Out of the Storm News
From The Hill
Catrina Rorke, director of energy policy, R Street Institute
Rorke has become a champion of a controversial idea: that taxing carbon dioxide emissions is a conservative solution to climate change.
It’s a challenging case to make, because most Republican policymakers dispute that humans significantly contribute to climate change. But Rorke sees a carbon tax as one of the few palatable options for Republicans who want action to mitigate global warming.
One of the key concepts needed to better understand the economic argument for environmental protection is the idea of a public good.
When economists talk about public goods, they don’t mean just anything that’s good for the public, such as a school or hospital. Rather, to qualify as a public good, a thing must be nonexcludable (meaning it can’t easily be provided to some, but not others) and nonrivalrous (meaning that once the good is provided to some, it doesn’t really cost more to provide it to others).
One classic example of a public good is national defense. The existence of the military protects a sovereign nation against the threat of invasion. However, it’s not possible for the military to protect my neighbor from the invasion or attack without also protecting me. So national defense is nonexcludable. And, there’s really no incremental cost to protecting both of us compared to costs to protect my neighbor alone. Thus national defense is nonrivalrous.
The not so good thing about public goods is that the market doesn’t easily produce them. The fact that a public good is nonexcludable means I’d continue to receive its benefits even if I don’t pay for it.
From a self-interest point of view, I’m better off letting others bear the cost, while I “free ride” on their contributions. If everyone acts in his or her own interest, however, no one would be willing to pay for the public good at all, and the public good wouldn’t exist. This problem is known as the public goods problem (economists are nothing if not creative) or, sometimes, as the “free rider” problem.
One traditional solution to this problem is government action.
People don’t get to choose whether they will contribute toward national defense; they have to pay their taxes or they risk jail time. Economists like Elinor Ostrom have also written about ways that groups have used social norms and other nonstate mechanisms to overcome the public goods problem. In some cases, more carefully or creatively defined property rights can alleviate the public goods problem by giving a single individual or group ownership of the asset.
Many environmental problems are best understood as public goods problems. Clean air, for example, looks like a typical public good; it’s hard for me to have clean air without my neighbors having it too, and the cost of measures to improve air quality doesn’t change if he moves away and his house remains vacant.
Another example of an environmental public good is coastal wetlands. Leaving aside the strictly environmental benefits they provide, wetlands also serve as a valuable form of protection against flooding. By absorbing storm surge, wetlands can reduce the damage from flooding and windstorms, sometimes significantly. A recent estimate puts the flood-protection benefit from wetlands at $23 billion a year. Given the vulnerability of Texas’s coast to tropical storms, wetlands are vitally important to the state.
But, while wetlands can provide large economic benefits, these benefits meet the criteria for a public goods problem. A wetland that protects my house from flood damage is probably going to do the same for the other houses in my neighborhood, and the cost of maintaining the wetland typically doesn’t go up if a new house is built.
For that reason, public action to preserve wetlands (such as the recent decisions to protect wetlands using a portion of the proceeds from fines collected from BP as a result of the Deepwater Horizon Spill) can be economically beneficial to society as a whole.
If there were 30 loaves of bread and 50 people who wanted them, you can guess what would happen. Prices for those loaves would rise, from, maybe, $2, to $3 or even $10, depending on how desperate people were to make sandwiches. Those prices wouldn’t fall until some buyers switched to tortillas or bakers started baking more bread.
That concept is so simple it’s almost embarrassing to point it out. Yet when policymakers talk about other products, they lose sight of these basics. The housing market jumps to mind. Prices throughout California are still going up. Affordability is down.
I know well-paid professionals in some coastal cities who have basically given up on the dream of homeownership given the typical $1-million-plus price tag for a tiny bungalow. A modest apartment in San Francisco can easily set you back $4,000 a month. Orange County isn’t much better.
For years, people have retorted: “That’s the price for living near the beach.” Actually, it’s the price we pay because those who already live in such lovely places lobby city councils, boards of supervisors and the state Legislature to put the kibosh on new construction, supposedly to stop congestion. A few minutes’ drive from the Golden Gate Bridge, one finds endless, lovely countryside – all tightly growth-controlled to keep out young families and other riff-raff.
In California, it’s always fair game to blame politicians. Over the years, they’ve certainly passed a lot of laws that make it tough to build new houses. As they dream up far-reaching new programs on myriad subject matters (e.g., the Secure Choice retirement plan for the private sector), they steadfastly avoid dealing with major problems where they could effect change.
“The lack of housing supply fuels headlines that reveal the state’s housing prices at their starkest,” Liam Dillon wrote in the Los Angeles Times. “It could explain why doctors and others making as much as $250,000 a year are struggling to find homes in Palo Alto.” Prices in California are double the national average, Dillon writes, yet “legislators have shied away from tackling broad efforts to increase housing supply.”
Of course, state legislators aren’t the only ones to blame. City councils and county boards of supervisors love to control housing growth. But often, they merely succumb to public pressure. The Register reported this past week that a judge ordered Huntington Beach to “immediately comply” with a previous ruling requiring it to permit more low-income units as part of a high-density housing project.
The city, which has vowed to appeal, has been at odds with housing advocates “since last May, when the council, reacting to public outcry, eliminated more than 2,400 units of potential high-density housing from plans along portions of Beach and Edinger,” according to the report. Focus on the phrase, “reacting to public outcry.” Try to find any development project that doesn’t spark a backlash from neighbors, environmentalists and slow-growth activists.
Affordable-housing activists miss the big picture, of course. They believe the solution to the housing-affordability crisis is to subsidize (or mandate) the development of below-market-price “affordable” units. That’s a drop in the bucket; traditionally, “affordable” housing is best found in the “used” housing market. There’s no constitutional right to a subsidized new condo. They are right that localities need to permit more infill housing, but they need to green-light every type of new housing. If you feed supply into the system, it will help at every price point.
