Feed aggregator

As I noted last week, Los Angeles is not the only region experiencing declining transit ridership. Another is Washington, DC, where a recent report from the Washington Metropolitan Area Transit Authority (WMATA aka Metro) revealed that ridership has fallen to the lowest level since 2004. Ominously, the agency’s financial situation is so bad that it has hired a bankruptcy attorney to help it deal with its problems and is reshuffling its top management, forcing at least one executive to retire.

As detailed in the actual report to the agency’s board, rail revenues and ridership in the first half of F.Y. 2016 are both down by 7 percent from the same period in F.Y. 2015. Metrorail ridership peaked in 2009, and if the second half of F.Y. 2016 is as bad as the first, annual ridership will be down as much as 30 percent from that peak despite a 15 percent increase in the region’s population. Bus ridership and revenue in 2016 is also down but by only about 3 percent below 2015.

Metro rail’s ridership declines, continued the report, are due to declining service reliability. Median travel times, the unpredictability of travel times, and the frequency of major service delays have all increased.

The report doesn’t say so, but a large part of the problem can be attributed to the construction of the Silver Line in Virginia. Since the Silver and Blue lines share the same tracks in DC and the Blue Line was already operating at full capacity, opening the Silver Line forced the agency to reduce service on the Blue Line, which quite possibly lost it more Blue Line customers than it gained on the Silver Line. The cost of operating the Silver Line also diverted resources away from needed maintenance of the older lines. The decline in bus ridership probably represents people who rode both train and bus who gave up transit due to these problems.

Anecdotal evidence provided by comments and tweets on WMATA news reports suggests that a lot of DC-area residents have permanently given up on transit. “Eliminating WMATA from my day is the best decision I could have made for improving quality of life,” says one. “I stopped riding and started driving in June,” says another. “Parking costs more but there were huge delays weekly on metro, no reliability.” “The decision to avoid WMATA is simple,” observes a third. “It’s cheaper and over twice as fast for me to drive vs taking the new silver line.”

To make matters worse, a train operator ran a red light last week and almost collided with a train going in the opposite direction. Metro train used to be run partly by computer, but since the fatal 2009 crash that resulted from computer failure, Metro hasn’t trusted the computer system and relied instead on human operators controlling speeds and braking. But an FTA report last December found that train operators have run at least 47 red lights in the past four years.

The reliability problems have led WMATA’s deputy general manager, Rob Troup, to resign in disgrace and the agency is reshuffling its top management. Troup is not the first WMATA executive to resign due to failure to fix the system’s problems, and he probably won’t be the last.

Since the trains bring in nearly three-fourths of the agency’s fares, the decline in revenues seriously impacts WMATA’s budget. This may be one reason why WMATA has hired Kevyn Orr, the bankruptcy lawyer who guided Detroit through its bankruptcy. One of the things Orr will need to do is help WMATA deal with its $2.5 billion unfunded pension and health care liability, which will add considerably to its woes in the near future.

WMATA’s troubles will soon be replicated in many other cities. Many transit agencies, including those in Boston, Buffalo, New York, Pittsburgh, and Portland, have even more unfunded obligations (when measured as a share of operating revenues) than Washington’s. Few transit agencies that built rail lines since the 1980s have budgeted enough money for maintenance. Back in 2010, the FTA found that America’s rail transit systems suffer from a $60 billion maintenance backlog, a number that has probably greatly increased as agencies aren’t spending enough money to keep up with deterioration, much less reverse the problem.

I’ve written exhaustively about this administration’s sheer statistical failure at the Supreme Court. It has the worst record of any modern presidency, whether you count in absolute won-loss – where the solicitor general’s office struggles to get to 50 percent, against a historical norm of 70 percent – or by unanimous losses alone.

While we’re still in the part of the Court’s term before the decisions start flying fast and furiously, I thought I’d present the latest update on where we stand with respect to those unanimous losses, where President Obama doesn’t even get the votes of the two justices he appointed. Here are the stats:

  • In the first 6.5 years of Obama’s presidency (January 2009 to June 2015), the government lost unanimously at the Supreme Court 23 times, an average of 3.62 cases per year.
  • In all 8 years of George W. Bush’s presidency, the government lost unanimously 15 times (1.875 cases per year).
  • In all 8 years of Bill Clinton’s presidency, the government lost 23 times (2.875 cases per year).
  • In other words, Obama has lost unanimously twice as often as Bush and 1.5 times as often as Clinton. Obama also passed Bush’s 8-year total in less than 5 years.
  • The Justice Department’s unanimous loss rate from 2012 to 2014 was especially bad – 13 cases in 30 months – almost three times Bush’s overall rate and almost twice Clinton’s (and that doesn’t count amicus litigating positions with unanimous losses).

