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The Policy and Commentary Blog of The Heartland Institute
Updated: 40 min 49 sec ago

Wisconsin Politician Claims that Republicans are “Raping” Milwaukee Schoolchildren

2 hours 29 min ago

Lena Taylor

State legislatures across the country are currently deciding their state budgets. Education spending is a topic that gathers the most emotion anywhere.

Tempers flared last Tuesday at the Wisconsin State Capitol in Madison. Members of the Joint Committee on Finance considered the biennial budget for K 12 education. The Republican-controlled committee approved the budget package by a vote of 12 to 4. The package includes $200 million of funding to school districts. Governor Scott Walker (R) originally proposed $127 million in funding cuts for the 2015-16 fiscal year. Additional items approved in the package were ending the enrollment cap for the statewide school choice program, requiring high school students pass a civics test, and giving the Milwaukee County Executive authority to take over failing public schools in the City of Milwaukee.

Milwaukee, WI state Senator Lena Taylor’s (D) remarks gained the most attention during the hearing. She accused GOP legislators of “raping” the children of the Milwaukee Public Schools. “For years, individuals who sit on this committee and in this building have known they have been raping the children of MPS,” said Taylor.

Brookfield, WI state Representative Dale Kooyenga (R) was offended by the senator’s remarks. 

“I just find that sick, just absolutely sick,” said Kooyenga.

Senator Taylor doubled down on her remarks despite criticism from Representative Kooyenga. “I get it that the word rape sounds offensive, but when you consider the fact that 15 out of 100 kids can read on grade level, when $89 million have been skimmed from the education of kids, and you don’t invest it in the crisis areas, who are you fooling?”

“We have already proven that more money isn’t the answer to fix Milwaukee’s worst-performing schools. Instead, we need real reforms that put kids’ educations ahead of special interest groups – the kind of reforms that Rep. Kooyenga is proposing,” said Jonathan Steitz, budget and tax policy advisor at The Heartland Institute. Steitz, a Wisconsin resident, campaigned on the issue of school choice during his 2014 campaign for the state Senate.

Heather Kays, managing editor of School Reform News, said: “Time and time again, evidence and reality has shown money alone will not fix the public education system. Larger, systemic changes are necessary in order to address the many problems facing public schools today. An unwillingness to have an honest conversation about education policy can lead to these types of theatrics as some legislators desperately grasp at straws to justify continuing to do the same thing repeatedly, which is simply not working.”

Walker has until July 1st to sign the biennial budget into law

Categories: On the Blog

Another Domino Falls in the Anti-Fossil Fuel Movement’s Crusade

5 hours 9 min ago

Throughout the United States, especially in communities with existing or potential oil-and-gas development, outside groups have moved in with a vengeance and agitated the population—resulting in bans against all exploration for hydrocarbons and/or the use of hydraulic fracturing. Expensive lawsuits have been filed and courts have repeatedly declared such bans as “unconstitutional.” The newest domino to fall is in Texas where Governor Greg Abbott, on May 18, signed House Bill 40 (HB40)—also known as the Denton Fracking Bill—which clarifies that an “oil and gas operation is subject to the exclusive jurisdiction of the state.”

As was the case in Mora County, New Mexico, the Pennsylvania-based Community Environmental Legal Defense Fund participated in pushing Denton, Texas’ fracking ban—passed in November by 59 percent of the voters. In Mora County, a federal judge declared its drilling ban “unconstitutional.” Courts have handed down similar decisions against attempts to ban fracking in Colorado and Ohio. But the Texas legislature didn’t wait for the courts to decide in the challenges to the Denton ban.

Lawmakers introduced a total of 11 bills aimed at confirming that regulating oil-and-gas activity is the province of the Texas Commission of Environmental Quality and the Texas Railroad Commission. HB40 emerged as the final word—making Texas the first state to pass specific legislation limiting, not eliminating, local control. The Oklahoma legislature has passed a similar bill and Governor Mary Fallin is expected to sign it. In New Mexico, the House passed a pre-emption bill, but it was never brought up for a vote in the Senate.

The Texas law allows communities to impose commercially reasonable ordinances that regulate above ground oil-and-gas activity such as traffic noise, lights, and setbacks—but do not “effectively” prohibit resource extraction. In response to the new law, Ed Longanecker, President of the Texas Independent Producers and Royalty Owners Association said: “This is a balanced approach that protects the ability of municipalities to reasonably regulate surface activity related to oil and gas development, while offering the regulatory certainty necessary for our industry operations.”

HB40 was crafted with input from the Texas Municipal League—which, the Texas Tribune reports, “counts 1145 Texas cities among its members.” The Texas Municipal League was “initially among the bill’s fiercest critics,” but its involvement “added language listing areas cities could still regulate” and other changes that “the Municipal League found more palatable.”

David Holt, president of the Consumer Energy Alliance, which actively campaigned against the ban, believes “This bill struck the right approach. While local government should have some control over growth, energy development is a statewide issue. Tax revenues go to the entire state. The state agencies have been regulating production for almost 100 years. An open robust discussion on the proper balance seems to be leading to good results in most local areas. Once folks have all the facts they can and do make good decisions. But those who simply say no energy production anytime or anywhere are doing a disservice to their neighbors and the nation.”

Denton, Texas, sits on top of one of Texas’ biggest natural gas reserves: the rich Barnett Shale— producing $1 billion in mineral wealth,according to the Associated Press, and pumping more than $30 million into city bank accounts. The Texas Tribune reports: “In some cases, neighborhoods are expanding closer to longtime drilling sites.”

The idea of fracking, like the Keystone pipeline, is less of a problem itself than what it represents: more fossil fuels.

In Texas, thanks to fracking, according to the Wall Street Journal (WSJ), oil production has tripled in the past five years. The increase benefits Texas by providing the state with almost $6 billion worth of revenue in fiscal year 2014 through severance taxes. But it is not just fracking—which has been done safely and successfully for the past 65 years—that has created the new American energy abundance. It is fracking combined with horizontal drilling. But horizontal drilling doesn’t sound bad and fracking does. Plus, the general population doesn’t know what fracking, short for hydraulic fracturing, really is—making it easy to use fear, uncertainty, and doubt to scare the public.

In a 2013 report called Fracking by the Numbers, a group called Environment America redefines fracking. In a box on page 6, it states: “In this report, when we refer to the impacts of ‘fracking,’ we include impacts resulting from all of the activities needed to bring a shale gas or oil well into production using high-volume hydraulic fracturing (fracturing operations that use at least 100,000 gallons of water), to operate that well, and to deliver the gas or oil produced from that well to market. The oil and gas industry often uses a more restrictive definition of ‘fracking’ that includes only the actual moment in the extraction process when rock is fractured—a definition that obscures the broad changes to environmental, health and community conditions that result from the use of fracking in oil and gas extraction.”

This inaccurate definition allows for the recent spate of minor tremors to be blamed on “fracking,” when, in fact, if they are the result of oil-and-gas activity, they are reportedly caused by injection wells—which “inject” water that comes up as part of the drilling process, into wells miles below the surface. Injection wells, which may be far from the drilling site, can be used whether or not the well is stimulated using hydraulic fracturing. The U.S. Geological Survey study states: “Hydraulic fracturing, commonly known as ‘fracking,’ does not appear to be linked to the increased rate of magnitude 3 and larger earthquakes.” Yet, anti-fossil fuel groups continue to scare the public with suchclaims.

Ed Ireland, Executive Director of Barnett Shale Energy Education Council, told me his organization sent out five different mailings to 36,000 households to counter the misinformation spread by drilling opponents.

Supporters of the ban try to claim that it is not a drilling ban, just a fracking ban. However, since the natural resource underneath Denton is shale gas—meaning natural gas is trapped in tight little pockets within the rock—the shale must be fractured to allow the gas to flow out. Conventional drilling methods don’t work with shale. A ban on fracking is a ban on drilling.

While the Legislature has acted and the Governor has signed HB40, with it apt to be a pilot for the national issue and a template moving forward, we likely haven’t heard the last of municipal fracking bans—despite courts repeatedly shooting them down.

Earthjustice attorney Deborah Goldberg, in a CommonDreams.org story on the Texas legislation, says the people of Denton are not ready to give up yet: “We have been proud to represent the proponents of Denton’s ban and we know they will regroup and fight back against this legislative over-reach.”

Ireland says he won’t be surprised if drilling opponents engage in protests of some sorts because they have strongly suggested that they will.

One day after HB40 was signed, Colorado-based Vantage Energy announced: “that they were preparing for ‘frac work’ starting May 27.” According to the Denton Record-Chronicle (DRC), “neighbors reported seeing production equipment being moved to the company’s well site.”

In response, Adam Briggle, president of Frack Free Denton, which campaigned for the ban, told the DRC, he expects Denton residents to continue to fight. In a statement, Briggle said: “We cannot say how this story will unfold, but we do know this dark chapter shall not be the last one written.” The DRC reports, in an interview regarding Vantage’s planned drilling, that Briggle added he: “couldn’t confirm whether people would stage protests at the site. But it wouldn’t be a stretch to imagine it.”

Perhaps it is a good thing, for now, that lower oil prices are providing what WSJ calls “a natural cooling off period.”

When Oklahoma Governor Mary Fallin signs its “preemption” bill into law, it will be the next domino to fall.

Categories: On the Blog

Heartland Daily Podcast – Lindsay Leveen: Bloom Energy Cronyism

5 hours 35 min ago

In today’s edition of The Heartland Daily Podcast, Managing Editor of Environment & Climate News H. Sterling Burnett speaks with Lindsay Leveen. Leveen runs a groundbreaking, award-winning, news blog called Green Explored. Burnett and Leveen discuss Bloom Energy.

Among the issues he has examined is the shady, crony capitalist dealing of Bloom Energy, and company that has received more than a billion dollars in federal and state government subsidies, to produce energy that is four times more expensive than competing energy sources, while producing more pollution than those sources. In addition, Bloom generates and transports hazardous waste without federal or state permits.

[Subscribe to the Heartland Daily Podcast for free at this link.]

Categories: On the Blog

California in 2060?

7 hours 5 min ago

The California Department of Finance (DOF) has issued population projections for the state’s counties to 2060.  Forecasts are provided for every decade, from a 2010 base. The DOF projects that the the state will grow from 37.3 million residents in 2010 to 51.7 million in 2060. This is a 0.7 percent annual growth rate over the next 50 years. By contrast, California’s growth rate was 1.7 percent annually over the last 50 years (1960-2010), and a much higher 3.0 percent in the growth heyday of 1940 to 1990. However, even with this slower rate, California is expected to grow slightly more quickly than the nation (0.6 percent annually).

The current projections are considerably more conservative than those made by DOF less than a decade ago. In 2007, DOF forecast that California would have 60 million residents in 2050. The current population project for 2050 is substantially smaller, at 49.8 million.

