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The Policy and Commentary Blog of The Heartland Institute
Updated: 58 min 32 sec ago

National Security, The Seattle Oil Rig, And Greenpeace’s Dirty Money

1 hour 11 min ago

President Obama had it all wrong in his commencement address at the U.S. Coast Guard Academy in New London, Connecticut. He warned that climate change “deniers” endanger our national security – denying “undermines the readiness of our forces,” he said.

In fact, climate change believers are the threat to our national security, such as the recently notorious Seattle mob of Greenpeace “kayaktivists” paddling around Puget Sound trying to stop Polar Pioneer, Shell Oil’s Arctic drilling rig, from making a layover at the Port of Seattle to gear up for Alaskan waters. When thwarted by the Coast Guard’s 500-foot no-approach cordon, the Greenpeace canoe crowd left the harbor and took to the streets, where they blocked suppliers’ access to the rig until city police dispersed them.

These angry picketers are the threat. They undermine America’s share of the Arctic Ocean’s estimated 30 percent of the world’s undiscovered natural gas and 13 percent of its oil reserves. That fuel will move the military as well as civilians.

How do slogan shouters endanger America’s national security when their targets are civilian oil rigs? Shell’s rigs will draw needed attention to the Chukchi and Beaufort Seas in an ocean filling with Russia’s growing Arctic supremacy. This month, Defense Secretary Ashton Carter told a Senate appropriations committee hearing the U.S. military Arctic defense policy is falling short.

The United States lacks ships able to operate in or near Arctic ice, with only two medium icebreakers, one nearly a decade past pull date. Russia, by contrast, has 40 big icecap-crunchers, 25 of them nuclear-powered, including one battleship-size beast ominously named 50 Years of Victory (but it takes tourists to the North Pole for 15 day cruises at $30,000 and up). Our entire Alaskan Arctic coast has no U.S. military base, not one. Russian jets make nearly monthly incursions to the Air Defense Identification Zones off the coast of Alaska. Interceptors have to fly to the north coast from Eielson Air Force Base near Fairbanks (500 miles) or all the way from Elemendorf AFB in Anchorage (725 miles).

President Putin strategically laid claim to great swaths of Arctic oil and gas with deployed rigs, has activated the Northern Fleet – two-thirds of the entire Russian Navy – as a strategic military command, and assigned a 6,000-soldier Russian Arctic warfare unit to the archipelago of Novaya Zemlya with next-generation fighter aircraft in addition to advanced S400 Triumf anti-aircraft systems. An Arctic military reconnaissance drone base 420 miles off mainland Alaska is operational.

President Obama seemed to have adopted the Greenpeace strategy of roll over and play dead in February when he stripped Alaska of vast stores of its oil and gas wealth by reducing offshore drilling and declared most of the 19.6-million-acre Arctic National Wildlife Refuge off-limits to oil production. Yet his administration approved a conditional permit for Shell’s Arctic oil exploration.

The United States “may be 40 years behind,” Alaska’s Senator Lisa Murkowski said to Defense Secretary Carter. The U.S. Northern Command has a report due this spring, expected to militarize the existing 2013 National Strategy for the Arctic Region. According to the strategy, as reported by Foreign Policy Journal, “the Navy’s role will primarily be in support of search and rescue, law enforcement, and civil support operations.” Shell’s oil rigs provide peaceful reasons for our warships and planes to patrol the Arctic in counterbalance to Russia. Carter told Murkowski, “The Arctic is going to be a major area of importance to the United States strategically and economically to the future [sic].”

Research by the Chicago-area Heartland Institute found a secret beneath Greenpeace’s anti-oil ruckus: it is funded by oil-drenched millions from investments in ExxonMobil, Chevron, PetroChina, and dozens more, ironically including shares of Royal Dutch Shell, owner of the rig docked in Seattle.

According to Foundation Search, the top Greenpeace donor is the leftist-run David and Lucile Packard Foundation, paying them a total of $2,146,690 since 2000. Managers of the late electronics mogul’s foundation boast 2013 assets of $6.9 billion and have invested working capital in Anadarko Petroleum, Apache Corporation, Arch Coal, Carrizo Oil and Gas, Chevron, ConocoPhilips, Devon Energy, Duke Energy, ExxonMobil, Marathon Oil, Occidental Petroleum, Phillips66, Questar, Tesoro, Valero Energy, and World Fuel Service (a defendant in lawsuits over the 2013 oil train explosion in Lac-Mégantic, Quebec that killed 47 people), and many others—and paid Greenpeace from the profits.

The second-ranked Greenpeace donor is the left-funding Arcus Foundation, at $1,055,651 since 2007. The foundation of ultra-green billionaire Jon Stryker, Arcus’ 2013 assets totaled $169,472,585, with working capital injected into China Petroleum, ExxonMobil, PetroChina, Royal Dutch Shell, and TransCanada (the “tar” sands pipeline company)—and paid Greenpeace from the profits.

The list of foundations giving Greenpeace oil profits goes on and on, and Greenpeace goes on and on hypocritically taking oil profits to undermine America’s real energy future. This cabal could redeem itself instantly: they could just stop using any fossil fuels right now.