For the record, here are the unanimous losses in the last four terms, so we can reminisce about the greatest hits (cases in which Cato filed marked with an asterisk):

  • 2012 (4 cases): United States v. Jones*; Sackett v. EPA*; Hosanna-Tabor v. EEOC; Arizona v. United States
  • 2013 (5 cases): Gabelli v. SEC*; Arkansas Fish & Game Commission v. United States*; PPL Corp v. Commissioner of Internal Revenue*; Horne v. USDA*; Sekhar v. United States
  • 2014 (4 cases): Burrage v. United States; Bond v. United States*; Riley v. California*; Noel Canning v. NLRB*
  • 2015 (3 cases): Mach Mining v. EEOC; Henderson v. United States; McFadden v. United States

These cases have nothing in common, other than the government’s view that federal power is virtually unlimited: Citizens must subsume their liberty to whatever the experts in a given field determine the best or most useful policy to be. If the government can’t get even one justice to agree with it on any of these unrelated cases, it should realize there’s something seriously wrong with its constitutional vision. 

And so, as we look ahead to the opinions due to come down this spring and summer, keep in mind that if the government loses, it won’t be because its lawyers had a bad day in court or because the justices ruled based on their political preferences. It will be because the Obama administration continues to make legal arguments that don’t pass the smell test.

The ugliness of this year’s presidential race makes The New York Times’ resident erstwhile conservative David Brooks wistful for Barack Obama. The irony is that David Brooks, Barack Obama, and their respective tribes bear much of the responsibility for the rise of Donald Trump.

“I miss Barack Obama,” Brooks laments, because “over the course of this campaign it feels as if there’s been a decline in behavioral standards across the board.” Brooks cites Hillary Clinton’s emails and some other stuff, but everyone knows he’s talking about The Donald. “Many of the traits of character and leadership that Obama possesses, and that maybe we have taken too much for granted, have suddenly gone missing or are in short supply. The first and most important of these is basic integrity. The Obama administration has been remarkably scandal-free.” By the time he’s done, Brooks upgrades Obama’s integrity to “superior.”

We all have difficulty seeing our blind spots. That’s why we call them what we call them. But Brooks’ obliviousness here is awe-inspiring.

Donald Trump has risen to the top of the GOP presidential field by appealing to resentments stoked by both political tribes. Even Brooks is even doing it, right there in his column.

Trump is riding resentments Obama has stoked by ruling as an autocrat. Rather than accept that voters elected a Republican Congress for the purpose of restraining his ambitions, Obama famously boasted he can act without Congress, because “I’ve got a pen and I’ve got a phone.”

He has repeatedly circumvented the democratic process and he knows it, as when he boasts, “I just took an action to change the law.” When challenged, he tries (with some success) to intimidate courts into writing tortured opinions in his favor. Still his executive overreach has been on the losing end of more unanimous Supreme Court rulings than either of his two immediate predecessors. Even allies admit he plays fast and loose with the rule of law.


When a president doesn’t play by the rules, he is telling his political opponents their votes don’t matter. That breeds resentment.

If you identify as a Democrat (and haven’t stopped reading in disgust), this is the part where you shout, “Don’t even talk to me about President Obama! Republicans are WORSE!! Bush started an immoral war!!” You know what? You’re right. And we’ll get to conservatives in a moment.

But if you are thinking such thoughts, then you have just revealed that you—yes, you—are responsible for the rise of Donald Trump.

If you give Obama a pass when he is dishonest or breaks the rules, because he seems like a good man, or is at least better than those guys; if you argue he had to change the law himself because Congress is dysfunctional and Republicans are unreasonable; if you lambast Bush for starting a war, but give Hillary a pass for both Iraq and Libya; then you are adopting one set of rules for your tribe and another set of rules for everyone else. That shows a lack of respect for people who disagree with you. They notice. They resent it.

And in swoops The Donald.