Metropolitan Complexes

To understand where this growth is projected to take place — and not — we look at CSA’s (consolidated statistical areas).  CSA’s are economically connected, adjacent metropolitan areas. CSA’s require a 15 percent employment interchange between the metropolitan areas. Metropolitan areas themselves are defined by a 25 percent commuting interchange between outlying counties and central counties, each of which must have at least one-half of its population in the core urban area.

As Michael Barone pointed out in his analysis of the 2014 population estimates, sometimes it is not obvious when one metropolitan area changes into another, as in the cases of San Francisco/San Jose and Los Angeles/Riverside-San Bernardino, which are CSA’s. Another example is New York and the southwestern Connecticut suburbs in Fairfield and New Haven counties. This is because there is no break in the continuous urbanization.

Metropolitan Complexes in 2060

If the DOF has it right, in a half century, California will be home to eight major metropolitan complexes. which I am defining as combined statistical areas (CSA’s) or  “stand alone” metropolitan areas with more than 1,000,000 population (Figure 1).

The Los Angeles metropolitan complex (Los Angeles-Riverside, including Los Angeles, Orange, Riverside, San Bernardino and Ventura counties) would remain by far the largest, growing from 17.9 million to 22.8 million. One-third of the growth would be in Los Angeles County, and two-thirds outside. Riverside and San Bernardino counties would receive most of the growth (53 percent). Riverside County would grow the fastest, adding 68 percent to its population (Figure 2). Overall, the Los Angeles metropolitan complex would grow 27.3 percent, well below the projected state rate of 38.4 percent. This is quite a turnaround for a metropolitan complex that was once among the fastest growing in human history.

The San Francisco Bay metropolitan complex, including the San Francisco, San Jose, Santa Cruz, Vallejo, Santa Rosa and Stockton metropolitan areas would grow a much faster 45.6 percent, from 8.1 million in 2010 to 11.9 million in 2060. The core city of San Francisco would add nearly 300,000, growing 36.3 percent to 1.1 million, (nearly the state rate). However, only 8 percent of the Bay Area growth would be in San Francisco, and 92 percent outside (Figure 3).  Four counties would add more than 500,000 residents, including Santa Clara (800,000), Alameda (680,000), Contra Costa (519,000), and newly added San Joaquin county, which is defined as the Stockton metropolitan area (620,000). San Joaquin County would also grow the fastest, at 90 percent, reaching 1.3 million. This growth is to be expected, since San Joaquin is one of the more peripheral counties, and where the metropolitan fringe (which includes the commuting shed) has been expanding the most.

The San Diego metropolitan complex, a “stand alone” metropolitan area, would grow nearly as slowly as Los Angeles. San Diego’s population of 3.1 million in 2010 would rise to 4.1 million in 2060, an increase of 30.8 percent.

Sacramento’s metropolitan complex includes the Sacramento, Truckee-Grass Valley and Yuba City metropolitan areas. Sacramento is projected to grow 52.8 percent, from 2.4 million in 2010 to 3.7 million in 2060.

Four additional metropolitan complexes with more than 1 million population are projected, all in the San Joaquin Valley.

Fresno, which includes Fresno County and Madera County, would grow from 1.1 million to 1.9 million, for a nearly 75 percent growth rate.

Bakersfield (Kern County) would be the fastest growing among major metropolitan complexes. Bakersfield would grow from 840,000 in 2010 to 1.8 million in 2060, for a growth rate of 111 percent.

Modesto (Stanislaus and Merced counties) would be the seventh largest metropolitan complex. From a 2010 population of 770,000, Modesto would grow 74 percent to 1,340,000. However, it is possible that by 2060 the commuting shed will reach the San Francisco Bay metropolitan complex, causing it to consume Modesto, as it already has Stockton.

In 2060, California would get its eighth major metropolitan area, with Visalia-Hanford reaching 1,040,000, up 74 percent from 2010 (Tulare and Kings Counties).

Outside of these areas, the largest metropolitan complex would be Salinas, which is projected to have 530,000 residents by 2060. However, Salinas is close enough to the San Francisco Bay Area that it could be added to that area’s commuting shed by 2040. The next largest metropolitan area would be El Centro (Imperial County), with a population projected to reach 340,000 by 2060. El Centro, however, could be included in the San Diego commuter shed by that time, making it a part of the San Diego metropolitan complex. The next largest metropolitan complexes would be in the northern Sacramento Valley, Redding and Chico, both approximately 300,000.

Only 2.4 million Californians lived outside the 8 major metropolitan complexes, or 7 percent of the population. Growth in these areas is expected to be slow, with only a 27 percent increase to 2060.

The Difficulty of Projections

Of course, it is virtually impossible to accurately predict demographic trends 50 years into the future. California’s slower than expected growth in recent decades reflected general economic weakness since 1990, and the impact of ultra-high housing prices, particularly on the coast. However, the 2060 California projections provide an interesting view of the future from today’s perspective.

Photo: Bakersfield: Fastest Growth Projected 2010 to 2060. “Bakersfield CA – sign” bynickchapman – originally posted to Flickr as P1000493. Licensed under CC BY 2.0 via Wikimedia Commons.

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris. Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism and is a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University.

 

[Originally published at New Geography]

Categories: On the Blog

Illinois Shouldn’t Bail Out Profitable Exelon’s Nuclear Plants

7 hours 17 min ago

Exelon, a huge utility with the largest fleet of nuclear plants in the U.S. is trying to extort increased subsidies from ratepayers and taxpayers in Illinois, threatening to close three under-performing nuclear power plants serving the state if the state government doesn’t throw it some more money. My colleague at Heartland, Senior Fellow James Taylor, has provided a devastating critique of Exelon’s “request.”

Exelon gives a number of reasons for the state to pay it to keep the three nuclear plants in question open, among them: to keep electricity reliable and to prevent costs from rising, and to protect the environment by avoiding the social costs of carbon-dioxide emissions. Taylor details why these arguments fail.

Exelon claims three of its six Illinois nuclear power plants are uneconomical without a new round of government assistance. Exelon blames its problems on lower-than-expected energy demand, low natural gas prices that bolster competitive natural gas power, and renewable energy subsidies and mandates that give unfair advantages to the wind power industry. While I agree with Exelon that subsidies and mandates give unfair advantages to renewable power sources, in Illinois, the wind industry in particular, I find the company’s complaints concerning competition in the marketplace almost laughable. Why? Because Exelon tout itself as a great advocate and defender of competition in the market place on its corporate website.

In its About Exelon Factsheet the company states, “Exelon maintains a strategic presence in key competitive markets and believes that competition drives choice, innovation and savings for businesses and residential customers alike. The company champions competitive power markets as the best framework for meeting important economic and environmental policy objectives, including ensuring the nation’s shift to a cleaner energy supply in the most cos teffective manner.”

Evidently competition in power markets is good, until Exelon can’t compete and then government support is subsidized. Imagine if automobile manufacturers and banks ran to the government for support every time market shifts made their investments unprofitable — oh, wait, my bad, we don’t have to imagine that. But just because the government bailed out failing companies in those industries, doesn’t mean it should do so here — Exelon is not threatened with failure and it money losing nuclear plants in Illinois are not “too big to fail.”

In fairness, its hard to assess whether Exelon’s three plants are actually losing money since, though the company is asking for additional subsidies, it refuses to open its financial records to public scrutiny. Despite Exelon’s claimed financial woes, the energy company recorded a net profit of more than $2 billion in 2014. Even if these plants aren’t profitable at current electric prices, it doesn’t mean they won’t be if prices rise as expected in the future. As Taylor argues:

If Exelon demands taxpayers guarantee solid profits for every individual component of its nuclear power plant fleet, then taxpayers can reasonably demand in return that Exelon not keep excessive profits from any individual component of its fleet. Exelon, however, does not offer to return excessive profits it has garnered from its other power plants.

Exelon threatens to shut down the three nuclear power plants if it does not receive its demanded taxpayer subsidies. Rather than cave in to such strong-arm tactics, which Exelon may employ again and again in the future, the legislature should consider taking steps to immunize electricity customers from similar future threats. Responding to Exelon’s threats by giving it protective regulation and subsidies that temporarily prop up uneconomical nuclear power plants would encourage rather than discourage Exelon from making similar threats in the future.

Another factor mitigating against Exelon’s claims is electric grid operator MISO Energy’s 2015/2016 generator auction, conducted in April 2015. High prices generated by the auction will add $13 million to Exelon’s Illinois nuclear power plant revenue. Also, cost structure changes approved by electric grid operator PJM Interconnection will increase Exelon consumers’ electricity bills and may add another $560 million in revenue for Exelon’s nuclear power plant fleet by 2018.

Concerning the effect on reliability and costs, a study conducted by four agencies in the state of Illinois found that there is little likelihood the loss of the three plants, even in extreme power situations, would result in reliability problems. The report indicates, there will be sufficient generation capacity for Illinois electricity demand, even if Exelon closes its at-risk nuclear power plants, during all but the most extreme foreseeable scenarios. However, most extreme scenarios would likely overwhelm capacity even if these three power plants remained operational. Even the minimal risk of insufficient capacity to meet demand would be alleviated if the state allowed lower-cost power plants to be constructed in response to the closure of Exelon’s nuclear power plants.

Concerning costs, the Illinois report found, any short-term cost impacts from Exelon shutting down the power plants could be mitigated by longer-term cost savings stating, “the closure’s actual or anticipated impact on electric energy and capacity prices would provide an incentive for firms to construct replacement generating facilities.” As Taylor notes,
Absent government interfering and distorting electricity markets, these replacement generating facilities would be less expensive coal and natural gas power plants. A short-term increase in retail electricity prices brought on by Exelon’s poor planning and decision-making could be offset by more economical coal and natural gas power plants replacing the uneconomical nuclear plants.

While the state government backs Exelon’s claim, to a limited extent, that subsidies and other costly interventions may be justified to keep its under-performing nuclear plants operating to avoid the “social costs of carbon,” as anyone following the climate change debate knows, carbon-dioxide is not a pollutant, but rather necessary to life on earth and the increase in carbon-dioxide the the past half-century has had tremendous benefits, including forests regrowth, natural desert reclamation and record crop yields (which have contributed to significant decreases in malnutrition and hunger).

By the same token, there scant if any evidence higher carbon-dioxide levels are causing harmful or extreme weather events. Tornadoes and hurricanes have become less frequent and severe. Droughts are no worse nor longer in duration now than historically recorded and death rates due to weather are declining rapidly.

Even if there are measurable social costs of carbon-dioxide that can be calculated accurately, Taylor shows harms from closing these three plants would be infinitesimal since the amount of carbon-dioxide avoided through continued their operation in lieu of replacement fossil fuel plants, would have no measurable effect on climate or temperature.

As important, every energy sources has negative environmental impacts, yet the Illinois agencies examining the case for government support for keeping Exelon’s three money losing nuclear plants open, failed to compare the social costs of carbon-dioxide emissions with the social costs of the environmental harms posed by other forms of energy generation. Looking just at wind power, for example, “while generating merely 3 percent of U.S. electricity, kills 1.4 million birds and bats, including many endangered and protected species, every year. Some 600 square miles of land must be developed with wind turbines to produce as much electricity as a single conventional coal-powered power plant. The power lines required to deliver wind power from remote sources to human population centers cause even more environmental damage and disruption.”