Vox’s Matthew Yglesias reported that a San Francisco supervisor “is forcing the city’s chief economist to conduct an unprecedented economic impact study of the city’s various land-use and development rules.” There’s this from the Santa Rosa Press Democrat: “Healdsburg is likely to create more affordable housing if it repeals a voter-approved growth management ordinance that restricts the number of new homes to an average of 30 per year.”
Maybe the local pendulum is swinging back in a more sensible direction, even if the Legislature hasn’t gotten the memo. The problem isn’t a secret.
A report last month by the state Legislative Analyst’s Office came to this conclusion: “[C]ommunity resistance to housing, environmental policies, lack of fiscal incentives for local governments to approve housing, and limited land constrains new housing construction. A shortage of housing along California’s coast means households wishing to live there compete for limited housing. This competition bids up home prices and rents.”
It’s simple stuff. The problem won’t be fixed until people stop coming here, stop having children or the government finally just lets builders build more houses.
EFF, along with Public Knowledge and the R Street Institute, said the Federal Circuit’s decision in Lexmark International Inc.’s infringement suit against Impression, a printer cartridge refurbisher and reseller, has created loopholes in traditional ideas regarding ownership.
In one of my favorite Far Side comic strips, the first panel offers what people typically say to dogs: “OK Ginger I’ve had it. You stay out of the garbage! Understand Ginger?” The next panel translates what dogs actually hear: “Blah blah Ginger, blah blah blah Ginger.”
I think of that comic sometimes when I’m stuck on the floor of the state Assembly or Senate and hear a Republican legislator giving a speech about “freedom.” All I hear is, “Blah blah Constitution, blah, blah limited-government.” My comprehension skills are better than the average mutt’s, but I’m trained to know blather when I hear it.
WASHINGTON (April 22, 2016) – Concluding a legal battle that began last year, ridesharing company Uber announced it will pay $100 million to settle two class-action lawsuits initiated by drivers who sought to be classified as employees, rather than as independent contractors.
Eli Lehrer, president of the R Street Institute, reacted to the announcement:
“While it would have been far better for the government to simply leave an innovative business model alone and empower workers to make their own decisions, this is still a welcome development in that it preserves the basics of an important, innovative business model,” Lehrer said.
The classification of its drivers as independent contractors has been integral to Uber’s rapid growth, as well as to its famed ability to offer its drivers flexibility in creating their own schedules. By applying a more traditional model to Uber, courts and regulators would threaten that approach, since classifying every driver as an employee would legally entitle drivers to minimum wage, overtime pay, unemployment compensation and more. Such a dramatic increase in per-employee costs would undoubtedly lead to the necessary establishment of limitations on when and how much drivers work for the company.
While the settlements are a welcome development, in that they avert a threat to the emerging ridesharing business model, the situation highlights the need for state and federal lawmakers to take decisive action to provide clarity. Labor markets need sensible regulatory policies that finally put an end to the continuous regulatory and legal challenges that have plagued startups like Uber and Lyft in their formative years.
In its annual Ridescore project, which scores 50 of America’s largest cities on how friendly their regulatory frameworks are toward ridesharing and other for-hire transportation services, R Street noted a general trend of improvement over the past year. But even as states like West Virginia, Mississippi and South Dakota have proactively passed legislation classifying most ridesharing drivers as independent contractors, labor-classification issues were seen as the “next wave of TNC policy challenges, as the initial matters of legal status, insurance and background checks approach complete resolution.”
“The time has come for lawmakers to begin sketching a policy framework that provides workers and firms much greater flexibility than exists in today’s rigid, old-economy structures,” noted the report’s authors. “Regulatory regimes that divide labor only into traditional salaried workers and entirely independent contractors do not suit the modern sharing economy.”
Among all the many problems that bedevil Nina, the Nina Simone biopic that finally comes to theatres this Friday nearly two years after making its debut at the 2014 Cannes Film Festival, the natural pigmentation of star Zoe Saldana does not feature among the 10 or 20 or 30 biggest.
Of course, you wouldn’t know that from the news coverage around the film, which has focused equally on the epic shade thrown Saldana’s way by Simone’s estate via Twitter (“Cool story but please take Nina’s name out your mouth. For the rest of your life.”) and the filmmakers’ decision to use makeup to darken Saldana’s relatively light-skinned complexion to more closely match the late singer, which has raised the usual concerns about “blackface.”
It’s true that Saldana bears not the slightest physical resemblance to Simone, even with the cosmetic enhancements and the Jan Brady fright wig. Where the film’s makeup crew actually fall most short is in their utter failure to allow any in the audience to suspend disbelief, even momentarily, that this beautiful 33-year-old actress (at the time of filming) could convincingly portray a 62-year-old alcoholic manic depressive.
But in truth, when all is said and done, Saldana is almost certainly the best thing about this muddled mess of a picture. Her performance, while displaying more ham than an Easter dinner, clearly demonstrates that she studied Simone’s staccato mannerisms and haughty affectations pretty intensely. She even acquits herself well behind the microphone, doing her own singing and making the wise choice not to strive for a Simone impression in that arena.
Given a career and a life as big and intense and all-too-often tragic as Nina Simone’s – from 1959’s I Loves You, Porgy through her political radicalization and support for black separatism through her decision, in 1974, to leave the United States behind forever – any biopic would have difficulty finding the appropriate focus. First-time director Cynthia Mort, previously best known as a writer for 1990s sitcoms, chooses as her window the Nina Simone of 1995 — embittered, paranoid and ready to draw a gun at the slightest provocation.
Nina sees its protagonist become enamored with a handsome young psychiatric nurse, played by Selma’s David Oyelowo, who is equally taken with her, albeit in a purely platonic way. As fate would have it, Oyelowo’s Clifton Henderson goes on to become Simone’s personal assistant and, later, her manager, guiding her toward a planned comeback/farewell concert in Central Park, even as he must endure her personal instability, unwelcome sexual harassment and homophobic slurs. In this way, the plot positions Henderson as Joe Gillis to Simone’s Gloria Swanson.