[Originally published at the Daily Caller]

Categories: On the Blog

Leaving the Church of Environmentalism

1 hour 29 min ago

In March 2009 while the Environmental Protection Agency was rushing to fulfill a presidential campaign pledge to document that carbon dioxide (CO2) and five other greenhouse gases endangered public health and the environment, a longtime employee, Alan Carlin, put out a 93-page report challenging the science being cited and the drift of the agency from its initial role to one captured by fanatical activists and alarmists, treating environmentalism more as a religion than based in science.

At the time Carlin was a 72-year-old analyst and economist who, as The New York Times put it, “had labored in obscurity in a little-known office at the Environmental Protection Agency since the Nixon administration.” His EPA career would span 38 years.

The website for his new book,“Environmentalism Gone Mad” says, “Dr. Alan Carlin is an economist and physical scientist with degrees from Caltech and MIT and publications in both economics and climate/energy, who became actively involved in the Sierra Club in the 1960s as an activist and Chapter Chairman. This led to a career as a manager and senior analyst at the Environmental Protection Agency.”

As he says in the preface “The purpose of this book is to explain why I changed from my lifelong support of the environmental movement to extreme skepticism concern their current primary objective of reducing emissions of carbon dioxide.”

“Although I and the many other climate skeptics are now referred to as ‘deniers’ by the climate alarmists, that does not change the science—and there is no valid scientific basis for the alarmists’ catastrophic climate predictions—or justify their fantastically expensive and useless ‘solution.’”

Carlin went from being a dedicated environmentalist, based on its initial philosophy of conservation, to an observer of the movement that was taken over and distorted to advocate falsehoods about global warming and a transition from fossil-fuels to “clean energy” meaning wind, solar and bio-fuels. As an economist he understood how absurd it was to suggest rejecting fossil-fuels, the key element of modern industry and society.

“The climate alarmists,” says Carlin, “have now been making their apocalyptic predictions for almost thirty years and it is now possible to compare their predictions with actual physical observations.”  Suffice to say all the predictions of a significantly higher temperature—the warming—have been wrong.

In fact, the Earth has been in a natural cooling cycle since 1998 and shows no indication of warming

Predictions about the North and South Poles melting, a major rise in ocean levels, increased hurricanes and other climate events have been wrong along with countless other climate-related apocalyptic predictions.

Having observed how the EPA has functioned for more than three decades, Carlin warns that its current “environmental policy has been hijacked by radicals intent on imposing their ideology by government fiat on the rest of us whether we like it or not…If environmental policy is based on government fiat or ‘green’ policy prescriptions the results have been and are very likely to continue to be disastrous.”

At 625 pages, Carlin’s book takes the reader from his early days as a Sierra Club activist and chapter leader to being an EPA outcast, denounced for telling the truth about the false claims of global warming, climate change, and what is now being called extreme weather.

As an economist, Carlin is particularly upset that “the Obama Administration’s climate/energy policy is wasting very large sums on non-solutions to minor or non-problems.”  The book has come along as President Obama has been flogging “climate change” as the greatest threat to the nation and the world.

“It has been long recognized that weather is chaotic,” says Carlin. While we operate within the four seasons, the weather that occurs can only be predicted in the most general terms. Suggesting that humans actually have any effect on the weather is absurd.

That is why the predictions made by the UN’s Intergovernmental Panel on Climate Change and all the others based on computer models are, by definition, worthless. Computer models cannot predict anything about the vast chaotic global climate system. Even today, meteorologists are mystified by the actions of clouds which can form and disappear in minutes.

It’s useful to keep in mind that climate is measured in centuries, while the weather is reported as what is occurring today and forecast, at best, for no more than a week. Weather records are maintained for purposes of comparison and within the larger context of determining the Earth’s climate cycles. Like those in the past, the present cooling cycle is based on a comparable one of the Sun that is producing lower levels of radiation. You don’t need a Ph.D. in meteorology to understand this.

Carlin does not hesitate to excoriate the blather put forth by the alarmists; particularly their claims that the weather is affected in any significant fashion by human activity and development in particular. “There is simply no evidence thus far that the normal activities of man have or will result in catastrophic outcomes for either man or nature.”

The actions the alarmists call for do nothing to enhance and benefit our lives. They drive up the cost of energy and food. They ignore how dependent modern life is on the use of fossil fuels.

“Despite all the lavish funding by liberal foundations and the federal government on their global warming doctrine-inspired programs, the radical environmental movement has long since gone so far beyond rationality that it is counter-productive in achieving its own ends.”

So long as it remains heavily funded and backed by the federal government, we must, like Carlin, speak out against environmental extremism. We must elect new people to govern in a more realistic, science-based fashion. We must urge our current legislators to rein in the rogue Environmental Protection Agency.

[Originally published at Warning Signs]

Categories: On the Blog

The EPA Claims Control Over Puddles

2 hours 47 min ago

Yesterday, the EPA, together with the U.S. Army Corps of Engineers announced changes to the existing “navigable waterways” rule, adding a variety of bodies of water to their existing regulatory purview. The rule change, they claim, amounts to a mere 3% increase in the territory they control and can enforce the Clean Water Act over.