In the end, Taylor makes a dispositive case there is no compelling justification for Illinois state government to to bail out Exelon’s three nuclear power plants.

Categories: On the Blog

Vouchers in Waukegan? It’s a Real Possibility

7 hours 25 min ago

Last weekend in Chicago, Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute, spoke at a conference hosted by the Franklin Center about his efforts to initiate a voucher program in northwest suburban Waukegan.

Dabrowksi, a passionate supporter of school choice, described the power of school choice as “allowing parents and students to decide which school choice option is the best fit for them.” Milwaukee, Wisconsin was cited as having a long standing voucher program with good results.

Dabrowski rightly referred to the Waukegan public schools an educational tragedy with low-performing schools, also prevalent in other Illinois cities, especially in Chicago. Chicago is home to 45% of the state’s lowest-performing elementary schools and high schools.

Accordingly, half of the state’s lowest-performing schools are located outside of Chicago’s borders in Aurora, East St. Louis, Rockford, Springfield, and Waukegan. Surely the family members of students in these districts want the option to have their loved one attend a higher-quality school, realizing just how important a quality education is for their child’s future.

About Waukegan: With a population of more than 90,000, the depressed city of Waukegan sits on the shores of Lake Michigan just minutes away from the prosperous communities of Lake Bluff and Lake Forest, yet Waukegan is as different as night and day. The collapse of manufacturing led to a massive shift in the city’s demographics. Houses can be bought for almost nothing.  As such, low income families have moved in. Hispanics now make up more than half of Waukegan’s total population, representing nearly 77% students in Waukegan schools.

With the above facts in mind, Dabrowski, in concert with the Illinois Policy Institute, perceived Waukegan — about 40 miles north of Chicago — to be fertile ground to introduce a voucher program.

With $12,000 spent per pupil, only 18% of the students graduate college ready. Additionally, because of the low performance of Waukegan Community Unit School District #60, the Illinois State Board of Education, or lSBE, had designated the school district for a possible takeover.

In introducing his voucher program to Waukegan residents, Ted Dabrowski and his team knocked on 13,000 doors with a petition in hand to educate residents.  Realizing the program had to be packaged in different ways to Hispanics, blacks, and a white minority, his petition advocating school choice was printed in both English and Spanish.

An important observation to make is that the Waukegan voucher does not involve fighting for change at the legislative level, but instead at the grassroots level.  Although the Waukegan voucher initiative is still in its infancy, a recent change in the Waukegan School Board could move the project along.  In the recent 2015 election, several incumbent members were defeated by pro-reform candidates, increasing the potential for school choice.

Givemechoice.org, a delightful short video by the Illinois Policy Institute, can be viewed by clicking on the right side of this link page under the title, “School Choice in Waukegan.” This promotional video has been utilized in Waukegan and other venues to educate the public about the benefits of a voucher program.  The video was likewise shown by Dabrowski to the assembled conference participants to begin his presentation.

Featured in this whimsical, cartoon-designed video is Erica, a freshman at Waukegan High School, which, the video says, is not the best fit for her.  Because her parents lack the money to send Erica to a school where she might blossom, she remains stuck in a school that is determined by her address.  Givemechoice.org conveys a positive messaging of school choice without bashing traditional public schools, for who can oppose giving parents the right to choose?

As far as school choice becoming a legislative reality here in Illinois, it doesn’t look all that promising in the near future.

It was in 2010 when Rev. Meeks, a black minister and an elected representative from Chicago’s inner city, sponsored a Chicago School Choice bill which called for a voucher program. The bill passed in the IL Senate but not the House.  Although many current legislators do believe in school choice, after Meeks’ failure the legislation was never revived to be acted upon.

In expressing how virtual schools  are not for everyone,  Dabrowski described his experience in trying to start a digital learning charter school in January of 2012.  It was to cover eighteen school districts with its aim of getting 1,000 kids to be part of the system under K12 Inc (The  K12 International Academy is a fully accredited, private online K-12 school that liberates students from rigid schedules, classes that move too fast or too slow, bullying, and other factors that stand in the way of success.). Not only did Dabrowski’s proposal fail, but a one-year moratorium was issued against establishing a virtual learning charter school.

The following two arguments were proposed by Dabrowski to consider when confronted by individuals who object to vouchers.

1.  Pubic education is the education of the pubic, no matter what form it takes. 2.  It’s not about what we teach, but how we educate. The efforts being made by Ted Dabrowski on behalf of Chicago’s Illinois Policy Institute could help students succeed in Waukegan without excuses being made for low income or illegal immigrant students. As Dabrowski remarked, “Going the grassroots way, engaging families and children hoping for a better education, is the best way to compliment a lobbying effort in Springfield.” About the conference “Amplify School Choice Chicago” was held May 15-16 at the Sheraton Chicago Hotel and Towers. Sponsored by Franklin Center for Government & Public Integrity, a non-profit organization that promotes a well-informed electorate and a more transparent government, Franklin Center’s new project, “Watchdog Arena”, headquartered in Alexander, Virginia, spearheaded the Chicago event coordinated and led by Josh Kaib.  Mary Ellen Beatty, the Director of Journalism Operations for the Franklin Center, accompanied Mr.Kaib to Chicago (WatchdogArena.org is a news site powered by informed writers, bloggers, and citizen journalists. It will serve as a national publishing platform for articles that expose waste, fraud and abuse as well as examine a plethora of policy issues at all levels of government.).  Other Watchdog Arena events held this year were in Washington, D.C.; Phoenix, Arizona; Denver Colorado; and Atlanta, Georgia.

Speakers heard during Chicago’s two-day Amplify School Choice conference included: Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute; Andrew Broy, President of the Illinois Network of Charter Schools; Bruno Behend, Senior Fellow for Education Policy at the Heartland Institute; Myles Mendoza, Executive Director of One Chance Illinois; and Illinois Representative Jeanne Ives.

The following School Choice options were presented during the conference as alternatives to the traditional “brick and mortar” public schools, especially to serve the needs of children living in poor neighborhood.

  • Traditional public schools
  • Charter schools (publicly-funded, privately run
  • Vouchers (“Scholarships”)
  • Education Savings Accounts (ESAs)
  • Homeschooling
  • Private schools

Participants also participated in a tour of Leo High School led by its president, Patrick Hickey. Leo High School has been providing quality Catholic eduction to young men from Chicago’s South Side since 1926.  100% of its seniors have graduated in the last six years, and more than 96% of them have gone on to college.

[Originally published at Illinois Review]

 

Categories: On the Blog

Lawmakers Seek Broad Ban for Synthetic Drugs, ‘Legal Highs’

7 hours 26 min ago

Lawmakers in the U.K. are moving to ban synthetic psychoactive substances – colloquially known as “legal highs.” This may presage a similar policy move in the U.S. Ireland completely banned these “legal highs” in 2010.

These synthetic drugs are sold on the Internet, in chat rooms, and over-the-counter in some locales, and are made by sophisticated chemists who alter a molecule or two of their psychotropic formula whenever one of their substances have been banned by government regulations. This has been considered a global “gray” area of drug law.

But an increasing number of deaths from overdoses of the unregulated drugs have raised concerns among lawmakers. There are approximately 250 “head shops” in the U.K. that sell paraphernalia for snorting, smoking or injecting the legal highs.

U.K. Prime Minister David Cameron has been planning this move for some time, and the Conservative Party manifesto pledged a “blanket ban” on all new psychoactive substances to protect the country’s young people.

According to The Conservative Home Daily, an electronic newsletter published by the Tories, in London, the U.K. Home Office’s legal staff has been “grappling with how to ensure a watertight ban.Manufacturers are able to get round the law by making tiny changes to the composition of drugs every time a substance is banned. Suppliers would be required to prove their products were safe for human consumption,” the newsletter reported.

Another once legal, but risky substance, Gamma-Butyrolactone (GBL), has been outlawed in the U.K., after a medical student died as a result of an overdose.

Clockwork Orange, Bliss, Mary Jane

The London newspaper The Daily Mail reported that the availability of legal highs has skyrocketed in recent years – as has the number of cases of death, injury or mental illness linked to the drugs. “Substances such as Clockwork Orange, Bliss and Mary Jane have been blamed for admissions to casualty wards and mental health units,” the paper reported.

Liberty advocates have made an issue of these drugs, saying their availability has reduced crime related to the sale of illegal drugs. Public policy research offers conflicting information on the drug use trend, however.

Research by the U.K.-based Centre for Social Justice think-tank found that legal highs – also known as “new psychoactive substances” – were linked to 97 deaths in 2012, compared to just 12 in 2009. Hospital admissions from legal highs rose by 56 per cent in the same period in the U.K.

The CSJ warned that, based on current trends, deaths related to the drugs may be higher than heroin by next year – at about 400 fatalities a year in the U.K. alone.

Graphic: Courtesy U.K. Conservative Party.

Categories: On the Blog

The Civil Disobedience Charles Murray Wants Has Already Arrived

11 hours 51 min ago

While Charles Murray has been out promoting measured civil disobedience in an effort to restore individual liberty, thousands of parents and children have been acting upon the same concept. This spring has seen an extraordinary nationwide defiance movement aimed against standardized tests, thanks to Common Core. It could be, as Murray hopes for, yet another “thin edge of a wedge that can work to wonderful effect” in service of restoring self-government.

The federal do-gooders who framed No Child Left Behind back in 2001 never envisioned that parents would take exception to their mandate that every child in grades three through eight (and once in high school) face annual math and reading tests. So the law is entirely silent on what happens if, as is happening now for the first time, thousands of parents across the country pull their kids in protest.

It’s hard to convey just how extraordinary this is. So here are a few snippets from just the past week’s news. In Germantown, Wisconsin, 62 percent of public-school students are sitting out tests. The district has been a hotbed of Common Core opposition, with a local school board among one of the handful nationwide to reject Common Core and decide to run with its own, higher-quality, curriculum. In Maine, “Cape Elizabeth saw 32 percent of its eighth-graders, 18 percent of its seventh-graders and 64 percent of its high school juniors opt out. There are many examples of high opt out rates across the state, but a reliable statewide tally isn’t yet available.” A bill to secure parents’ right to excuse their kids from mandatory tests recently passed the Delaware House 36 to 3 after a blaze of opt-outs left local schools scrambling. “A wide-ranging bill that would eliminate [national Common Core] tests in Ohio and limit state achievement tests to three hours per year passed the House 92-1 on Wednesday,” reported the Columbus Dispatch.

This is nowhere near a set of isolated incidents. In Washington state, every single junior at Nathan Hale High School (natch) refused state tests this spring. Somewhere around 200,000 children refused tests this spring in New York and, contrary to race-baiting from U.S. Education Secretary Arne Duncan, substantial numbers of these defiant parents were not white rich people. FairTest, a lefty organization not keen on rigorous data, nevertheless keeps compiling an impressive number of similar news stories each week.