All of which might be a perfectly serviceable, if well-trodden framing device for ruminations on Simone’s life, the passions that animated her and the forces that conspired to keep her down, including her own self-destructive streak. The film does offer some flashbacks, but none that illuminate how such a unique talent ended up so broken down. Meanwhile, the plot never quite manages to shift out of neutral and the hokey and cliché-ridden script does its talented leads no favors. The film’s best moments tend to be its quietest, as Saldana works through the unique facial and body language to express all 36 flavors of “tortured.”
Its billing as a racially problematic film probably isn’t fully deserved. But Nina does manage to accomplish one final indignity that actual racist segregationists and a corrupt music industry and mental illness combined could not: It makes this towering figure of the 20th century appear small.
These days, it costs almost nothing to publish information online. So why isn’t more government information available to the public? Taxpayers spend $100 million a year on the Congressional Research Service (CRS), but only Congress gets to decide whether the research gets published. Is that fair? Should the CRS just put it all online? Evan is joined by Kevin Kosar, Senior Fellow at the R Street Institute and a supporter of legislation that would make all CRS reports public. Is there any potential harm to releasing this information? Could more transparency improve citizens’ view of government? For more, see Kevin’spost on Medium.
The attorneys general of 20 states have launched an investigation into groups they suggest have misled the public on the dangerous reality of climate change. Caught up in the inquisition of climate heretics are ExxonMobil, which has funded much private sector climate research and which today supports a revenue-neutral carbon tax, and the Competitive Enterprise Institute, a free-market think tank that rejects climate alarmism in favor of advocating energy affordability and abundance.
Through subpoenas for communications and research on climate change, the AGs aim to unearth any intentional misinterpretation of climate science. But the real inconvenient truth in this situation is that science itself is very much open to interpretation. It is, in fact, possible to disagree over the causes, effects and severity of climate change, and the pursuit of science and an appropriate policy response is advanced by having numerous voices engaging these difficult questions.
Misstating or exaggerating scientific consensus is a bipartisan offense. While we at R Street would never condone going after any organization for exercising its rights to free speech and advocacy, especially in pursuit of scientific truth, a few examples of scientific misinterpretation from the environmental community may serve as a helpful counterpoint to the witch-hunt pursued by these overzealous AGs.
Larry Schweiger, National Wildlife Federation: “There will be no polar ice by 2060 … Somewhere along that path, the polar bear drops out.”
Yes, Arctic sea ice is shrinking and seasonal sea-ice loss continues to grow, but the former president of the National Wildlife Federation takes it a step too far when it comes to the polar bears. What we know today is that bear populations are stable and adapting well to changes in ice patterns and their health parameters, including weight and reproductive rates, are strong. Zoologists have documented population declines in just 3 of 19 subpopulations, and those declines have stabilized or rebounded in recent years.
Kerry Emanuel, Massachusetts Institute of Technology: “We’re in for a rough ride over the next 10 years.”
In 2005, fresh off speculation about the link between hurricanes Katrina and Wilma and climate change, meteorology researcher Kerry Emanuel predicted a devastating decade of hurricane activity. While climate change unequivocally is increasing the ocean temperatures that lend hurricanes more energy and destructive power, we’re not yet certain whether hurricane frequency and intensity are actually increasing. The record actually suggests the number of hurricanes to make U.S. landfall has declined over the past 150 years. In fact, it has been more than a decade since a major hurricane – Category 3 or higher – has made landfall in the United States.
Rhea Suh, Natural Resources Defense Council: “Climate change played a direct and possibly determinative role in the death and destruction of a huge swath of the southern Philippines.”
The NRDC president attributed 2013’s Typhoon Haiyan, the deadliest typhoon in Philippine history, to climate change. Again, no particular weather event can be tied to a changing climate, even if anthropogenic forces make certain types of weather events more likely. The typhoon was a devastating tragedy, but that does not justify seizing on the deaths of 6,300 people to generate irrational and reactionary fear about the future impacts of climate change.
James Hansen, Columbia University: “Game over for the climate.”
With a doctorate in physics and a long career in climatological research, this former director of NASA’s Goddard Institute for Space Studies should know better than to offer overly simplistic sound bites on complex policy decisions – in this case, whether to build the Keystone XL pipeline. Yes, combustion of fossil fuels will add greenhouse gases to the atmosphere, but it’s far beyond scientific consensus to suggest that forestalling climate catastrophe requires closing off any one source of carbon.
Leonardo DiCaprio, United Nations: “We are seeing extreme weather events, increased temperatures and the West Antarctic and Greenland ice-sheets melting at unprecedented rates, decades ahead of scientific projections.”
This U.N. Messenger of Peace falls into a familiar trap. Scientists are still trying to parse which weather events might be made more likely by a changing climate, but we do have a rich data record for the pace of temperature rise and ice melt. Researchers have been trying to determine why warming has slowed of late, pointing to several factors that might help reduce the sensitivity of the atmosphere to greenhouse-gas-forced warming. The short answer is that the climate system is a bit more dynamic than we’d appreciated. Ice is proving similarly durable. The Greenland and West Antarctic glaciers hold enough water to raise sea levels alarmingly, so scientists keep a close eye on melting patterns. Thankfully, geologic features are working against runaway melting, restricting glacial flow, slowing the pace of glacial retreat and delaying sea-level rise.
If Al Gore weren’t part of this activist push against scientific dissent, the AGs might want to look into his history of bombastic statements about the future of our climate as well. Consider, “I believe it is appropriate to have an overrepresentation of factual presentations on how dangerous it is, as a predicate for opening up the audience to listen to what the solutions are.” It’s enraging to see one of the principle instigators of this investigation openly admit to engaging in the very behavior he wants to expose.
Of course, this isn’t actually about rooting out scientific misrepresentation, but rather discrediting any analysis that derails support for aggressive cuts to greenhouse-gas emissions. Climate change is real, happening, and human caused to a significant extent. It demands a thought-out, hotly debated, well-informed policy response that accounts not just for the science but also for the non-climatic consequences of any decision. Suggesting caution isn’t wicked, but necessary to the debate.