But while the amount of land the EPA is claiming territorial rule over is concerning, it’s the type of “navigable waterways” they now believe are under their control. In addition to the lakes, rivers, tributaries and bays that an average American might recognize as a navigable waterway, the EPA seems to be asserting its charge over basically every body of standing water in existence, including drainage ditches, overflow reservoirs, and, yes, those potholes in your street that fill up with water every time it rains just a little.

The Obama administration issued a rule on Wednesday increasing the number of small bodies of water and wetlands that fall under federal protection, a move that has riled some lawmakers, business executives and farmers who say the rule unnecessarily expands federal bureaucracy.

The rule, issued jointly by the Environmental Protection Agency and the U.S. Army Corps of Engineers, is estimated to put about 3% more waterways throughout the U.S. under new federal jurisdiction, which will require more permits for use of those waters and could restrict access altogether, according to the EPA. Agency officials said Wednesday that the rule will protect drinking water supplies for more than 100 million Americans.

The EPA has already noted that the “small bodies of water” include anything that looks, smells or behaves like a wetland, including, but not limited to “prairie potholes.” In clarifying its statements, the EPA hasn’t done much to dispel the notion that they will use the power to radically redefine their own regulatory boundaries, stating that “the rule will seek to protect only waterways that have physical features of flowing water” (according to a fact sheet found by the Wall Street Journal, linked above).” Heaven help the landowner of a trickling sewer drain that runs a bit downhill.

According to the American Energy Alliance, which is monitoring the impact of EPA regulations on America’s energy producers, the rule is a blatant attempt to interfere with private property rights, specifically those of energy producers, who may have ersatz “wetlands” on their properties, or who may create loosely-defined “navigable waterways” by creating drainage ditches or runoff collection reservoirs on their property to handle potential byproducts of the production process. Although these waters would be contained on private property, and don’t necessarily connect with any water that Americans use for drinking or bathing, the EPA wants to allow itself the right to inspect and, likely, punish producers for the “dirty water” – even if it’s just an oversized puddle in a parking lot.

The EPA has tried this before, only to run up against the Supreme Court. As Heartland’s own James Taylor noted in Environment and Climate News, when these EPA first proposed the rules last summer, they did so in open violation of and in challenge to the Supreme Court’s clear directives – that the EPA rules as they were were already an overreach. And now, they’ve expanded even that.

Congress looks to be skeptical about the EPA’s claim that they’re just concerned about our clean water, so there’s opportunity to remain hopeful. In the meantime, keep your puddles clean.

Categories: On the Blog

How FCC Hurt Its Title II Anti-Stay Case

4 hours 33 min ago

The FCC’s latest legal brief opposing a stay of its Open Internet Order, hurt its legal case more than it helped.

The FCC brief unwittingly: exposed a glaring internal inconsistency with the FCC’s Open Internet Order; spotlighted its arbitrary and capricious decision-making; and exposed a big mistake in its legal strategy.

If the D.C. Circuit Court of Appeals panel rules on the legal merits of the industry’s petition, it remains very likely they will grant a partial stay of the Title II reclassification part of the FCC’s Open Internet Order.

However, the FCC remains very confident that a majority of the court will overlook the multiple serious legal infirmities in the FCC’s Title II case and deny a stay based on sweeping legal deference to the FCC and political deference to President Obama’s public position for the FCC to reclassify the Internet as Title II telecommunications.

Thus this stay decision, and the ultimate judicial resolution of this case, potentially by the Supreme Court, could prove to be a test of American rule of law.

  • [Note: This analysis provides only the new and latest legal problems with the FCC’s order based on the FCC’s latest brief countering the industry’s petition for a partial stay of the Open Internet Order. For more on the multiple serious legal infirmities of the FCC’s legal case see PrecursorBlog posts:  5-14-155-4-153-16-15, and 3-2-15.]

Ironically, the FCC’s brief claims up front that the “petitioners’ stay motion is not what it seems.”

Given the FCC’s invitation to explore that line of inquiry, let’s consider three big ways the FCC’s own argument “is not what it seems.”

1.  The FCC brief exposes a glaring internal inconsistency with the FCC’s Order.

On pages 11-12 of the brief, the FCC says it forbore from “the large majority of Title II’s provisions…” and “this established “a light-touch regulatory framework,” thereby “minimizing the burdens on broadband providers while still adequately protecting the public…”

Thus the FCC admits in its brief, and in its Order, that the FCC Order does impose “burdens” on broadband providers, and it also admitted it chose to keep some of the “burdens,” like sections 201 and 202, to protect the public.

The simplest of cursory review of Title II by the court will show that the FCC retained the provisions with the most burdens, i.e. sections 201 and 202 powers, upon which the remainder of Title II rests.

Now on pages 2 and 24 of the FCC’s brief, the FCC summarily dismisses any legal harm (burden) on broadband providers in summarily asserting: “each alleged harm is speculative or insubstantial.”