What does this mean? Does it matter? While the opt-out numbers are unprecedented in American history, they still represent a very small proportion of U.S. schoolkids. I think they do matter, and that they signal many Americans are ready for Murray’s civil disobedience project. Here’s why.

Pride Cometh Before a Fall

Let’s connect this story to another recent event that I think represents a watershed in U.S. education politics. The Fairfax County, Virginia school board recently voted 10-1 to allow teachers and children who will not acknowledge their DNA to embed themselves in the bathrooms, locker rooms, and sports teams of their non-biological sex. This decision is far more significant (seven states have similar laws) because the board made its decision against the clear wishes of a mob of parents who flooded the school board meeting in protest.

‘The federal government has been very clear that they expect local schools to amend their policies.’

“People are very disturbed by what just happened,” former school board member Mychele Brickner told the Washington Times. “They didn’t take parents into account. The fact that they passed a motion like this and created an additional protected class in the policy, and then they are going to let people see later what this means, that’s ridiculous. That’s exactly what happened with Obamacare.”

Why? Board members said they had no choice: The feds were threatening to yank $47 million, or 1.7 percent of the district’s annual budget, if they did not comply with the Obama administration’s reinterpretation of Title IX, which demands completely outside statute that schools enable teachers and children whose parents are indulging them in the dangerous fancy that they can somehow convert themselves into a member of the opposite sex, against science, tradition, psychology, and sanity.

“The federal government has been very clear that they expect local schools to amend their policies,” said John Foster, division counsel for Fairfax County Public Schools. This, by the way, is exactly the same pattern hundreds of local school boards, state school boards, and state legislatures have followed in the past several years when approached by desperate parents bearing evidence that Common Core does not actually provide for a quality curriculum: “Sorry, we can’t drop Common Core, or the feds will reclaim the money they took from our citizens in the first place.” Parents are getting sick of hearing that. What’s the point of a local school board if it can’t or won’t make any decisions local voters want?

We Don’t Need No Stinkin’ Federal Bribes

It’s a good question. The explosion of the General Welfare clause has turned local governments into mere functionaries whose job is to implement national policy, as James Buckley’s recent book has grossly detailed. His book also ties into Murray’s because it details how and why local government has attenuated as the regulatory state has grown.

Maybe it’s time for states to defy the feds over something a little more important.

Typically, local governments lose touch with their constituents by accepting federal grants through the administrative state. My husband, a native Montanan, laments the federal highway bribes that forced his state to lower speed limits, because Montana has cities separated by hundreds of miles of flat highway where no one is in danger of people driving 85 MPH. The more power the administrative state has, the more power the executive branch has to expand willy nilly into brute tyranny, as President Obama has done with abandon (and still essentially no remonstrance from Congress). Once local governments feel they depend on federal dollars, even if it’s as small a portion of their budgets as the 1.7 percent in this Fairfax situation, local citizens are powerless to demand that their officials pay attention to the people who provide not just that 1.7 percent but also the other 98.3 percent.

Incidents like these testing opt-outs and the parent fury in Fairfax show that people are getting it. They’re finding out what happens when the federal government is allowed to bribe local officials with the people’s money. What’s needed now is for those local officials to catch the “I refuse” fever from their constituents. Murray points out in a recent Cato Institute podcast that Colorado and Washington flipped the feds the bird by legalizing marijuana against federal law. Crunchy cons like me have also noticed similar sentiments growing among people who are finding ways to get around stupid raw-milk bans and regulations that attempt to obliterate our beloved midwives.

Maybe it’s time for states to defy the feds over something a little more important than marijuana. It’s time for a governor to say, “To heck with Congress’s inability to send our federal education dollars back with fewer strings attached. The cost of compliance with federal regulations is higher than the funds we get back from the feds. They can keep our stinking money. We don’t need the A-PLUS Amendment. We don’t need federal education funds at all. We can run our schools better, on slightly less money, without federal micromanagement.” Local school boards could do the same thing, especially those who don’t get much or any federal funds.

Because what we’re losing here is far more costly than the mere money we’re gaining. A number of states worked out the cost-benefit of NCLB before it passed, and found it cost them more than it brought them. So we’re losing both money and freedom. We’re losing money and our dignity. We’re sacrificing kids’ spirits and futures to bureaucrats who have never taught a child and can’t budget their way into the right amount to tip a waiter.

We’re also losing the ability to truly love transgender kids by working out local policies that protect them during a vulnerable time while not sacrificing the sexual innocence and vulnerability of the other 99 percent of kids. We’re losing the ability of teachers to actually look at and pay attention to the children in front of them instead of having to monitor the constant flow of mandatory testing data on an iPad. How can you count that in dollars and cents? You can’t.

Correction: An earlier version of this article incorrectly stated that the Fairfax Board voted in its new transgender policy unanimously.

[Originally published at The Federalist]

 

Categories: On the Blog

The Ten Catch-22s: Regulation of Natural Monopoly Utilities

12 hours 19 min ago

“No alleged ‘fact finding’ and no armchair speculation can discover another price at which demand and supply would become equal. The failure of all experiments to find a satisfactory solution for the limited-space monopoly of public utilities clearly proves this truth.” –Ludwig von Mises

Introduction & Background

Almost everyone outside the ‘world’ of Austrian School of Economics (or Austrian Economics), including mainstream free-market economists, unquestionably assumes that the regulation of so-called ‘natural monopoly utilities’ is both fair and necessary as well as efficient and effective. This is (to borrow a buzz word from the Left) ‘unsustainable’, in both theory and practice, as evidenced by the following ten realities or ‘Catch-22s’ of utilities.[1]

Utilities | 10-for-22

#1 Monopolies are unnatural (not natural)

#2 Markets are undefinable (not defined)

#3 Competition is a process (not a structure)

#4 Value is subjective (not objective)

#5 Prices determine costs (not vice versa)

#6 WACC as interest and return (not)

#7 Incentives are profits and losses (not formulas and benchmarks)

#8 Information is created and decentralised (not given and centralised)

#9 Regulation hasn’t worked (in practice)

#10 Regulation can’t work (in theory)

As a former mainstream economist myself, these ten Catch-22s (for better or worse … and without necessarily my ‘ringing’ endorsement of this), can be put in the context of the standard framework of Industrial Organisation Economics as follows (which is a subset ofNeoclassical Economics and by-and-large the basis for Regulatory Economics):#1 #2 #3 are ‘market structure’related; #4 #5 are ‘market conduct’ related; #6 #7 #8 are ‘market performance’ related; and #9 #10 are ‘market intervention’ related

Structure and conduct are supposed to help address why, where and when there should be regulation. Conduct and performance are supposed to help address what and how to regulate. Intervention is supposed to help address if regulation can (positively or negatively) impact the other areas … usually assuming, unwisely, that regulation had no negative impact previously, and that regardless it can still impact positively going forward.

Market Structure (#1 #2 #3)

#1 Monopolies are unnatural (not really natural)

#2 Markets are undefinable (not really defined)

#3 Competition is a process (not really a structure)

Orthodox economic theories on the ‘market failure’ of ‘natural monopoly’ versus ‘perfect competition’ (along with competition policy and antitrust law approaches to ‘market definition’) provide most of the rationale for heavy-handed (price, service, etc) regulation of utilities, starting with standard economic theories of ‘market structure’. Even though many mainstream economists acknowledge that ‘natural monopoly’ and ‘perfect competition’ are ‘blackboard’ ideals, at the end of the day they are still the benchmarks for whether to regulate or not … and to continue to do so, or not.

In both Austrian Economics theory and real-world practice, ‘markets’ are just a convenient and aggregated description of the constant flux of exchange opportunities created and discovered by suppliers and consumers with ‘skin in the game’. And, of course, “[d]efining a market narrowly enough will always yield market power; defining a market broadly enough may always yield perfect competition” thus “[a market] cannot be independently established as such apart from consumer preference on the market”.

As to ‘perfect competition’, perhaps economics Nobel Laureate Friedrich Hayek said it best: “… competition is by its nature a dynamic process whose essential characteristics are assumed away by the assumptions underlying static analysis” thus “… ‘perfect’ competition means indeed the absence of all competitive activities.”

More importantly, the little known history of ‘natural monopoly’ (in the US, at least) teaches that there was plenty of effective competition (and its attendant decreasing prices, and increasing service quantity and quality, etc) prior to the less effective competitors lobbying for market protection regulation in exchange for utility oversight regulation. Plus, if a utility monopoly were natural (ie could produce at a lower total cost than all others, actual and potential) it would not be in need of all of the other types of regulations (intentionally and unintentionally) preventing ‘market entry’.

In fact, the regulation of ‘natural monopolies’ started well before the theory of ‘natural monopoly’. It first started federally in the USA with rail in the 1870s, and at state level with utilities from 1907 (in my home state of Wisconsin). The most modern forms of utility regulation were much later adopted in the UK from the 1980s and Australia and elsewhere from the 1990s … the former starting with telecommunications and the ‘temporary’ ‘RPI-X’ approach founded by UK Professor Stephen Littlechild (who is no ‘stranger’ to Austrian Economics).

Market Conduct (#4 #5)

#4 Value is subjective (not really objective)

#5 Prices determine costs (not really vice versa)

All the different approaches to ‘market conduct’ under utility regulation are all founded on the (explicit or at least implicit) assumption that value (particularly costs) are objective and that they do (or should) determine prices. Firstly, costs are prices too, just from another’s point of view. Secondly, causation largely flows the opposite way from prices to costs, not costs to prices. Thirdly, all values (that determine opportunity costs and prices through exchange) are subjective not objective. Fourthly, pricing and other value related decisions are made at the margin … margin meaning ‘what happens next’, not necessarily one additional unit of output and certainly not an infinitesimal change as per the calculus. Not understanding this, led Classical economists and Karl Marx to get stumped by the ‘diamond water paradox’.

All of this was established by one of the ‘founding fathers’ of the ‘marginal revolution’ in economics (for both Austrian and Neoclassical schools), Carl Menger, who said: “Value is … nothing inherent in goods, no property of them. Value is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence value does not exist outside the consciousness of men … [T]he value of goods … is subjective in nature.” Another way of putting this is: “Marx would say pearls have value because people dive for them (thus supplying labor). Menger would retort that people dive for pearls because people value them.”

It is also worth noting that in real-world free-markets, prices are determined in exchange byEugen von Böhm-Bawerk’s marginal pairs, often between extremely narrow margins of: “the valuations on the one hand of the marginal buyer and those of the marginal offerer who abstains from selling, and the valuations on the other hand of the marginal seller and those of the marginal potential buyer who abstains from buying.”