Data can only inform policy choices, not direct them. The AGs’ crusade is a dogmatic and political attack on First Amendment rights – not a scientific one.
Free-market groups to Congress: Oppose federal bailouts for Florida’s government-run property insurance plans
On behalf of the millions of citizens represented by the undersigned groups, we write in strong opposition to H.R. 4947, the misleadingly titled “Homeowners Insurance Protection Act” (HIPA) introduced by Rep. David Jolly, R-Fla. This legislation would establish a so-called “national catastrophe fund” that could result in enormous taxpayer bailouts for ill-conceived state government-run insurance schemes. Far from protecting taxpayers by reducing future costs, this type of legislation could potentially burden them with billions of dollars in liabilities and create a massive federal bailout facility for failing state-run plans.
By establishing a federal reinsurance facility for broken state-run programs, H.R. 4847 would discourage ongoing reform in states like Florida, where the Florida Hurricane Catastrophe Fund has $17 billion in liabilities. While Gov. Rick Scott and the Legislature have worked hard to reduce the Cat Fund’s risk to taxpayers in recent years, legislation like HIPA would encourage future leaders to reverse that progress, secure in the knowledge that the federal government would come to the rescue following a sufficiently large storm.
In fact, as currently written, Florida is the only state that would be eligible for the bill’s bailout facility, calling into question its stated commitment to improve disaster planning nationwide. Perhaps even worse, it would encourage other states to copy Florida’s failed model, creating state catastrophe funds that displace the private sector in order to capitalize on guarantees from federal taxpayers.
Establishing a federal bailout for failing state systems would represent a tremendous expansion of the federal government’s already excessive role in disaster recovery. It would amount to forcing taxpayers to guarantee against losses that currently are covered by the private sector. There is a vibrant, well-capitalized reinsurance market that clearly could and does bear these risks at market-based, actuarially sound rates.
“National catastrophe fund” legislation runs counter to the most basic principles of insurance, which manages risk by spreading it broadly as possible. By creating a federal government-run reinsurer, the Jolly bill would lead to dramatically higher concentrations of risk within our borders and concentrated risk is always more expensive. No longer would claims on Florida hurricanes be balanced in global reinsurance markets by premiums paid for, say, earthquake risks in Japan. Instead, U.S. taxpayers would be on the hook for huge losses.
H.R. 4947 would increase the size and scope of the federal government and encourage states to create and maintain reckless government-backed insurance schemes. This legislation is not federal assistance for natural disasters; it is a federal bailout for state-created financial disasters. In essence, it would countenance open-ended federal subsidies for “too big to fail” state insurance plans that are wholly incapable of dealing with a major catastrophe. This bill is counterproductive to sound insurance policy and poses unacceptable risks for taxpayers. We urge you to oppose it vigorously.
Andrew Moylan, R Street Institute
Norman Singleton, Campaign for Liberty
Kent Lassman, Competitive Enterprise Institute
Seton Motley, Less Government
Brandon Arnold, National Taxpayers Union
Steve Ellis, Taxpayers for Common Sense
David Williams, Taxpayers Protection Alliance
It’s hard to spend time on Facebook without finding examples of “Godwin’s Law”: The longer an online discussion goes on, the higher the likelihood someone will use a Nazi analogy. After reading social-media posts about the presidential race, it’s clear such discussions — Is Hitlery (Clinton) creepier than (Donald) Trumpolini? — needn’t go on very long before someone mentions a dead dictator.
Unfortunately, the overuse of such comparisons numbs us to those instances where only such an analogy will suffice. Consider the following situation and ask yourself whether this is the type of thing that happens in free or totalitarian societies:
People vote in an election. The government suspects the vote will go against its allies, so it seizes the ballots. Officials overseeing the election seem to be in cahoots with the suspected losers. They hold proceedings that have the trappings of an impartial legal process, but the results are a foregone conclusion. After three years of bureaucratic machinations, officials decide to destroy the ballots — and tout the decision as a victory for voters’ rights.
The term “Soviet-esque” jumps to mind. The Soviet Union did indeed have elections. It had a constitution, too. In a banana republic, the voting boxes would have been seized, the voters rounded up, and that would have been that. In totalitarian regimes, image is important. It’s not a Nazi analogy, but I can’t resist the Soviet comparisons.
The example here was inspired by a union decertification election at one of the nation’s largest fruit farms. As many workers allege, the United Farm Workers — the union founded by Cesar Chavez — won an organizing election at Gerawan Farming near Fresno in 1990. Then the UFW largely disappeared from the scene, reappearing 22 years later and claiming to be the rightful dues-collecting representatives of the workers.
The farm is known for paying some of the best wages in the industry. Its workers held an election in 2013 on whether to decertify the UFW, figuring it wasn’t much help, due to the long absence. The Agricultural Labor Relations Board — created under Gov. Jerry Brown decades ago to assure that farmworkers can choose their labor representatives — oversaw the voting. It then grabbed the ballots and has kept them in a vault ever since. It recently voted to destroy them.
“It almost seems like (ALRB) is in cahoots (with the union),” said a Fresno County judge at one point in the latest fracas. You think? Instead of telling 3,000 farm workers the government knows best and will never count votes to decertify the union, the Brown administration let them trudge up to the ALRB headquarters in Sacramento, where they were treated to a kind of bureaucratic callousness one would expect in — here I go again — the Soviet Union.
Instead of counting the votes, the labor board forced the workers into “mandatory mediation and conciliation,” where it and UFW leaders crafted the workers’ contract. Workers even were denied an opportunity to be in the room where their contract was being hammered out. The Legislature weighed in — on the side of the union — by passing a bill that gives the agency even more power to impose contracts on workers unilaterally.