How can the FCC’s sweeping denial of any harm in their brief square with the FCC’s detailed discussion in their Order of the need for the FCC to be “minimizing the burdens on broadband providers while still adequately protecting the public?”

Simply, why did the FCC need to forbear from Title II at all, if even the most burdensome Title II provisions, from which the FCC chose to not forbear, implicitly represent at best “speculative or insubstantial” harms to broadband providers?

The FCC can’t have it both ways.

Either Title II has actual harms/burdens on broadband providers as it made clear in the Order: “minimizing the burdens on broadband providers,” or it has no harms to broadband providers as it said it its stay brief: “each alleged harm is speculative and insubstantial.”

2.  The FCC brief spotlights the FCC’s arbitrary and capricious decision making.

Just like the FCC arbitrarily and capriciously denies any harm from Title II at all, the FCC brief also arbitrarily and capriciously dismisses the existence of any reliance interests for broadband providers, suppliers, or investors by summarily dismissing them as “alleged reliance interests.” [page 18]

Let the magnitude of the FCC’s caprice here set in: “alleged reliance interests.

The FCC brief denies that broadband providers, other Internet businesses, and private investors — who have invested upwards of a trillion dollars over the last decade relying on the law, Supreme Court precedent and multiple FCC precedents classifying all broadband infrastructures: cable, DSL, wireless and power-lines, as Title I services, not Title II utility rate regulated services — have no reliance interests requiring “substantial justification” to overcome.

Just like the FCC summarily dismissed that the un-forborne parts of Title II — like sections 201 and 202 that subject common carriers to sweeping rate regulation obligations — pose no “burdens” on broadband providers, the FCC is summarily asserting that imposing sections 201 and 202 implicates no reliance interests.

It is the quintessence of arbitrary and capricious behavior, when the FCC essentially can’t/won’t acknowledge before the court that the interests which maximally relied upon FCC’s settled precedent have no reliance interests at all, let alone reliance interests warranting “substantial justification” to overturn.

To paraphrase a famous line in an old infamous movie, the FCC is effectively saying to broadband providers: “You screwed up; you trusted us.”

3.  The FCC brief exposed a big mistake in its legal strategy.

Apparently the FCC remains confounded that broadband providers have only challenged the FCC’s Title II reclassification (and the conduct standard) and have not challenged the FCC’s section 706 authority or the FCC’s bright-line net neutrality rules banning blocking, throttling and paid prioritization.

It’s pretty obvious from reading the FCC Open Internet Order that it never occurred to the FCC that a legal challenge would concede section 706 and the bright line net neutrality rules, and then isolate Title II for legal challenge.

That’s because the clear backbone of the FCC’s integrated legal defense in the Order and in its stay brief is the Verizon v. FCC decision. Tellingly, the FCC brief cites Verizon v. FCC as much as it cites the Supreme Court’s Brand X decision.

Obviously the FCC likes the Verizon Court’s affirmation of the FCC’s section 706 authority and many of the FCC’s market findings/assumptions in its 2010 Open Internet Order that the court otherwise overturned.

The FCC’s apparent failure to anticipate a Title II-only challenge now has the FCC having to de facto assume and imply to the court that its section 706 and Title II authorities are somehow inseverable, when they are completely separate legally.

This big awkward FCC mistake in legal strategy has resulted in an FCC defense that may be inappropriately, too-heavily-reliant on Verizon v. FCC, which is a much more of section 706 relevant precedent that a straight Title II classification relevant precedent, like the Supreme Court’s Brand X decision which was solely focused on FCC classification.

Importantly, both the FCC and industry did not brief the Verizon v. FCC court about the legality of reclassifying broadband as a Title II service, after the FCC repeatedly found the facts and law warranted an information services classification. That’s because the FCC asserted 706 authority, and did not assert Title II common carrier authority to promulgate its 2010 net neutrality rules.

Simply, to this court, reclassifying broadband as a telecommunications service, after a decade of being legally classified as an information service, is a new legal question that Verizon v. FCC did not rule on.

This is a big problem for the FCC’s case for a variety of strong reasons.

The 1996 Telecommunications Act made Title I information services and Title II common carrier telecommunications services mutually exclusive legal classifications.

Not only are Section 706 & and Title II part of different legal titles, they are from different laws; the 1996 Telecommunications Act versus the 1934 Communications Act.

They are even opposite legal models in that section 706 is situational, conditional, targeted and reactive while Title II is ex ante and comprehensive.

Ironically, the main similarity of section 706 and Title II is that the FCC has now asserted unlimited authority to regulate the Internet under both Section 706 and Title II.

The FCC’s big legal mistake here is that the FCC effectively argues Verizon v. FCC is a major Title II, classification-relevant precedent, when it is a really a very different section 706, net neutrality precedent.

In sum, for the FCC to ultimately prevail on reclassifying broadband as a telecommunications service the D.C. Court of Appeals and the Supreme Court ultimately must confer near carte blanche deference on the FCC.

