruthless”).

The peer production economy brings individually owned capital back into the equation, and this capital is tied to the labor of its owners. In the medieval guild system and the proto-industrialized workshop system, workers owned their tools and work spaces; industrialization turned laborers into mere factors of production where skill was the only determinant of value. (This radical shift in economic life not only significantly changed conceptions of class but eventually spawned an entire counter-movement.)

With firms like Uber, Lyft, Sidecar, Airbnb, Etsy, and RelayRides, sellers are putting their capital back into play — and these sellers, not the owners of the firms running the marketplaces — will bear the benefits of the returns to capital.

In other words, Gobry is wrong to assume that the owners of the firms of the peer production economy will take an outsize portion of the growth of this section of the economy, because by and large, they don’t own the capital; rather, they own the marketplace. Lyft is the New York Stock Exchange of the car-sharing movement — it’s not the General Electric.

One final note: Whatever the distributional impacts and the effects on community of the peer production economy — and it’s important to think about them and their larger effects, and kudos to Gobry for raising the subject — it’s important to not lose sight of what’s really at stake. In many of these areas, there’s a battle going on against captured regulators protecting entrenched interests that are do little either for market efficiency or for communitarian values. The status quo is neither efficient, nor is it conducive to building community.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
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