Market Performance (#6 #7 #8)

#6 WACC as interest and return (not really)

#7 Incentives are profits and losses (not really formulas and benchmarks)

#8 Information is created and decentralised (not really given and centralised)

In terms of ‘market performance’ under utility regulation, the focus in orthodox theoryshould be on monopoly versus competitive prices, but in practice it is on monopoly versus competitive costs, profits, returns, as well as other incentives and information. The omission of losses, shut downs and bankruptcy are of in themselves enough to virtually guarantee sub-optimal utility performance over time (in terms of entrepreneurial innovation, efficiency/productivity, prices, quantity, quality, customer service, etc).

In the earlier days of the operation of utility regulation outside of the US (such as in the UK, Australia, NZ, etc), the regulatory debates tended to center around the scale and scope of the current regulated asset base (and its depreciation and return, reasonably expected going forward) plus those operating expenditures (opex) and capital expenditures (capex) reasonably expected going forward (and its depreciation and return). In more recent times, the debates tend to center around returns only. In addition such returns, unlike in the US for example (where broader commercial and fairness factors are more important and explicit), are very much focussed around finance theory rather than finance practice … almost always the weighted average cost of capital (WACC) and the capital asset pricing model (CAPM), plus increasingly financeability.

As per Frank Knight (and unlike WACC & CAPM), the real-world of free-markets is more about dealing with unquantifiable uncertainty rather than semi-quantifiable risk. Interest is the less uncertain reward to capitalists (including management), whilst profit is the more uncertain reward to entrepreneurs.

It is important to understand that interest is more fundamental than just bank money interest. As Hayek’s contemporary Murray Rothbard said, interest is: “… the pure exchange ratio between present and future goods. This rate of return is the rate of interest.” He furthermore stated: “… the capitalists are … providing present goods to the owners of labor and land and thus relieving them of the burden of waiting until the future goods are produced and finally transformed into consumers’ goods.”

Returns are, of course, profits and losses compared to assets and liabilities. Accountants primarily determine what these were historically, and that is a very important source of information. Based on this and many other factors, entrepreneurs, savers, investors and others react to this and other information and thus set their expectations going forward for future returns. In this regard, Rothbard stated: “… there is no sense whatever in talking of a going rate of profit. There is no such rate beyond the ephemeral and momentary. For any realized profit tends to disappear because of the entrepreneurial actions it generates.” He importantly added that: “A grave error is made by a host of writers and economists in considering only profits in the economy. Almost no account is taken of losses. … [from] when an entrepreneur has made a poor estimate of his future … .”

As for entrepreneurs, Spanish Professor Jesús Huerta de Soto reminds: “… entrepreneurship is a distinctive phenomenon of the real world, which is in a perpetual state of disequilibrium and cannot play any role in the equilibrium models that absorb the attention of Neoclassical authors. Moreover Neoclassical theorists view entrepreneurship as an ordinary factor of production which can be allocated depending on expected costs and benefits. … their thinking involves an insoluble logical contradiction: to demand entrepreneurial resources based on their expected costs and benefits entails the belief that one has access today to certain information (the probable value of future costs and benefits) before this information has been created by entrepreneurship itself. … until this process of creation is complete the information does not exist nor can it be known … .”

Market Intervention (#9 #10)

#9 Regulation hasn’t really worked (in practice)

#10 Regulation can’t really work (in theory)

In terms of ‘market intervention’, there have been few comprehensive empirical studies, but these show a poor performance for utility oversight regulation. This is not surprising, given the lack of economic and political incentives to do so.

Hayek and Rothbard’s mentor Ludwig von Mises would not be surprised by such studies, as he said a long time ago regarding government central planning (of which regulation is just one form) that: “Where there is no free market, there is no pricing mechanism: without a pricing mechanism, there is no economic calculation.” In addition: “Economic calculation makes it possible for business to adjust production to the demands of the consumers.” And: “Economic calculation can only take place by means of money prices established in the market for production goods in a society resting on private property in the means of production.”

Thus, as Hayek once lectured other economists: “… the effects on policy of the more ambitious constructions have not been very fortunate … [due] to a pretenseof exact knowledge that is likely to be false.”

Conclusion & Policy

In light of all this, it seems that is about time that some significant reform paths to genuine free-markets (or at least more free ones) were more seriously considered in my two homes of the USA and Australia (and in the UK, NZ and elsewhere). Pro choice and competition reforms not only need to take genuine steps in the right direction towards free-markets (without offsetting steps backwards, at the same or over time), but should also focus on the ‘main game’ of removing government’s own barriers to market entry (along with it’s other barriers to buyers, capital, complements, cooperation, rivalry, substitutes, suppliers, etc).

There are an almost infinite number of creative ways to undertake such reforms. To date they have mainly included (third party) access regulation, lighter-handed (monitoring) regulation, deregulation, privitization and/or others … but unfortunately have not yet included the only real solution which is the ultimate liberation of ‘natural monopolies’ and their potential competitors, consumers and economies. One largely successful practical reform from my own experience (particularly re so called ‘monopoly rents’) is the decade-plus price (and service quality) monitoring regulation of major airports in Australia. Some other practical reform ideas include those written about by Professor Littlechild such ascustomer engagement and negotiated settlements.

Admittedly, like most other economists and others, my predictions on exactly when something is going to happen (or the quantum thereof) hasn’t always been the best. That is however not the case when it comes to the expected qualitative consequences from less regulatory intervention versus more. Overall and over time, the former are largely positive, foreseen and intended, whilst the latter are largely negative, unforeseen and unintended. Free-market ‘friendly’ reforms, even when just small steps, deliver net (and almost exponentially growing) returns to the most individuals possible in terms of entrepreneurial innovation, economic growth, sustainable jobs and consumer welfare. So, given that ‘time is money’, let’s get started!

“The very term ‘public utility’, furthermore, is an absurd one. Every good is useful ‘to the public’, and almost every good, if we take a large enough chunk of supply as the unit, may be considered ‘necessary’. Any designation of a few industries as ‘public utilities’ is completely arbitrary and unjustified.” – Murray Rothbard

[1] I have worked in and around the regulation of  ‘natural monopoly utilities’ for quite some time now – ie for my whole post-university career by-and-large, almost 20 years now as an economist, regulatory analyst and project manager. At first, I believed that such regulation was fair and necessary as well as efficient and effective. The ‘cracks’ in this belief first started to appear for me in the late 1990s (when I was working for a state utility regulator in Australia). These ‘cracks’ continued to widen for me as I experienced more-and-more utilities regulation (and more-and-more life) around Australia and then in the UK from 2008 to 2010. My time in the UK (plus my frequent travel to the US during that period) blew these growing ‘cracks’ wide open, along with my eyes … as it was in the UK that a rediscovered the Austrian School of Economics through the Institute of Economic Affairs and shortly thereafter discovered the Ludwig von Mises Institute.

[First posted at Mises.]

Categories: On the Blog

Heartland Daily Podcast – Seton Motley: Disney Sues Verizon Over “A La Carte” Service

May 25, 2015, 3:42 PM

In today’s edition of The Heartland Daily Podcast, Director of Communications Jim Lakely speaks with Seton Motley, President of Less Government. Motley and Lakely talk about the pending lawsuit between Disney and Verizon.

With the growing popularity of a la carte television services, Verizon offered a package that would include specific channels, including ESPN. Disney says while they are open to innovation, it must be done within the terms of their contracts. Motley says Disney is trying to avoid the inevitable.

[Subscribe to the Heartland Daily Podcast for free at this link.]

Categories: On the Blog

This Memorial Day, if You Listen to One Podcast, Let This Be the One

May 25, 2015, 7:53 AM

As we ponder the valiant choices made by the men and women who have stood against a Hobbesian world to preserve our Republic, you might want to spend a few minutes with this podcast of a broadcast of Constitutionally Speaking by Dave Shestokas. It is perhaps the finest interview yet conducted on the Compact for America Initiative and the Compact for a Balanced Budget effort.

The Compact for a Balanced Budget has already been joined by Alaska, Georgia, Mississippi, and North Dakota. It is being overseen by the first Interstate Commission in history with the purpose of representing the States in amending the U.S. Constitution. Alabama, Michigan, North Carolina, and Ohio are currently considering legislation to join it. And Congress could soon activate the Compact by passing HCR 26 with simple majorities and no presidential presentment.

This growing movement is relevant to our meditations this weekend because of the oath taken by our brave servicemen.

The bottom line is that our Republic is hanging by a thread, having been damaged more greatly by its internal politics than anything else. There’s a structural reason for that:

* The Constitution mistakenly allows the federal government unlimited borrowing capacity, which creates the illusion of unlimited resources, which guarantees unlimited government captured to serve special interests when politicians use the illusion of unlimited resources to promise anything it takes to get elected.

* The 16th Amendment to the Constitution, as currently interpreted, mistakenly bestowed upon the federal government limitless taxing power, which further propels the limitless growth and unbounded reach of the federal government.

* The 17th Amendment to the Constitution mistakenly removed the States from a position of control over the U.S. Senate, which consolidated all national power in the Washington political class, which made disregarding the will of the American people and federal overreach far easier.

These structural defects can only be remedied by a constitutional amendment. The Compact for a Balanced Budget’s amendment does just that:

* It limits the federal government’s borrowing capacity.

* It restores the States (and the American people) to relevance in national policy making by giving them control over any increase in the federal government’s borrowing capacity.

* It limits the federal government’s taxing power by targeting it to reducing favoritism in the tax code and encouraging more voluntary and transparent forms of taxation.

We owe it to the men and women who risked and lost their lives to use the ultimate tool we have to restore the Republic — the power states hold to amend the constitution by convention and the power of interstate compacts to make it user-friendly.

There are no guarantees in life except for failure if we do nothing but yield to the political status quo.

If you like what you hear in the interview, consider getting involved here: http://www.compactforamerica.org/#!get-involved/cecw

And stay tuned for details on our Freedom Fest Article V debate and Compact for America workshop on July 10, 2015 at Planet Hollywood, Las Vegas!

Categories: On the Blog

Public Utilities: A Tax Hidden In Plain Sight

May 25, 2015, 12:33 AM

Although ‘Main Street’ is still stuck in Obama’s ‘Great Mailaise II’, the same does not appear to be the case for ‘Wall Street’ in general and for the construction industry in particular.

Many would argue that this is more about money inflation by the Fed than economic fundamentals, but that is perhaps a topic for another day. Slightly up with other stocks are those of so called public utilities. Public utilities don’t compete for a huge amount of equity finance in the US (less than 4%, on some estimates), but they certainly do so in terms of US debt finance in the form of municipal bonds (more than 9%, on some estimates).

Given that public utilities, even privately owned ones, are so heavily regulated and controlled by government, such competition for finance by them is more akin to crowding out of other investment. This drain on the economy is made far worse given every business and household is directly and indirectly impacted by the seemingly never-ending rise in utility prices (plus poor quality, and lack of innovation). The state and federal regulation of these ‘so called’ natural monopolies (very worryingly, now including the Internet) in fact virtually ‘locks in’ such an upward trajectory. Thus, it is in reality a tax hidden in plain sight.