[Originally published at Precursor Blog]

Categories: On the Blog

Schweikart Reviews Overdue Account of America’s True History

May 27, 2015, 3:29 PM

The final Heartland Author Series event before The Heartland Institute moves its headquarters from One South Wacker Drive, #2740, to its new facility in Arlington Heights was held on Thursday, May 21, from 11:30 a.m. to 1:30 p.m.  Featured was Larry Schweikart, who along with co-author Michael Allen, wrote the newly released 10th anniversary edition of “A Patriot’s History of the United States: From Columbus’s Great Discovery to America’s Age of Entitlement.”

It is irrefutable that during past three decades, many history professors have allowed their biases to distort the way America’s past is taught. These intellectuals have searched for instances of racism, sexism, and bigotry in our history while downplaying the greatness of America’s patriots and the achievements of dead white men.

As a result, more emphasis is placed on Harriet Tubman than on George Washington; more about the internment of Japanese Americans during World War II than about D-Day or Iwo Jima; more on the dangers we faced from Joseph McCarthy than those we faced from Josef Stalin.  


A Patriot’s History of the United States corrects doctrinaire biases. Instead, America’s discovery, founding, and development are reexamined with an appreciation for the elements of public virtue, personal liberty, and private property that make this nation uniquely successful.  Offering a long-overdue acknowledgment of America’s true and proud history, Schweikart and Allen tell their story from the time of Columbus’s voyage to Obamacare. The authors don’t ignore America’s mistakes through the years, but they put them back in their proper perspective while celebrating the strengths of the men and women who cleared the wilderness, abolished slavery, and rid the world of fascism and communism. 

Introduction of Larry Schweikart

Joe Morris, as a long-time friend and supporter of The Heartland Institute, and in his assigned role to introduce speaker Larry Schweikart, pointed out what he called “Exhibit A” for homeschooling. Morris acknowledged four home-schooled young ladies in attendance at the Heartland event who were eager to hear and meet their history teacher in person, having used “A Patriot’s History of the United States” as their high school history textbook. The girls are being schooled under Classical Conversation.com, a Christian home-school K-12 program.  60,000 children are enrolled in this program.

In praising Larry Schweikart, a history professor at the University of Dayton, for his ability to connect with the American people, Morris suggested four other current authors who can be trusted and who are likewise accessible to the American people:  Doris Kearns GodwinMichael BeschlossDavid McCullough, and Paul Johnson.

Describing Larry Schweikart as one who earned his stripes in the academic world, Joe Morris spoke of Schweikart as being knowledgeable about trends in history and how history is made.  As a drummer in a REAL rock band before his love of history drew Schweikart back to the world of academia, Morris explained  how Schweikart understood the connection between the fall of the Berlin Wall and the love of rock music by anti-Communist young people behind the Iron Curtain.  Despite living under a highly regulated government system, young people could perform rock music in a group situation without permission from government to experience freedom and innovation in what was a highly regimented society.  Young people could pretend they were Americans!  It took President Ronald Reagan to grasp something special between rock music and freedom.

Since 2009 Schweikart has been a film producer.  His documentary, “Rockin’ the Wall,” about rock music’s part in bringing down the Iron Curtain, has appeared on PBS.  See here a short clip of the documentary.  Schweikart’s current project, “Other Walls 2 Fall,” featuring Yanni, Clint Black, Busta Rhymes, and a heavy metal band from inside Tehran, is nearly finished.  Also noteworthy is that Schweikart is presently writing a biography of Ronald Reagan.

Schweikart elaborates about the how, when and why of his book

Larry Schweikart had an interesting and unusual tale to tell of how “A Patriot’s History” evolved out of an earlier published book dealing with the history of American business, “The Entrepreneurial Adventure.”  Wishing to write an inclusive textbook that dealt accurately and fairly with the history of this nation, a substantial revision was called for.  A history book that irked Schweikart was “A People’s History of the United States” by revisionist historian Howard Zinn.  Zinn’s biased history, published in 1980, is still selling thousands of copies a year. Many of those copies are assigned readings for courses in colleges and high schools taught by leftist disciples of their radical mentor.

Essential to the planned revision was the inclusion of free market ideas.  In due time a 1,700 page manuscript was presented to several publishers under the title, “Cup of Hope”, but only Penguin was interested. But first off the title had to go.  Also frowned upon was the number of pages. 1,100 pages were initially chopped, but the manuscript was still considered too long.  A further chopping of pages was mandated, which eliminated all maps, enabled the book to reach the magic number of 948 pages and made a $25.00 selling price possible.

A Patriot’s History of the United States by Larry Schweikart and co-authored by  Michael Allen, was first published as a Sentinel Book by Penguin in 2004.  As Schweikart tells it, although the book was modestly successful — “The Wall Street Journal” had a positive review and Rush Limbaugh likewise praised it — everything changed six years later. In 2010 Schweikart made a guest appearance on Glenn Beck’s program on Fox News, which back in 2010 reached a viewing audience of 3.5 million.  After Schweikart’s appearance he received an apology call from Beck, with Beck confessing that he had not read Schweikart’s book before the interview.  Upon reading Schweikart’s book over the weekend that followed, Beck found it to be most enjoyable.  What a surprise Schweikart had when tuning in to Beck’s next show!  Glenn Beck was discussing “A Patriot’s History” at length, brandishing the book in front of the camera complete with highlights and sticky notes, and asking that his viewers read it “like George Foreman selling a grill on an infomercial.”