Trump is likewise riding the resentments conservatives have stoked of immigrants and Muslims. Millions of peaceful, hardworking immigrants are living in the United States in violation of America’s stupid and immoral immigration laws. There is definitely something wrong with this picture. But every time conservatives complain about those good people instead of those immoral laws, they turn immigrants into the “other” and encourage voters to blame immigrants for that and whatever other problems come to mind. When conservatives denounce as “amnesty” legislation that would free decent human beings from a greater threat to liberty than most conservatives will ever face from their government, they further stoke resentment of immigrants. In the process, conservatives encourage people who care about immigrants to turn a blind eye toward bad behavior by the other team, because at least that team seems to value the freedom and dignity of immigrants. And so conservatives stoke a vicious cycle of resentment.

Brooks doesn’t realize it, but he too is stoking resentments from which Trump draws power like Superman basking in the glow of the Earth’s yellow sun.

In putting Obama on a pedestal—“Obama radiates an ethos of integrity, humanity, good manners and elegance”—Brooks shows a remarkable gift for ignoring the president’s flaws. At the same time he criticizes Hillary Clinton’s “vaguely shady shortcuts” and the “unsightly characters floating around…the Clinton camp,” he blesses “team Obama” for successfully blocking such characters from the administration. Earth to David Brooks: Clinton took those shortcuts while she was Obama’s secretary of state. “Obamacare took coverage away from only a small minority of Americans,” Brooks writes, evidently unaware that the president repeatedly and knowingly lied about that part of ObamaCare.

Obama possesses “a sense of basic humanity,” Brooks writes, because he gave “a wonderful speech” at a mosque. I liked what I heard of that speech. But what about the innocent Muslim women and children Obama has killed with drone strikes, who far outnumber the number of children killed in Newtown, Connecticut? Or the fact that Obama has deported more immigrants than his predecessor?

You can’t revere Barack Obama and respect the dignity of all human beings, David. It just doesn’t work. No one made him seek power. No one made him use it in this way.

If Obama’s presidency has been “remarkably scandal-free,” the remarkable part is how many of his actions were never reported as scandal, perhaps because he belongs to the same tribe as most major media outlets. When The New York Times covers a president from its tribe differently than it would cover a president from the other tribe, and then absolves their tribesman of scandal, people notice. And they resent it.

The common thread in all these words and deeds, from both tribes, is that they affront the dignity of the “other.”

Every human matters. Every vote matters. No one in the political process is upholding those values, not even the politicians who pretend to be. Bernie Sanders has a stump speech and a viral video that purport to celebrate the dignity of every individual. Only they don’t, because Bernie’s entire schtick is to create an “out” group based on income, profession, and political views.

I have never been so glad to be a libertarian as I am this election cycle. It would be nice to see a few presidential candidates who disagree while demonstrating respect for the equal dignity of all people. It might just sap the demagogues of their power.

President Obama’s new budget includes a table showing the number of executive branch civilian employees the administration expects to have in 2017. With that, we can compare the growth in federal government employment over eight years of Obama (2009 to 2017) to eight years of President George W. Bush (2001 to 2009).

Federal civilian employment rose from 1,738,000 million in 2001, to 1,978,000 in 2009, to a proposed 2,137,000 in 2017. Thus, employment grew 13.8 percent under Bush and 8.0 percent under Obama, as shown by the bars on the left of the chart below.

Overall since 2001, federal civilian employment has increased by 399,000 workers, which is like a mid-sized city populated entirely by bureaucrats.

Perhaps the Bush increase stemmed from the build-up of Pentagon civilians to support the president’s war efforts? No, that was not it. The bars on the right show that the nondefense workforce grew 17.2 percent under Bush and 10.1 percent under Obama.    

If the next president wants to save some money, he or she should consider that the extra 399,000 workers since 2001 are costing taxpayers about $120,000 each in wages and benefits—that’s about $48 billion a year.

Introducing their intriguing work, Wei et al. (2015) write that “investigating climate-society relationships has long been a hot topic,” noting that “many studies have demonstrated the important roles of climate change in facilitating the rise or fall of ancient communities.” However, they report that “intense arguments regarding the economic effects of global warming” remain to be clarified in such investigations.