For a while, it looked like the governor might save the dignity of his agency. He vetoed that bill (S.B. 25) and brought in an old hand, former National Labor Relations Board Chairman William B. Gould IV, to run it. Some personnel changed, but nothing substantive did. On April 15, the board affirmed its own past findings and set aside the election. It said the farm “unlawfully supported and assisted a petition to decertify the UFW,” although there “was insufficient evidence that the employer… initiated an effort to decertify” the union.
Among its findings: the farm helped send buses to Sacramento to protest the board’s action and thus “sent a signal to all employees that it supported the decertification effort.” The “employer unlawfully granted a wage increase during the decertification campaign and unlawfully solicited employee grievances.” By the way, the ALRB spent more than $10 million in tax dollars on these show trials.
“In its decision to destroy the ballots, the board ignores the desires of workers to determine their own economic future,” according to a Gerawan Farming statement. “Chairman Gould justifies the board’s power to trump worker rights. He insinuates that Gerawan’s employees have become ‘servile pawns’ of ‘masters,’ subjugated to a ‘tyranny’ of their employer. He frames the issues as a parable to the ‘storm clouds’ that ‘gathered so ominously’ in Nazi Germany. He cloaks his decision in the language of democracy, in order to destroy a democratic right.”
Gould thus confirmed Godwin’s Law doesn’t only apply to the Internet, but to bureaucratic pronouncements as well. But it gets even more dystopian. Two weeks before his decision, the ALRB chairman penned a column in the Los Angeles Daily Journal, a prominent legal publication, defending the U.S. Supreme Court’s decision upholding mandatory union-dues payments (Friedrichs v. California Teachers Association).
First, the hypocrisy: “If teachers object to union policies with regard to seniority, tenure and teacher evaluations, they can always campaign against the union’s attempt to become a representative,” Gould wrote. “Dissenters are always free to vote for someone else at an appropriate time and dissatisfied workers can always get no union, another union or new leadership.” Unless, of course, a union-friendly government official decides to shred their votes.
Second, there’s a broader issue raised by the attorney representing some of the disenfranchised Gerawan workers. “(I)f the contract is imposed on these workers, and the UFW is permitted to siphon away workers’ hard-earned wages, the union stands to approximately double its membership and annual revenue,” Anthony Raimondo wrote in a recent letter to Gould. Based on the view expressed in the Daily Journal column, “such an outcome would be a wonderful benefit to your beloved Democratic Party, and a boon to a legislative agenda that you personally support. Such a public position is inappropriate for a person in your position….”
Alas, in Sacramento’s one-party state, no one with any clout is likely to object. It may not be Nazi-like, but it’s certainly totalitarian.
WASHINGTON (April 21, 2016) – Texas’ solar-power potential outpaces that of nearly every other state. But according to a new R Street policy brief, that potential remains largely unrealized.
“Despite falling prices, Texas ranks behind such states as Colorado and New Jersey in solar-electric capacity,” writes R Street Senior Fellow Josiah Neeley. “Many energy-efficiency and other projects that generate significant cost savings on paper remain undeveloped.”
The report notes two particular mechanisms that could help ease the often prohibitively expensive entry costs typically necessary to make energy saving improvements to properties.
The first is property assessed clean energy (PACE) financing, under which “the responsibility to repay the loan to finance a property’s energy-efficiency improvements attaches to the property itself, rather than the property owner.” This is intended to address situations in which commercial property owners are hesitant to make clean-energy upgrades to a property, due to uncertainty over whether they will remain in the property long enough to pay off the loan and recoup the long-term financial savings.
The second mechanism is on-bill repayment, which allows individuals to repay loans for energy-efficiency improvements via an assessment on their monthly utility bills. This approach has been used successfully in a number of states and promises simplicity and flexibility for residential homeowners, as well as peace of mind for lenders, given the historically high rate of compliance with utility-bill payments.
“While government should not be picking winners and losers in the energy marketplace, it should take care that it has not created barriers to the emergence of new energy technologies,” the author writes. “Providing mechanisms that allow private financing and voluntary development of clean energy and energy-saving systems offers Texas consumers the ability to decide what makes sense for them. If properly designed, these new options can deliver billions in energy savings to Texans, without using the heavy hand of taxpayer funding or government mandates.”
Harriet Tubman is a good choice to replace Andrew Jackson on the front of the $20 bill. Jackson, the first Democratic president, is exactly the sort of overheated, pompous populist that has tended to screw up the American political system. His demotion to the back of the bill is long overdue.
But before we act to raise Tubman’s stature to the point that she is memorialized on commonly used currency, it behooves Americans to understand her role in our common history. It’s a lot more interesting than the description of her as an “Underground Railroad conductor” that appears in my son’s elementary-school materials and many popular accounts of her life.
In fact, Harriett Tubman was a gun-toting, Jesus-loving spy who blazed the way for women to play a significant role in military and political affairs.
Indeed, her work on the Underground Railroad was mostly a prelude to her real achievements. Born into slavery as Araminta Ross, Tubman knew the slave system’s inhumanity firsthand: She experienced the savage beatings and family destruction that were par for the course. She eventually escaped and, like most who fled, freed herself largely by her own wits.
She later went back south — always carrying a gun she wasn’t afraid to use — to help guide her own family and many others out of the plantations. The courage and will that this took is difficult to fathom. But she’s really a secondary figure in the history of the Underground Railroad. Historians estimate that she led 300 or so people to freedom, while figures like William Sill and Levi Coffin helped bring freedom to thousands.
This isn’t to say that Tubman is a minor figure. To the contrary, what she did during the Civil War secures her an important place in history. The Union, fighting a war mostly on southern soil, desperately needed good intelligence. Tubman’s exploits on the Underground Railroad, quick wits, mastery of stealth, knowledge of local geography, and personal bravery made her a near-perfect scout and spy. She could often “hide” in plain sight, since white-supremacist southerners probably were not inclined to consider a small African-American woman a threat.