“A Patriot’s History” suddenly skyrocketed up the bestseller lists. Schweikart recalled how his publisher would call him and say things like “We’re going to be on the New York Times bestseller list!” or “We’re going to be in the top 10 on the New York Times bestseller list!”  Responding in a nonchalant way Schweikart would reply, “Oh, that’s nice.”

Finally Schweikart received a call that the book had reached #1 on the “New York Times” bestseller list.  Schweikart, although amused by the popping corks he heard in the background, responded as he always did to his publisher’s call, without marked enthusiasm for the achievement.  Incredulous at Schweikart’s response his  publisher replied, “Don’t you understand what this means?  It’s going to be in Walmart!” The latter was great news for Schweikart, for he had finally succeeded in writing a history book that would be read by average Americans, rather than by academics or elites.

The new 10th Anniversary Edition of “A Patriot’s History” published November 25, 2014, goes through 2013 and President Obama’s first term.  Included is a thorough examination of the George W. Bush presidency.  Obama did not receive good marks.  As remarked Larry Schweikart, “Jimmy Carter finally has somebody worse than himself and Millard Fillmore.”

Although “A Patriot’s History” is considered a trade book rather than a text book, the book is being used at 30 different universities and colleges, among them Rice and TCU.  It is the required textbook at the University of Mississippi.

Schweikart offers reasons for America’s greatness

In closing Schweikart offered his take as to why this nation has been successful:

1.  It has a Christian, mostly Protestant Foundation.

2.  There is the presence of English Common Law, which was brought by settlers from England to the colonies. In colonial day benign neglect told governors what to do.  Common law will not allow Obama to become a tyrant.  It was because of Common Law that Congress was unable to pass the Senate’s immigration bill.  The American people overrode Congress.

3. A free market system exists.

4. Written documents and deeds are issued for property.

Spotlighting The Heartland Institute

Jim Lakely, Director of Communications at The Heartland Institute, presented these announcement:

  • Known for the environment, The Heartland Institute received immense media coverage from its trip to Rome to challenge a proposed Vatican encyclical by Pope Francis about the threat of man-made global warming.  Heartland’s message:  that the UN is not the only word on the environment.  Heartland proudly wears its reputation as a climate skeptic as a badge of honor.  See here an account of Heartland trip to Rome.
  •  The 10th International Conference on Climate Change (ICCC-10) will be held in Washington, D.C. on June 11 – 12.  “Fresh Start” is the Conference theme.  Check this site for information.
  • Freedom will soon have a new home in Arlington Heights.  The Heartland Institute is moving at the end of May after 31 years of renting office space in downtown Chicago

Among the many distinguished guests attending Heartland’s May 21 book event was Tony Mockus  and his wife Mary Lou.  Tony is a friend of Heartland and a distinguished actor known for The Untouchables (1987), Backdraft (1991) and Caddyshack II (1988).

 

[Originally published at Illinois Review]

Categories: On the Blog

Analysts Foresee ‘Death Spiral’ for Obamacare

May 27, 2015, 3:19 PM

A new national policy analysis forecasts a fast-approaching “death spiral” for Obamacare, as catastrophic losses from the health insurance program mount even more quickly than experts expected.

“Pundits like Paul Krugman saw the tiny premium increases for the second year of the exchange and concluded that predictions of the death spiral were wrong,” said Dr. David Hogberg, senior fellow at the National Center for Public Policy Research, Washington D.C.,  and author of the paper, The Obamacare Death Spiral Rears Its Head. “But there is no rule saying that because a death spiral doesn’t happen in the first year it isn’t going to happen.”

Obamacare’s “risk corridors” encouraged health insurance companies to keep premium increases artificially low initially.

“The risk corridors were going to use taxpayer money to cover a larger portion of the losses than any insurer incurred on the exchanges,” said Dr. Hogberg. “That would relieve them of any need to hike premiums in order to cover larger than expected medical claims.”

But in last year’s budget Republicans stopped any taxpayer money from being used to finance the risk corridors. “Now that insurers don’t have access to that money, they have little alternative but to hike premiums if they incurred losses on the exchanges,” said Hogberg. “And given some of the premium hikes they are requesting for 2016, it’s pretty obvious that they had big losses.”

Hence, according to the study:
• Five insurance companies on Oregon’s health insurance exchange are proposing “average” premium increases ranging from 25.6 percent to 52 percent.

• In Tennessee, Blue Cross/Blue Shield is asking for an average increase of 36.6 percent and Community Health Alliance is proposing a 32.6 percent increase.

• In New Mexico, Health Care Service Corp. is requesting a premium hike of 51.6 percent.
“Once premiums go up like this, you’ll see younger and healthier people begin to drop out, leaving the insurance risk pool older and sicker and even more expensive to cover. Then premiums will increase again, and the process repeats,” says Dr. Hogberg.