The reason this system of regulation is akin to a tax, is that unlike most other forms of regulation, it regularly produces readily identifiable impacts in the form of the regulated prices that have to be paid directly or indirectly by every business and household in the country. These ‘pseudo-taxes’ are almost always on the rise like real taxes (as per the diagram below), and also like the latter include all of the predictable inefficiencies associated with government central planning (ie the government regulators) and government protected cronyism (ie the utilities themselves).

Like the Fed which does not control but creates inflation, this regulatory system does not control but creates monopoly prices … through such mechanisms as entry barriers, competition restrictions and substitution impediments as well as through regulatory capture and other Public Choice Theory effects. Even more fundamentally, these prices aren’t even real prices as such, due to the impossibility of socialist economic calculation … as pointed out by one of the 20th century’s greatest economists and thinkers who once said:

“No alleged ‘fact finding’ and no armchair speculation can discover another price at which demand and supply would become equal. The failure of all experiments to find a satisfactory solution for the limited-space monopoly of public utilities clearly proves this truth.” – Ludwig von Mises

The little remembered history of such regulation (in the US, at least) was that there was initially, and for quite some time, plenty of effective competition (and thus decreasing prices, and increasing service quantity, quality and innovation) prior to the less effective competitors lobbying for market protection regulation in exchange for utility oversight regulation. In addition, the economic theory of natural monopoly came much later, well after such regulation started. This type of regulation started federally with rail in the 1870s, and at state level with other industries from 1907 in my home state of Wisconsin.

I have worked in and around the regulation of public natural monopoly utilities for quite some time now – ie for almost 20 years as an economist, regulatory expert and project manager. At first, I believed that such regulation was fair and necessary as well as efficient and effective.

The ‘cracks’ in this belief first started to appear for me in the late 1990s (when I was working for a state utility regulator in Australia). These ‘cracks’ continued to widen for me as I experienced more and more utilities regulation (plus more and more life) around Australia and then in the UK in the late 2000s. My time in the UK (plus my frequent travel to the US then and since) blew these growing ‘cracks’ wide open, along with my eyes … as it was in the UK that a rediscovered the Austrian School of economics.

Despite the importance of these services and their costs to poor and middle class households as well as to many small, medium and large businesses, public utilities have been largely ignored by think tanks in the US and around the English-speaking world. Although, honorable mentions are deserved for the following:CAEM (energy reform); IEA (annual utilities regulation conference); IER (energyreform); IPA (utilities regulation submissions); and Reason (airports and roads reform).

There are certainly a number of academics in the US, UK, Australia and elsewhere specializing in public utilities, but most do not seriously analyse much less promote free market friendly reforms such as: commercialization and corporatization; privatization and PPPs; customer engagement and negotiated settlements; lighter-handed regulation; and deregulation and liberation.

It has thus been largely taken for granted for well over a century that these natural monopoly markets fail and thus should continue to be directly and indirectly regulated as well as sometimes continue to be government owned … despite the fact that therefore prices always go up, quality always goes down, and innovation is completely lacking. This is why I created the following 10 realities or ‘Catch-22s’ of public utilities (originally published here for Mises.ca … and where I offer an Austrian economics ‘smack down’ of the ‘lamestream’ economics and ‘crony capitalism’ underpinnings of permanent public utilities regulation):

Public Utilities | 10-for-22#1 Monopolies are unnatural (not natural)

#2 Markets are undefinable (not defined)

#3 Competition is a process (not a structure)

#4 Value is subjective (not objective)

#5 Prices determine costs (not vice versa)

#6 WACC as interest and return (not)

#7 Incentives are profits and losses (not formulas and benchmarks)

#8 Information is created and decentralised (not given and centralised)

#9 Regulation hasn’t worked (in practice)

#10 Regulation can’t work (in theory)

Hopefully the gaping theoretical, statistical and historical shortcomings of public utilities regulation can be put more and more on the ‘radar’ of the long suffering businesses and households of America and elsewhere. This is especially the case, given what one of the 20th century’s greatest libertarians and ‘renaissance men’ pointed out:

“The very term ‘public utility’, furthermore, is an absurd one. Every good is useful ‘to the public’, and almost every good, if we take a large enough chunk of supply as the unit, may be considered ‘necessary’. Any designation of a few industries as ‘public utilities’ is completely arbitrary and unjustified.” – Murray Rothbard

[First published at Townhall.]

Categories: On the Blog

Almost Half of State Health Insurance Exchanges Are Fighting for Survival

May 25, 2015, 12:05 AM

Almost half of the 17 health insurance exchanges set up by the states and the District of Columbia under the Affordable Care Act (ACA), also known as Obamacare, are in trouble financially, The Washington Post reports.

The setbacks are creating fiscal headaches for state officials, just five years after the passage of President Barack Obama’s massive health care reform bill.

Many of the exchanges are dealing with rising costs, especially those related to inefficient technology, expensive customer support centers, and unexpectedly low enrollments.

To stave off financial crisis, state officials are considering a number of solutions, such as raising fees on insurers, cost-sharing with other states, and begging state lawmakers for a quick shot of cash. Others are looking at turning over the whole enterprise to the federal exchange HealthCare.gov.

Enrollment Short of Predictions

Dr. Roger Stark, a health care policy analyst at the Washington Policy Center and a retired physician, says many state exchanges were set up as public-private partnerships and were required to be financially self-sufficient, but enrollment for most exchanges has fallen short of predicted levels.

“Premium fees to support the exchanges have consequently not met goals,” Stark said. “Washington State, where individual-market enrollment is at 60 percent of [the] predicted [level] and 80 percent of overall enrollees are in Medicaid, is an excellent example.”

Universal Aspirations, Financial Nightmares

Several mostly blue states jumped on the health insurance exchange bandwagon as a way of showing support for Obamacare, says Merrill Matthews, a resident scholar with the Institute for Policy Innovation.

Something similar happened in 1993 and 1994 with Clintoncare, Matthews says. Several states passed their own versions of the Clinton health care proposal—which never passed in Washington, DC—explaining they were going to reduce the number of uninsured and thereby save so much money they eventually would be able to provide universal coverage for all their residents.

“Those universal-coverage dreams turned into financial nightmares, and every one of those states eventually dramatically modified, scaled down, or eliminated their plans,” Matthews said.

“It’s entirely possible we will see something similar with health insurance exchanges, though what direction those changes take would depend on the Supreme Court’s June ruling,” Matthews said, referring to the decision in King v. Burwell. In King, the plaintiffs are challenging the IRS’ decision to provide subsidies for insurance purchased through federal exchanges in defiance of the explicit wording of the ACA.

‘Doomed from the Start’

Greg Scandlen, founder and director of Consumers for Health Care Choices and a senior fellow at The Heartland Institute, which publishes Health Care News, says the situation is another example of the federal government’s interference in the U.S. economy.

“Policy wonks sit around a table in Washington, DC and make ambitious plans for ruling the world without any understanding of what it takes to run a business, in this case, a health insurance exchange,” Scandlen said.

Categories: On the Blog

Memorial Day 2015

May 24, 2015, 8:59 PM

A lone U.S. Army bugler plays Taps at the conclusion of the First Annual Remembrance Ceremony in Dedication to Fallen Military Medical Personnel at Arlington National Cemetery, March 11, 2009. (DoD photo by Mass Communication Specialist 1st Class Chad J. McNeeley/Released)

We need to remind ourselves that Memorial Day is not just another three-day weekend or a day when all manner of sales are offered to those who want to go shopping. It is a day set aside to honor the ultimate sacrifice of those who have fought to defend our nation and take military action in foreign nations. We honor, too, those who suffered wounds and returned home.

We like to think of America as a nation that has gone to war only when we had to, but a new book, “America Invades: How We’ve Invaded or Been Invaded with Almost Every Country on Earth” tells a different story based on history.

As documented by its authors, Christopher Kelly and Stuart Laycock, America, “has invaded or fought in eighty-four out of 194 countries (countries recognized by the United Nations and excluding the United States) in the world. That’s 43 percent of the total. And it hasn’t been militarily involved with just ninety or a hundred countries. It has had some form of military involvement with a spectacular 191 out of 194. That’s more than 98 percent.”

“Most people,” the authors note “would probably agree that much of what America has done around the world has clearly been wise and noble (as in helping liberate Europe from Nazi tyranny.) Some, however, have been wrong and/or unwise. And some of what America has done has been in-between. In some sense, it’s like looking at the history of one’s own family. And, indeed, all of it—the liberations, the fiascos, and follies—is, in some sense, part of the history of every American citizen.”

That’s why it is a good idea to pause on Memorial Day because as an American it is part of your history. “Americans are always hoping for peace but usually preparing for war” says the authors who remind us that “the American eagle is an ambivalent bird holding arrows in the talons of one foot and an olive branch in the other.”

Our natural instinct is for peace. Only aggressive nations, usually led by despots, want war. That is not a description of America. We have not, however, shied from war when the enemy was a well-defined aggressor.

“In the twenty-first century, the United States, though challenged by Russia and China, is the sole remaining superpower. The global responsibilities that we began to shoulder in the twentieth century seem today more burdensome than ever. The cost of being the world’s policeman seems exorbitant in terms of both lives and treasure.”

That’s why we need to remind ourselves that, as a former Secretary of Defense, Robert Gates, has said of America, “We are the indispensable nation.”

We have learned what happens when our President has retreated from the responsibility to deter war. Since leaving Iraq with no U.S. military ground support that nation which was stable at the end of our war there has come under attack by the Islamic State. The President’s efforts to reach a deal with Iran that would allow them to become a nuclear power is causing Arab states to regard the U.S. as abandoning them and could lead to a nuclear arms race in a part of the world that is far from stable.

The U.S. in the wake of World War Two has a vast network of bases and alliances that span the world. Many of those bases were created at the invitation of the host nation. The result, as the authors note is that “The U.S. military, but virtue of its global reach, is almost invariably the first to respond to natural disasters as they occur around the world. If not us, then who will?”

On Memorial Day we honor our sons and daughters who gave their lives when their nation called on them.

“Today the sacrifice of over 218,000 American servicemen and servicewomen is memorialized in military cemeteries in twenty-four different overseas cemeteries in eleven different countries. The boundaries of Jefferson’s Empire of Liberty, therefore, stretch around the world.”

We worry about the emergence of other world powers, but I doubt that Russia which lost 127 million of its people in World War Two or China which is focused on building an economy based heavily on world trade are serious wartime threats.

That does not, however, exclude the likelihood that events may cause the next President to conclude that the only way to put the lid on the Middle East is to return militarily to Iraq and to make it clear to Iran that its nuclear ambitions are untenable and unacceptable.

The ancient Romans knew a truth they share in the phrase, “Si vis pacem, para bellum.”  If you want peace, plans for war.

About the only thing that is predictable is that somewhere in the world there will be new wars and, given its power and its responsibility, America may well be engaged in restoring the peace.

[First posted at Warning Signs.]