Her quasi-memoir “Scenes in the Life of Harriet Tubman” (told to Sarah Bradford and written in the third person) explains how things worked. While African Americans were suspicious — often rightly — of Union soldiers, they were willing to trust Tubman. “To Harriet they would tell anything,” Bradford writes. “It became quite important that she should accompany expeditions going up the rivers, or into unexplored parts of the country, to control and get information from those whom they took with them as guides.”
Tubman was one of the most valuable field-intelligence assets the Union Army had. She had hundreds of intelligence contacts and could establish new ones — particularly among African Americans — when nobody else could.
During one of her scouting missions along the Combahee River, she became the first woman and one of the first African Americans to command a significant number of U.S. troops in combat. The raid she organized and helped to command freed far more enslaved people than her decades of work on the Underground Railroad. She also was a strong advocate of allowing African Americans into the Union Army. She knew Robert Gould Shaw, who commanded the almost entirely African-American 54th Massachusetts Volunteer Infantry regiment — the unit at the center of the 1989 film “Glory.” A (probably apocryphal) legend even has it that cooked his last meal before the heroic assault in which he and much of his regiment perished.
In her “retirement” — she never really stopped working until she became ill at the very end of her life — Tubman remained a political presence. A friend of Secretary of State William H. Seward, she settled in his hometown of Auburn, New York, on land he sold her. There, she helped to build both a church (she was devoutly religious) and a privately run retirement home. She also fought for women’s suffrage, supported Republican politicians, and advocated for fair treatment of black Civil War veterans, which they rarely received.
In short, Harriett Tubman was a black, Republican, gun-toting, veterans’ activist, with ninja-like spy skills and strong Christian beliefs. She probably wouldn’t have an ounce of patience for the obtuse posturing of some of the tenured radicals hanging around Ivy League faculty lounges. But does she deserve a place on our money? Hell yeah.
The last few years have seen an incredible decline in the price of technologies that provide clean energy or increase energy efficiency. The cost of solar power has fallen by more than half since 2009. In April 2015, Tesla announced the release of its new Powerwall battery, providing commercially available electrical-storage options for residential and commercial consumers, as well as for utilities.
The untapped benefits to Texas from clean-energy technologies are enormous. Texas has more solar-power potential than any other state. A 2008 study by the Public Utility Commission of Texas found that energy-efficiency measures could save Texans between $4.2 billion and $11.9 billion. Moreover, the Lone Star State’s considerable manufacturing base is ideally suited to take advantage of large-scale cogeneration, in which heat generated as a side-effect of the manufacturing process is used to produce electricity.
Yet when we turn from potential to reality, Texas often lags. Despite falling prices, Texas ranks behind such states as Colorado and New Jersey in solar-electric capacity. Many energy-efficiency and other projects that generate significant cost savings on paper remain undeveloped.
The key question – is Texas’ low utilization of clean energy and energy efficiency something about which free-market advocates should be concerned? The answer depends on the cause of the lag. Other states may use more solar power because government subsidies and mandates have increased demand artificially.
To the extent that lower use of clean energy and energy-efficiency technologies is genuinely the result of market forces and consumer preferences, this should be respected. Government should not use subsidies or mandates to increase demand for clean-energy sources.
On the other hand, if Texas isn’t meeting its potential on clean energy because of structural factors, regulatory barriers or a lack of appropriate financing options, addressing these problems should be seen as an opportunity to allow the market to function more effectively by removing obstacles in its path. Many clean-energy technologies require high upfront costs that are repaid over the lifetime of the system. These initial costs may deter widespread adoption, either because of uncertainty or lack of financing.
Fortunately, the last few years have seen the development of a number of new financing options that allow for greater access to clean energy without undercutting market forces.
Tuesday’s unanimous decision by the U.S. Supreme Court invalidating Maryland’s subsidy program to encourage building new power generation marks a welcome defense of the principles of competition in electricity markets.
Authored by Associate Justice Ruth Bader Ginsburg, the opinion found the Maryland program set an interstate electricity rate, which falls under the exclusive jurisdiction of the Federal Energy Regulatory Commission (FERC). FERC had rejected Maryland’s proposal on grounds that free-market forces – namely, the regional PJM Interconnection LLC’s capacity auction market – should determine rates and that Maryland’s subsidy would distort the market price.
Maryland is one of 13 states to participate in PJM, a regional transmission organization charged with operating the Mid-Atlantic grid reliably. Its capacity market helps ensure the grid remains reliable by procuring sufficient resources to meet future demand and by using price signals to determine the type, size and location of these capacity resources. Through this process, market actors help determine when and where it is cost effective to retain existing resources or to install new ones.
But back in 2012, having determined that PJM’s capacity market wasn’t procuring enough in-state resources, the Maryland Public Service Commission (PSC) enacted its own regulatory program that required electric distribution companies to subsidize an in-state power plant. The commission selected CPV Maryland LLC to construct the new plant, which was financed by a contract that provided an income guarantee. Under the agreement, CPM could sell power to PJM, but they would receive the price set out in the contract, rather than the price determined by the PJM capacity market. This ensured enough revenues flowed to CPV to build the plant, regardless whether price signals from the capacity market indicated it was needed. The income guarantee provided an incentive to CPV to offer power at a very low, uncompetitive level.
Maryland’s subsidy program didn’t solve a problem. It created one. The PSC never actually had a convincing case that the program was needed for improved electric reliability, but it did have political motivation to prefer more in-state resources be built.
As the grid operator, PJM has the expertise to determine whether its own resources are sufficient. Maryland couldn’t hope to be better able to determine whether there were enough resources in the PJM than the PJM itself, given that PJM’s capacity market has procured sufficient electricity resources to meet demand for more than a decade.
Electricity resources should be procured competitively, regardless which state those resources reside in. Subsidies like those in the Maryland program serve to suppress capacity-market prices artificially, lead to inefficient procurements and create political risk for market participants, which can translate into higher costs for capital.
The high court’s decision in this case promises direct benefits to Maryland consumers, and to those throughout the rest of the PJM region, by avoiding market distortions and regulatory costs. The precedent it sets should also sink a similarly damaging subsidy program adopted by New Jersey in 2011.