Categories: On the Blog

Heartland Daily Podcast – Heather Kays: Lindsay Lohan, Cell Phones and Other Education Topics

May 27, 2015, 3:04 PM

In today’s edition of The Heartland Daily Podcast, we listen in as Research Fellow Heather Kays appears on the “Freedom Works Show” on Tantalk1340 in Florida with host Paul Molloy. Kays was on to talk about the latest news in America’s education system.

In the segment Kays and Molloy discuss many recent topics that pertain to education. Among these topics, Kays and Molloy talk about parent reactions to actress Lindsay Lohan serving community service in a preschool, whether or not cell phones should be completely banned in schools, teacher evaluations in Florida, and school choice in Montana.

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

Categories: On the Blog

“Blended Learning” Could Be an Answer for America’s Education Woes

May 27, 2015, 1:33 PM

Bruno Behrend, a senior Fellow for Education Policy at The Heartland Institute in Chicago, was one of the featured speakers on Friday, May 15 at the two-day Amplify School Choice conference held in Chicago, organized by Josh Kaib, Assistant Editor of Watchdog Arena, a project of the Franklin Center, located in Alexandria, Virginia.

Behrend gave his unconditional support for “blended learning,” a formal education program in which a student learns at least in part through the delivery of content and instruction via digital and online media. Through blended learning there is some element of student control over time, place, path, or pace of learning. Blended learning can be effective in traditional “brick-and-mortar” public school when face-to-face classroom methods are combined with computer-mediated activities.

Touted by Behrend was Khan Academy, an all-digital learning site where students can learn at their own pace. Khan Academy is already being used in public schools by students to complete homework assignments. The Khan Academy Internet page states:”You only have to know one thing:  You can learn anything.  It’s Free.  For everyone. Forever.”

As an example of blended learning, Behrend spoke of a happening in Ethiopia where it took only five months after the installation of computer software for students to learn English without the help of a teacher. Digital learning allows children to learn lots of different things at their own pace, enabling them to learn more when relying on their own ingenuity and curiosity, than when told what to expect from any given situation.

Behrend believes the battle for school choice is in danger of being lost. As stated by Behrend: “It’s difficult to beat a failing system if the support level for the status quo system is above 50%.”

In referring to an incumbent school district as a district’s own system, taxpayers must understand that their existing or incumbent educational system “sucks,” he said, a difficult task because of the propensity of trained school official to misrepresent the facts. Above all, Behrend cautioned not to attack teachers, but to instead attack unions when talking about school choice.

He noted these important benefits of school choice:

  • Better education.
  • More parental support and control.
  • Less expensive/More money for learning, not bureaucracy.
  • Less government propaganda/indoctrination.
  • More freedom.
  • More diversity.

The U.S. keeps spending more and more on education, but the results aren’t apparent. While the average national per student spending on education is about $12,000, 80% of the expenses incurred by a school district involve teacher and administrative salaries and pensions obligations.

In Illinois, the average teacher salary is $74,000, while the average superintendent makes $124,000.  These salaries, however, pale in comparison to teacher and superintendent salaries received by those employed in the upscale and wealthy school districts located in northern Illinois, where it’s not uncommon for high school teacher to have a base salary of $115,000.

In commenting about vouchers, Behrend placed a voucher program above that of a charter school.  Nevertheless, children in both instances perform better than had been the norm in the replaced schools.

It was not at all surprising when Behrend cited home schooling as the best form of school choice.

Behrend cautioned against using the term “voucher” because of the bad vibes associated with the word by those who insist, among other reasons, that vouchers drain school districts of dollars.  So as not to lose the voucher fight, Behrend called for a rehabilitation of the word.  Bruno suggested redefining vouchers by calling them “Opportunity Scholarships”, favoring that the money follow the child directly to the provider such as in  Education Savings Accounts. This method provides children with a much broader variety of education.  It is then possible for parents and students to select from providers that offer every imaginable learning system, from the traditional school to online-schools beaming content to computers on demand.

In speaking convincingly about difference forms of school choice, Behrend didn’t mince words when stating that “the Government Education Complex must be killed as it doesn’t represent the interests of the children, parents, or the taxpayers. It has outlived its usefulness. Stop trying to fix it.”

Continuing, Behrend noted that the future is already here, although not yet evenly distributed, with a transformation taking place from the 19th century Government Education Complex to a 21st Open Source Learning Network.

With a 21st century network educational system that incorporates blended learning, schools can offer programs that will radically change education for the better, essential to improving this nation’s generally low education scores in comparison to other nations.  Even when employing incremental steps in education reform, regular evaluations must be conducted to ascertain whether a given reform will actually lead to real transformation.  Granted, teacher unions will fight tooth and nail to prevent meaningful school reform from happening.

The following argument position was shared by Behrend as a way to bring individuals around to considering and hopefully accepting school choice:  “Do you really wish to fund the system itself instead of the children?”

He described Common Core as the “last dying gasp of centralization.”  Killing centralization requires undermining the premises of the entire education system that has been accepted since 1840.  It won’t be easy, but since centralization is already unpopular, winning the debate will be easier than it appears to be. Through offering school choice to parent and children, it will soon become apparent how choice is a much better option for children.