Categories: On the Blog

Activists Blur Distinction Between Animal Welfare, Rights

May 24, 2015, 9:17 AM

What do Corky the orca and Hercules the chimpanzee have in common? Neither are “persons.”

Although those facts seem noncontroversial, both required adjudication.

In April, it took a correction from Manhattan Supreme Court Justice Barbara Jaffe to establish that Hercules was not in fact a person eligible for a writ of habeas corpus. The New York Post reported that the judge “acknowledged that she inadvertently got turned into a monkey’s uncle by signing court papers, submitted by (The Nonhuman Rights Project,) that inadvertently bestowed human status on two chimpanzees” used at a state university.

The case is not over. A hearing on whether the “imprisoned” chimpanzees have special humanlike rights is scheduled for May 27.

In Corky’s case, People for the Ethical Treatment of Animals (PETA) sued Seaworld seeking the release of Corky and four other whales. In the case heard in federal court in 2012, PETA sought to extend the constitutional right against slavery to whales, which the group’s lawyer, Jeffrey Kerr, awkwardly conceded, “happen not to have been born human.”

Mr. Kerr said that PETA’s “lawsuit stands for the simple but powerful proposition that slavery does not depend on the species of the slave any more than it depends on the gender, race or religion of the slave.” He called the case “the next frontier of civil rights.”

PETA’s case was dismissed in 2013, and to date, animals are still not recognized as humans. But the animal rights activists pledge to fight on.

Indeed, animal “rights” activists scored a victory earlier this year – not in court – but through political tactics. Their perpetual stream of litigation and proposed bans of elephants in circuses caused Ringling Bros. to phase out its use of elephants in their circus.

These cases are part of a broader campaign in which radical activists purposefully seek to blur the important distinction between “animal welfare” and “animal rights.”

Simply put, animal welfare is the notion shared by all decent humans that we should take good care of animals. Animal rights, on the other hand, is a system where whales can be considered slaves and research chimpanzees have “personhood.”

Wesley J. Smith, senior fellow in Human Rights and Bioethics at the Discovery Institute, points out that, “knowing that most of society disagrees” with the animal rights approach, “animal rights organizations often hide their radical ultimate agenda (to end all human use of animals) behind a facade of animal welfare-style activism.”

Smith points out that animal rights groups are happy to co-opt society’s appropriate belief in animal welfare to advance their unpopular animal rights approach.

In fact, Humane Watch reports that according to public polling, “about 70 percent of Americans mistakenly believe that (the Humane Society of the U.S.) is a pet shelter ‘umbrella group’ and that HSUS gives most of its money to pet shelters.”

But Humane Society of the U.S. doesn’t run any pet shelters and only gives 1 percent of its budget to local shelters.

So while HSUS fundraising focuses on animal welfare such as dog and cat rescue, it spends donor money on radical rights advocacy.

How radical are these groups? In one disturbing campaign, on Holocaust Remembrance Day this year, April 16, animal rights activists held a funeral procession in New York City to remember pigs and cows who are “victims of the animal holocaust.”

Lest you think this was just one careless campaign by the most radical of radicals, PETA itself sponsored a “Holocaust on a Plate” campaign in 2003 to rail against the eating of animals. Lisa Lange, PETA’s then vice president of communications, defended the appropriateness of the campaign, telling CNN, “Nazi concentration camps were modeled after slaughterhouses.”

The groups don’t compare our use of animals to the holocaust merely because of its shock value; they use it because it is central to their radical animal rights agenda, which, unlike animal welfare, is based on moral equivalence between animals and humans.

When animal rights extremists raise huge sums of money off our concern for animal welfare, but use the money to advance a rights agenda, they divert critically needed money, awareness and advocacy-resources away from actual animal welfare.

Radical activists such as PETA and their allies have become better at masking their unpopular agenda. But don’t be fooled. The best way to come together and truly protect animals is to advance animal welfare and reject animal rights.

 

[Originally published at Pundicity]

Categories: On the Blog

Mark Bittman’s ‘A Bone To Pick’ Continues His War On Food

May 24, 2015, 8:40 AM

Don’t let his bespectacled, mild-manner fool you: Mark Bittman is the foodie version of a war-monger.

“There’s a war here,” the New York Times columnist proclaimed at a food conference last year. His battle is America’s next social justice crusade much like civil rights and suffrage. But this time, the oppressors are McDonald’s, Wal-Mart and Monsanto. From soda to sugar to meat, Bittman has declared war on nearly every ingredient in the American food system.

And if the pen is mightier than the sword, Bittman is the literary Napoleon of the progressive food movement. He depicts our food system as enemy territory that must be conquered then ruled by the omnipotent culinary elite in Manhattan and San Francisco with support from taxpayer-funded bureaucrats in Washington, DC.

His latest book, “A Bone to Pick” (Penguin Random House, May 5), is a collection of Bittman’s NYT columns on how to “un-invent this food system” that has been “a major contributor to climate change, spawned the obesity crisis, poisoned countless volumes of land and water, wasted energy and tortured billions of animals.”

Like all good social warriors, Bittman is armed with a plan for victory. The introduction of the book is his “Food Manifesto for the Future,” which lists a number of government-controlled remedies from the rational (limit subsidies) to the banal (mandate more labeling) to the outlandish (offer cooking classes for everyone and even give free cookware and cooking assistance to poor people.) Nearly every solution requires the reach of the federal government—which Bittman refers to as the “entity that is supposed to be vigilant regarding our health and welfare”—and the largess of the American taxpayer.

Other entries are somewhat comical, such as his suggestion to convert suburban lawns into vegetable gardens. “If you want to plant a lawn, that’s fine though it’s a waste of water and energy…Lawns are an attempt to dominate and homogenize nature.” Another column fantasizes about his “dream food label” designed as a stoplight for witless American consumers.

But few of Bittman’s strategies are revolutionary; in fact, many have been tried with limited or no success. Consider his repeated call to limit consumption of soda, sugar and processed foods by children. He cites California’s ban on sugary drinks and restrictions on unhealthy snacks in public schools over the last several years. The result? By 2010, California’s childhood overweight/obesity rate dropped—by 1%. It’s still an eye-popping 38% among adolescents despite massive statewide efforts to stem the crisis.

He often promotes taxing unhealthy food to fund subsidies and access to healthier food, such as his idea to convert “soda machines to vending machines that dispense grapes and carrots.” Pushing fresh produce is a big goal for many urban leaders and is being tried at great expense and unknown results. The CDC’s Putting Prevention to Work fund is one such example: The federal government gave local governments money to reimburse corner stores to buy refrigerators to sell produce.

Even when food corporations try to satisfy Mr. Bittman’s agenda, he questions their motives and integrity. McDonald’s is one example; it’s a frequent target in his book. He mocks the company’s efforts to please him, writing that McDonald’s wants foodies like “…me to stop kvetching and instead acknowledge that they’re making great strides in promoting health.” He sniffs that “only the most gullible will buy” McDonald’s attempts to offer healthier menu choices. Bittman has pointed to “the decline of McDonald’s” as a win for the food movement.

Wal-Mart is another product of capitalism on Bittman’s enemies list. Its efforts to offer more affordable produce is lambasted in the book, claiming the retailer will “beat the living daylights out of produce suppliers, crushing a few thousand more small farmers.” Apparently, to Bittman, inefficient organic farmers are more important than struggling families who want inexpensive vegetables. Wal-Mart is the largest grocery store in America with more than 3,000 stores nationwide and could play a major role in the private market’s attempt to shape eating habits. Instead, the company is ridiculed.

But Bittman and his anti-corporate allies insist that industry is the cause of obesity and can’t have a role in addressing the problem. In fact, activists including Michele Simon scoffed when the Healthy Weight Commitment Foundation, a coalition of large food and beverage companies announced a major reduction in calories sold. Now the industry group is funding a study by the City University of New York School of Public Health to assess the impact of the industry’s healthy community programs across the country. No doubt, opponents will show their true colors and scorn the privately-funded science.

The book identifies a number of heroes, including organic products, Whole Foods and Chipotle. No doubt the Mexican restaurant chain will earn high praise from Bittman for its dubious PR stunt announcing its food is now GMO-free even though the author clearly struggles with a position on GMOs. You get the sense he supports the biotechnology—but that would be anathema among his pals in the culinary elite—so he splits the baby by supporting labels on GMO food. (Chipotle’s anti-GMO campaign is a perfect example of how difficult and questionable any nationwide labeling effort would be.)

Bittman reserves praise for another important player in the fight against food: himself. He refers to himself as a “pioneer” of the food movement and boasts that people say to him, “You’ve helped me change my life.”

But make no mistake; Bittman’s battle plan puts little emphasis on people changing their own lives. To him, “personal responsibility” is a right-wing idea that’s been proven wrong. That’s why Bittman finds it necessary to slam the private sector while advocating for shifting more resources, control and power to government officials.  Unfortunately, Bittman’s ideas are the public policy equivalent to the negative attributes of fast food he decries; slickly marketed, bereft of substance, and over time, will lead to buyer’s remorse.

 

[Originally published at Pundicity]

Categories: On the Blog

Is The Global Left Counting on Pope to Split the Catholic Church Over Global Warming?

May 23, 2015, 3:01 PM

Pope Francis is expected to release an encyclical on the environment and human ecology that will most likely contradict the principles and politics of most conservative Catholics, particularly in the United States.

Might the global Left be counting on Pope Francis to help them split the Catholic Church? The Catholic Church has been around for over two thousand years and has survived many different battles — including the yoke of communist regimes in Catholic countries like Poland — but will it survive Pope Francis alignment with leftist movements?  Has the Left finally come out with a method that will destroy the power of the Church to cause further damage to an already weakened Church, having been busy for years preparing for this moment?  Not to be forgotten is the unholy alliance of international communism with the jihadi Islamists.

Just when the “Global Warming” or “Climate Change” movement is beginning to lose credibility in our society, the “believers” are finding support from an unsuspected source: The Catholic Church.  According to an article on the Daily Beast: “The encyclical isn’t even out yet and at least one climate-change-denying conservative group has claimed that the Pope has been misled and misinformed.”  What this writer calls a “climate change-denying conservative group is The Heartland Institute.

The Heartland Institute together with CFACT have for years provided the facts on the climate issue.  Thousands of scientists are on their side. See signatures on petition here. The Vatican authorities did not allow this organization’s representatives to participate.

Why not allow opposition to also be represented?  Interviewed in this article was Dr. Christiana Peppard, a “specialist” in environmental ethics who teaches in the theology department at Fordham University.  As the author of Just Water , and who with Pope Francis will offer the encyclical, Dr. Peppard declared that “viewed from the angle of consumptive impact, it would be super-developed countries like the U.S. that need to slow our reproductive rates in order to be proportionate consumers of the earth’s goods.”  Naturally, it is all about evil, selfish, capitalistic Americans!

Will Pope Francis agree that Americans need to bring down our reproductive rates?  How will this be accomplished when President Obama is encouraging ethnic groups who produce the most children to cross the border illegally and then be given amnesty, while also allowing mass immigration from Muslim countries, also well known for high birth rates.