The court restrict its opinion to the type of subsidy designed by Maryland, which is contingent on the capacity market. The ruling does not necessarily apply to distortive subsidies more broadly, although it does note that future state actions to disregard or mute wholesale rates could be prohibited.
While closing the door on one form of damaging subsidy, other forms remain pervasive. The decision explicitly does not apply to land grants, direct subsidies, tax incentives, construction of state-owned generation facilities or re-regulation of the industry. All these forms of subsidies can distort capacity market behavior and results. None looms larger than the recently approved Ohio subsidies for FirstEnergy Corp. and American Electric Power Ohio.
This decision can be put in the win column, but the fight to defend competitive markets from state subsidies wages on.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
It seems like every month, I get an email or two from strangers asking me the same question. They read something like this: “Hi. My elderly father died, and when I was cleaning out his house to get it ready for sale, I found some very old looking bottles. Some of them are not open. Are they worth anything?”
Unfortunately, my response never is especially encouraging. There is, I inform them, no licit secondhand market for alcoholic beverages, for the most part. So, I cannot tell you what a bottle of Old Fitzgerald Bourbon from 1970 or a six-pack of Thomas Hardy Ale from 1995 would sell for. Sure, if you had a large and opulent collection of antique beverages, you might be able to get it assessed and sold by an auction house. But even for those lucky souls, it is a painstaking and time-consuming process.
It is a confounding situation, which means, of course, it was created by government. People long have been free to sell their stuff. One need only visit an antique shop or a Goodwill store. There is a market for nearly everything, whether old baseball cards, DVDs and music cassette tapes, or jewelry, antique knives or eye glasses. The garage sale is an American tradition.
Yet various laws forbid consumers from reselling a previously purchased alcoholic beverage, even if it has not been opened. (One takes little comfort in learning that it is OK to sell empty beverage bottles.) You ask: “I have this old, unopened bottle of gin. It has value. Why can I not sell it to someone? Why am I obliged to pour it down the drain?” The most commonly advanced arguments against the resale of drinks are: brand protection, fraud and consumer safety. So, for example, Buffalo Trace Distillery, which makes some marvelous whiskeys, stated this past year:
Our strong recommendation is not to buy our whiskeys on the ‘secondary’ market, aside from the fact that it is illegal in most states, there is also no guarantee about what you might be buying from a product provenance standpoint. Sadly, we see mounting evidence in other parts of the world around counterfeit spirits. We do not want to see any customer of ours duped in the secondary market nor having to pay exorbitant prices. We are continuing our efforts to shut down the illegal ‘secondary’ market for our whiskeys.
While these concerns are understandable, they are not wholly persuasive. Fraud? Anyone – competent or not— can advertise themselves as a handyman for hire on sites like TaskRabbit.com. Anyone can sell what they believe to be a first edition Hemingway novel on Amazon.com. Consumer safety? One can buy old power tools that may or may not be safe to use. People have been selling used motorcycles and powerboats via classified ads for decades. In the resale market, products with warranties and guarantees can be found, but caveat emptor is the norm. Brand protection? Absent massive counterfeiting, no brand is going to suffer discernable harm if drinks aficionados are selling their old bottles to one another.
Which they already are, and this reality is the biggest objection to the current drinks resale bans. Black markets and exchanges already have cropped up. For a time, there were various Facebook pages where folks sold old and rare Bourbons to one another. These pages recently were shut down, but the exchanges will pop up elsewhere. The Internet makes it very easy for owners of old bottles to locate buyers, and there is no way to police all of it. Heck, I could easily purchase the various old hooches that people email me about. (I don’t.)
From a libertarian perspective, individuals should be free to resell alcoholic beverages without any sorts of restrictions. The market, over time, will sort out the good sellers from the bad (rather like the used goods markets on Amazon.com, eBay.com and the like.) However, to satisfy concerns about fraud, safety and counterfeiting, one might establish a system like that which exists for gun sales. Only licensed purchasers could buy secondhand drinks, and they then could sell them to the public. Purchasers would be required to record their inventories and make them available to the Alcohol and Tobacco Tax and Trade Bureau. Sales could even be taxed, as auction house sales of old drinks are.
Either way, the sensible path forward is to make the resale of beers, spirits and wines legal. Continuing to ban the resale of drinks will only ensure that the black market continues.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
Broad coalition to House Financial Services Committee: Oppose federal bailout fund for state-run insurance programs
Dear Chairman Hensarling:
As a coalition of leading taxpayer advocates, environmental organizations, housing and mitigation groups, and insurance interests, we write to urge your opposition to a bill recently referred to your Committee—H.R. 4947, to establish a federal backstop or bailout fund for state-run insurance programs. H.R. 4947 would cost taxpayers billions of dollars, displace the private insurance and reinsurance market, and result in incentives to build in unsafe and environmentally fragile areas. An earlier version of this legislation was estimated to potentially cost the federal government over $200 billion.
The bill creates a federal bailout program that is costly, ill-advised and unnecessary. The proposal is principally designed to benefit one state-Florida-at the expense of taxpayers in all other states. While Florida has created a state-run insurance system to cover natural disasters based on artificially low rates, the state legislature and, indeed, the leadership of Florida’s unique state entities, have been taking steps to transition their insurance program back to where it belongs—in the private sector. Unfortunately, H.R. 4947 would discourage Florida from continuing to fix their insurance system, and would encourage other states to create flawed state-run insurance systems. These state systems would mimic the programs in Florida, which unlike private insurance and reinsurance, which maintain proper liquidity and reserves to pay claims, are severely under-capitalized and not able to pay claims in the event of a large hurricane without the imposition of new taxes, if at all.
There is no need to create a federal backstop for natural disaster insurance, supplanting a functioning private insurance and reinsurance market. Private reinsurance and capital markets are robustly assuming catastrophe risk, while federal insurance programs struggle to deliver on their commitments, such as the National Flood Insurance Program, which is more than $23 billion in debt in large part due to inadequate rates. Subsidized rates encourage development in risky and environmentally sensitive areas, creates moral hazard rather than mitigating risk, and inevitably results in huge taxpayer liabilities.