Is it fair that good education is available for the lucky few, while the unlucky remainder get stuck in America’s under performing schools which Bruno calls “urban drop-out factories”?   School choice could change the present, unacceptable situation.

Another conference speaker, Ted Dabrowski of the Illinois Policy Institute’s presentation was featured on Illinois Review earlier this week. In “Thorner:  Vouchers in Waukegan?  It’s a real possibility” special attention was directed at Dabrowski’s account of his grassroots voucher program in the depressed city of Waukegan, Illinois — in association with the IPI — to give poor and illegal immigrant children a chance to succeed as an alternative to remaining in a failed school system.

[Originally published at Illinois Review]

 

Categories: On the Blog

Barack “Climate Change” Obama

May 27, 2015, 9:14 AM

“Woe to the land that’s governed by a child.”  – Shakespeare, Richard III

I have been wrestling for some kind of explanation why the President of the United States, Barack Obama, would continue to talk about climate change and urge the global transition from fossil fuels to wind, solar and bio-energy. I have concluded that he thinks everyone, not just Americans, are idiots.

We know he lies about everything, but these two topics are clearly near and dear to his heart.

My friend, Paul Driessen, is a policy analyst for the Committee for a Constructive Tomorrow, a free market think tank. Among the pundit class he’s ranked very high by his colleagues. Here’s what he has to say about climate change:

“Earth climate always has changed, is always changing, and always will change—but not from fossil-fuel use. Solar fluctuations, deep ocean circulation patterns, and other powerful natural forceshave driven climate change and weather events throughout Earth’s history and will continue to do so.”

“President Obama’s hubris is breathtaking. He now thinks an army of regulators can control our planet’s temperature and climate by tweaking emissions of plant-fertilizing carbon dioxide, a mere 0.04% of the atmosphere.”

“America’s communities do not need to be protected from climate change. They need to be protected from the excesses of authoritarian presidents and bureaucrats.”

Driessen and I look at and listen to Obama and wonder if others too see and hear someone uttering some of the most absurd claims about the climate. Then we worry that this someone is the President of the United States with the power to turn his ignorance into national policy.

At this point we have suffered his initial failure to respond to the recession he inherited from the 2008 financial crisis. More than six years later the economy has barely moved toward a normal rate of growth. Then we were gifted with ObamaCare and the disruption of what was widely regarded as the best health system in the world. And, for good measure, he imposed Common Core on an already weakened educational system. It is being repealed and opposed in many states. For good measure, his foreign policy, if he has one, is widely regarded as a total failure.

How is it a former “community organizer” possesses a seemingly vast understanding of meteorology? Did they also teach that at the Harvard Law School? “Climate change,” said Obama, addressing a graduating class of the Coast Guard Academy, “constitutes a serious threat to global security, an immediate risk to our national security, and make no mistake; it will impact how our military defends our country.”

“Our military and our combatant commanders,” the President told the Academy graduates, “our services—including the Coast Guard—will need to factor climate change into plans and operations, because you need to be ready.” For what? For a rainstorm? For snow? Wind?

This is the same President who sees no threat to our national security from Iran whose leaders shout “Death to America” every day when they aren’t also shouting “Death to Israel.” He has zealously been pursuing a deal that would enable Iran, the leading supporter of terrorism, to have nuclear weapons. Meanwhile Islamic State (ISIS) is taking over more territory in northern Iraq and into Syria. Obama might as well be dropping bags of marshmallows on them.

He blamed climate change in the form of “severe droughts” for the rise of Islamism in the Middle East and Africa. Someone needs to tell Obama that there have always been severe droughts somewhere on the planet, and floods, and forest fires, and blizzards, and hurricanes. Even so, in the last eighteen years, there have actually been LESS of these natural events, along with the flatlining of the planet’s overall or average temperature—there has been no warming!

Not content to blame climate change for the rise of terrorism, the White House issued a report that was described as “a doomsday scenario of health, security, economic and political issues.” The thing about climate is that it measured in centuries, not years. As for the weather, while records are maintained, it is usually reported as today’s news with a forecast of the coming week.

So you shouldn’t be surprised that the report blamed “asthma attacks” on climate change!

Suffice to say there isn’t a glimmer of hard evidence to support anything the President is saying these days about climate change.

And this is the same President that wants the U.S. and the rest of the world to give up the use of fossil fuels—coal, oil and natural gas—to “stop climate change.”

IF Obama’s climate change idiocy is just a way to distract Americans from the real problems we have encountered thanks to his failure to address them, then it is purely cynical and political.

IF Obama really believes this stuff, he is unfit to be President.

[Originally published at Warning Signs]

Categories: On the Blog

Wisconsin Politician Claims that Republicans are “Raping” Milwaukee Schoolchildren

May 26, 2015, 6:27 PM

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

May 26, 2015, 3:47 PM

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

May 26, 2015, 3:21 PM

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?

May 26, 2015, 1:51 PM

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

May 26, 2015, 1:39 PM

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

May 26, 2015, 1:31 PM

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’

May 26, 2015, 1:30 PM

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

May 26, 2015, 9:05 AM

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

May 26, 2015, 8:37 AM

“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