Might this be the desired scenario?  The International Left, with help from Islamists, big business, NGOs, religious organizations, and unscrupulous billionaires like George Soros, will unite under the guidance of Alinsky’s “Rules for Radicals” to bring down the United States of America as a constitutional Republic, further replacing it with a totalitarian government that will redistribute our wealth to all parasitic governments in the world.  That, indeed, seems the ultimate goal of climate change promoters: to take over our wealth and destroy our middle class. Is this what the Pope really desires?

It is impossible to ascertain the reason the Pope is joining in this venture against the American people, but the Pope has at times been critical of the US for her wealth and capitalism without once mentioning her charity and compassion.  It is difficult to understand why the Pope, a man of God, would not even attempt to listen to those who oppose this issue, as if they didn’t count as human beings.  Instead, the Pope seems driven by a zealous political/social crusade.

Does Pope Francis not understand what happens to the poorest people in the world when energy availability is curtailed?  The poor are the ones who benefit the most from fossil fuels produced cheaply instead of the wood burning methods that brings them respiratory diseases.  The only people who benefit by curtailing fossil fuels are the multi-billionaires who have invested in “green technology” that is inefficient or who wish to monopolize energy sources, like Vladimir Putin.

The same wealthy globalists who have exploited our economies have also taken advantage of the scientific ignorance of our populations.  When was Science changed to a democratic vote by the majority?  The science that currently is taught in schools comes from politicians and the media reliance on junk science, like Al Gore’s movie, “An Inconvenient Truth.”

A large number of scientists have been skeptical about global warming for years, and with good reason.  CO2 levels on earth have in the past been four to eighteen times the current readings.  Global climate has warmed since the Little Ice Age (1400 to 1700 AD).  The first occurred between 1900 and 1945, and the second in 1975 until 1998, and then stopped and began falling again after reaching a high of 1.16ºF above the average global mean temperature. There hasn’t been any warming since then.  In addition, we must keep in mind that all the information from the IPCC reports (United Nations) comes from computer models.  The actual temperatures measured by both satellite data and independent balloon data show a near zero trend from 1979-1997.

How is it moral to deny cheap energy for the poorest people on earth so that the elitists can enjoy nature at their pleasure?  How is it moral for Christian teaching to place the earth above human beings?  “Genesis”  1:27-28:

“God created man in his image, in the divine image he created him; male and female he created them. God blessed them, saying:  Be fertile and multiply; fill the earth and subdue it.  Have dominion over the fish of the sea, the birds on the air, and all the living things that move on earth.”

Without cheap energy millions cannot provide food and clean water for their families.  Why should the poor in Africa have no right to the development that energy has brought to the West?  Reduction of carbon emissions would bring disaster to the poorest people on earth, the ones Christians are supposed to love.  A 50% reduction in CO2 emissions by 2050 would only reduce global average temperature in 2100 by an inconsequential 0.07C. Even an elimination of all CO2 emissions by the United States would prevent only 0.17C of warming.

Pope John Paul II was a major player in bringing down communist USSR.  He knew communism because he lived it.  May St. John Paul II be able to help save the Catholic Church from the errors and closed mind of Pope Francis by guiding Francis back to the mission of the Church, doing the will of God.

Categories: On the Blog

Heartland Daily Podcast – Michael Bastasch: Upcoming ICCC10 Panelist, Talking Energy Policy

May 22, 2015, 3:42 PM

In today’s edition of The Heartland Daily Podcast, Research Fellow Isaac Orr talks with The Daily Caller’s Michael Bastasch. Bastasch is going to be a panelist at the upcoming International Conference on Climate Change taking place in Washington D.C. on June 11 and 12. Bastasch and Orr discuss energy policy.

During the podcast, Bastasch and Orr touch on many topics including the climate change debate and renewable energy. Orr explains that his preference for oil and coal are based on renewable energy’s inability to compete at this time with fossil fuels. Bastasch explains that the time where renewable efficiencies equal that of fossil fuels may still be a ways off. Bastasch also gives a sneak peek as to the content of his presentation at ICCC10.

[Subscribe to the Heartland Daily Podcast for free at this link.]

Categories: On the Blog

Heartland Weekly: Global Warming Skeptic Embarrasses Environmental Defense Fund in TV Debate

May 22, 2015, 2:09 PM

If you don’t visit Somewhat Reasonable and the Heartlander digital magazine every day, you’re missing out on some of the best news and commentary on liberty and free markets you can find. But worry not, freedom lovers! The Heartland Weekly Email is here for you everyFridaywith a highlight show. Subscribe to the email today, and read this week’s edition below.

Why Does John Kerry Invest in Fossil Fuel Stocks?
Ron Arnold, The Daily Caller
John Kerry talks a good game about how we should all reduce our carbon footprint, but he doesn’t put his wife’s money where his mouth is. Kerry invests in at least 365 securities connected to fossil fuel industries.  Among the “sinners” in Kerry’s portfolio: ExxonMobil and a Canadian firm with ties to the Keystone XL pipeline. READ MORE

  

Obamacare Strains Emergency Rooms
Jim Waters, The Heartlander
Yet another Obamacare promise broken: Three-quarters of doctors responding to a nationwide survey conducted by the American College of Emergency Physicians indicate they have seen an increase in ER visits since Obamacare became law. READ MORE

  

Video – Heartland Friend Marc Morano Embarrasses the Environmental Defense Fund in TV Debate
Jim Lakely, Somewhat Reasonable
Carol Andress, director of legislative operations for the Environmental Defense Fund (EDF), was humiliated in a televised debate with CFACT’s Marc Morano. It is impossible to overstate what a blow-out this debate was for Morano. He was the Harlem Globetrotters to EDF’s Washington Generals.  READ MORE

 

Featured Podcast: Dr. Brad Rodu on FDA’s Missing Tobacco Data
Heartland Senior Fellow Dr. Brad Rodu urges the Food & Drug Administration to “show its work.” Rodu says the raw data of taxpayer-funded studies on tobacco use are being kept from the public. Meanwhile, government agencies selectively release sound-bites to media outlets and spin the story towards preferred narratives. LISTEN TO MORE

ORE

 

 

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No, Affordable Oil Will Not Cause A New Great Depression
James M. Taylor and Justin Haskins, Forbes
Fracking for oil and natural gas has created thousands of jobs in the United States. With those jobs come billions of dollars in government tax revenues and immeasurable U.S. economic benefits. What’s not to like? Democratic Party strategist Robert Weiner claims, implausibly, that America’s new energy boom will cause a new Great Depression. READ MORE

 

A New Threat to Privacy: Automated License-Plate Tracking
Jen Kuznicki, The Heartlander
“It’s alarming that one company said they gathered about three million records a day, scooping up info to sell to other companies and possibly the government,” said Melissa Ngo, privacy consultant and former senior counsel for the Electronic Privacy Information Center. “This is personal information about where you’ve been and where you’re likely go to, because most of us have set patterns for work, school, and home life.” READ MORE

 

How Google and Netflix Profit From FCC’s Net Neutrality Power Grab
Warner Todd Huston, The Heartlander
“Net neutrality is massive regulatory protectionism for government-crony businesses,” said Seton Motley, president of Less Government. “It outlaws charging bandwidth-hog companies for being bandwidth-hog companies, which means our Internet access prices skyrocket to augment the profits of companies like Google and Netflix.”  READ MORE

 

Bonus Podcast: Bruno Behrend on Common Core
Heartland Senior Fellow Bruno Behrend joins Dave Elswick to discuss the latest on Common Core. Behrend and Elswick talk about the popular perceptions of Common Core and public education, and why even more government control is not the solution to our educational problems.  LISTEN TO MORE

Obama Threatens States that Refuse to Expand Medicaid
Sean Parnell, The Heartlander
“The real scandal here is the citizens of states send their tax dollars to Washington, DC and the feds will only let them have their money back if they do what Washington wants them to do. It would be a great campaign theme for the various presidential candidates: The only tax money going to Washington should be for what the federal government needs to fulfill its limited, constitutional obligations.” READ MORE

RE

 

Why Government Deficits and Debt Matter
Richard Ebeling, Epic Times
CBO calculates that by 2025 “modest” annual budget deficits will add more than $7.5 trillion to the existing $18.3 trillion of federal government debt, for a total a decade from now of almost $26 trillion. This will be more than a 40 percent increase in the federal government’s debt over the coming ten-year period.  READ MORE

  Invest in the Future of Freedom! Are you considering 2015 gifts to your favorite charities? We hope The Heartland Institute is on your list. Preserving and expanding individual freedom is the surest way to advance many good and noble objectives, from feeding and clothing the poor to encouraging excellence and great achievement. Making charitable gifts to nonprofit organizations dedicated to individual freedom is the most highly leveraged investment a philanthropist can make. Click here to make a contribution online, or mail your gift to The Heartland Institute, One South Wacker Drive, Suite 2740, Chicago, IL 60606. To request a FREE wills guide or to get more information to plan your future please visit My Gift Legacy http://legacy.heartland.org/ or contact Gwen Carver at 312/377-4000 or by email at gcarver@heartland.org.  

 

Categories: On the Blog

Newly-Released Study Questions Administration’s Conclusions on Ozone

May 22, 2015, 1:56 PM

What if “global warming” actually improved ozone levels? A new study from the University of Houston, that collected information the impact of climate change on ozone at ground level, found that when the temperature was routinely higher than normal, in one of the most polluted cities in the country, the ground ozone levels were actually lower, because of other, more impactful side effects of natural climate change. The higher the land surface temperature, the researchers at the Institute for Climate and Atmospheric Science found, the higher the pressure gradients, which in turn increase offshore winds, which in turn contributed to more days with lower ground-level ozone levels.

This means, of course, that the Obama Administration’s and the EPA’s conclusion that global warming means more higher-ozone days is now in question. Okay – of course, it was always in question, since the conclusion was far from “settled science,” – but in this case, there’s empirical evidence that not only is global warming a phenomenon that could have positive natural impacts, but that the generally-accepted practice of limiting carbon emissions so as to limit land temperature levels so as to limit higher ozone days is flawed, at best. In fact, according to the ICA researchers, higher land temperatures could be responsible for cleaning up cluttered and carbon-choked coastal cities worldwide.

The White House is not likely to acknowledge these results. After all, they’ve claimed that global warming-caused inevitable higher ozone levels are responsible for everything from asthma to hurricanes to the rise in international terrorism. They’ve used such claims as an excuse to throttle industry, including electricity-producing coal plants, and to circumvent the free market, insisting that untested alternative energy sources, not supported by the free market, should receive billions in taxpayer subsidies. After all, they’ve already claimed that such measures will actually reduce global warming, too, and such a conclusion is clearly in question. It’s far from likely that they’ll abandon the “settled science” in order to take a clearer, more comprehensive, fact-based view of climate change and how it truly impacts the human population.

Categories: On the Blog