SmarterSafer urges Congress to reject the ideas in H.R. 4947 and to resist calls to create new bailout funds for state-run insurance and reinsurance programs for natural disasters. We look forward to working with you on these issues.
The attached policy brief has been accepted for publication by the journal Nicotine & Tobacco Research.
This is a follow-up to the presentation by Dr. David Ashley of the FDA’s Center for Tobacco Products (CTP) at the March 2016 meeting of the Society for Research on Nicotine and Tobacco (SRNT). He shared serious doubts about whether Swedish Match should be granted Modified Risk Tobacco Product (MRTP) status for eight snus products.
As published in Nicotine and Tobacco Research (NTR), and re-emphasized at the SRNT meeting, the FDA claims to be committed to a science-based regulatory agenda, rather than one based on political or special-interest concerns.
Some question this FDA claim.
It makes little sense to impose little or no regulatory burden on cigarettes currently on the market while attempting to remove far-lower-risk and less-addictive e-cigarettes and related vapor devices (e-cigs) from the market, and hesitating to grant Swedish Match’s snus products MRTP status. It makes even less sense to deal with pharmaceutical nicotine products (patches, gums, etc.) as if they have no nicotine.
A major problem with the FDA Tobacco Law relates to the requirement that the manufacturer of a new or reduced risk product document that it will not harm non-users of the product (i.e. will not recruit non-users to nicotine addiction). Unfortunately, FDA’s interpretation of this wording imposes a cost burden so substantial that, if unchanged, it will eliminate all of the smaller companies and all of the customizable products from the e-cig marketplace.
One might expect that advertising a product as lower-risk than cigarettes might recruit non-smoking teens to nicotine addiction. Recent experience with e-cigs in both the United Kingdom and the United States provides convincing evidence that such advertising, while it may recruit some to product experimentation, will recruit very few to continuing use, while attracting large numbers of teen smokers away from cigarettes. Allowing e-cig manufacturers to reference this class-of product experience to satisfy the harm-to-non-users provision of the law would eliminate a currently proposed unbearable cost burden.
If FDA determines it does not have the administrative flexibility to re-interpret this provision of the law, public health authorities could urge congressional action to amend it.
The cigarette is the most addictive and hazardous tobacco product, and the dominant nicotine-delivery product in the United States. All of the commonly quoted American data on tobacco-related illness and death relate to this one product. Despite public statements to the contrary, snus and the other smokeless products that have been widely available on the American market for a very long time show no measurable increase in risk of any potentially fatal tobacco-attributable illness.
Thus, a good case can be made for serious consideration of adding a tobacco harm reduction (THR) component to current tobacco-control programming. Such an initiative would publicly compare the risks of e-cigs and other smokeless products to cigarettes. This would encourage smokers who are unable or unwilling to quit to switch to a lowerrisk product. As seen by this author, THR would likely yield reductions in tobacco-related illness and death not otherwise achievable, and do so while continuing to reduce teen recruitment to nicotine addiction.
Beliefs that underlie the FDA’s refusal to consider tobacco harm reduction appear to include the following:
- Non-pharmaceutical nicotine products are considered to have harms, but no benefits. Thus, evidence that self-administered nicotine offers cognitive/behavioral benefits for persons with schizophrenia, depression and bipolar disorder has not been considered. With no consideration of potential benefits, endorsement of low-risk products as substitutes for cigarettes is not on the tobacco-policy table for discussion.
- Tobacco use is considered a disease, not a behavior. Study designs appropriate to address long-term behavioral change are not considered. This, too, rules out consideration of low-risk products as substitutes for cigarettes.
- The primary determinant of risk is considered to be the chemical composition of the product. This belief contradicts the fact that it is the class of tobacco product, whether combusted or smoke-free, that determines both its addictiveness and its risk of potentially fatal tobacco-attributable illness. This belief imposes requirements for unnecessarily detailed product-specific chemical analyses and population studies if a manufacturer is to seek approval for a new product or request MRTP status. These are regulatory burdens not placed on the major cigarette brands.
- Pharmaceutical nicotine-delivery products (patches, gums, etc.) are treated by the FDA as if they have no nicotine. These are the nicotine products most accessible to minors. They are sold on open shelves in a variety of candy and fruit flavors without enforcement of age restrictions. They are approved for unlimited use as to dose and duration, for simultaneous use of multiple products and for use by those who continue to smoke. They are advertised on television. Tobacco-related surveillance systems do not track use of these products.
Despite the absence of combustion and tar, the low concentration of the other toxins in cigarette smoke, and e-cigs’ failure to recruit non-smoking teens to continuing nicotine use, proposed deeming regulations address e-cigs as if they are as hazardous and addictive as tobacco cigarettes. Despite evidence to the contrary, public-health authorities continue to allege that these products increase teen cigarette use. A science-based regulatory agenda would not remove low-risk products from the market by imposing unbearable regulatory costs. It would seriously consider and fund research into possible benefits of low risk products, consider feasible approaches to tobacco harm reduction, and refrain from misleading public statements.
This week, many conservative groups came out supporting H.R. 4900, the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), introduced by Rep. Duffy and developed by the Committee on Natural Resources. While work on the legislation continues, these groups understand the core bill represents a principled, responsible solution to the fiscal crisis in Puerto Rico.
R Street Institute: Time for Congress to Act on Puerto Rico
“The first alternative available is to deal with many hard decisions and many necessary reforms in a controlled fashion. The second is to have an uncontrolled crisis of cascading defaults in a territory of the United States. Congress needs to choose the controlled outcome by creating a strong emergency financial control board for Puerto Rico—and to do it now. This is the oversight board provided for in the bill currently before the House Natural Resources Committee. The bill further defines a process to restructure the Puerto Rican government’s massive debts, which undoubtedly will be required.