Against this backdrop, Wei et al. set out to investigate the long-term relationship between the climate and economy of China. More specifically, they derived a 2,130-year long record of the Chinese economy based on 1,091 records extracted from 25 books on Chinese history and economic history, spanning the period 220 BC to 1910 AD. This new proxy was then statistically analyzed in conjunction with historical proxies of Chinese temperature and precipitation previously compiled by Ge et al. (2013) and Zheng et al. (2006), respectively. And what did that analysis reveal?

The three Chinese researchers found that warm and wet climate periods coincided with more prosperous and robust economic phases (above-average mean economic level, higher ratio of economic prosperity, and less intense variations), whereas opposite economic conditions ensued during cold and dry periods (where the possibility of economic crisis was “greatly increased”) (see Figure 1 below). They also report that temperature was “more influential than precipitation in explaining the long-term economic fluctuations, whereas precipitation displayed more significant effects on the short-term macro-economic cycle.”

In concluding their paper Wei et al. write that, “from a deep time perspective, our study may provide new insight into the current intense arguments regarding the economic effects of global warming.” Indeed it does; and that insight reveals a warmer (and wetter) climate favors economic prosperity. Given this data-derived relationship, why are the leaders of so many nations hell-bent on halting any future rise in global temperature, especially when two millennia of climate and economic data suggest such a rise would benefit the economy? As the late Casey Stengel would have said, “doesn’t anybody know how to play this game?”

Figure 1. Series comparison between economic fluctuations and climate changes in China from BC 220 to AD 1910. Panel a: Decadal temperature anomaly for all of China during the period AD 1–1910 (Ge et al. 2013); the red curve is the low-pass filtered series. Panel b: Decadal precipitation over eastern China during the period 101–1910 (Zheng et al. 2006); the blue curve is the low-pass filtered series. Panel c: Winter half-year temperature anomaly series for eastern China during the period BC 210–AD 1920 with a 30-year resolution (Ge 2011). Panel d: Decadal macro-economic series during the period BC 220–AD 1910 in China; the black curve is the low-pass filtered series. The red and blue bars indicate typical episodes of prosperity and crisis periods (respectively). The gray and white areas delineate cold and warm phases, respectively. Figure from Wei et al. (2015).

 

References

Ge, Q., Hao, Z., Zheng, J. and Shao, X. 2013. Temperature changes over the past 2000 yr in China and comparison with the Northern Hemisphere. Climate of the Past 9: 1153-1160.

Wei, Z., Fang, X. and Su, Y. 2015. A preliminary analysis of economic fluctuations and climate changes in China from BC 220 to AD 1910. Regional Environmental Change 15: 1773-1785.

Zheng, J.Y., Wang, W.C., Ge, Q.S., Man, Z.M. and Zhang, P.Y. 2006. Precipitation variability and extreme events in eastern China during the past 1500 years. Terrestrial Atmospheric and Oceanic Sciences 17: 579-592.

Earlier this week, we lost a giant. Andrew Coulson, Senior Fellow in Education Policy at the Cato Institute, passed away after a fifteen-month battle with brain cancer. In the days that followed, colleagues, friends, and admirers paid tribute to his achievements, reminisced about his character and virtues, and reflected on his legacy. What follows is a compilation of those tributes.

Neal McCluskey remembers Andrew in an interview with Caleb Brown:

Adam B. Schaeffer, former colleague and adjunct scholar at the Cato Institute:

There is no one else beside Andrew Coulson that you must read to discover what reforms we need in education and why they will work. That is not hyperbole. There are many very sharp people who have contributed important thoughts on education reform, but you will get everything essential that you need from reading through Andrew’s collective works. […]

Andrew was a fine thinker and passionate advocate. But, as many have noted, he was also a kind man with a splendid sense of humor and relentless optimism. He remained immovably committed to his principles and the conclusions to which his great mind had led him. But he always engaged with a sense of magnanimity and humor, never bitter or angry. Even when I made a good deal of trouble for him with my lack of these qualities, Andrew stood by me. When he faced difficulties because of his principles, he always stood firm on those as well.

Adam concludes his tribute with a recommended reading list of Andrew’s works, which are among “all the wonderful gifts he’s left us.” 

Thomas A. Shull, former colleague at the Mackinac Center:

A key to all of this success was the unique temper of his commitment to reform. Instead of expressing the intensity of his passion in invective, Andrew channeled his passion into an unusual blend of productivity, hard research, humor and intellectual joy. I suspect this is what [columnist William] Raspberry sensed in Andrew — a genuine goodwill that characterized Andrew’s writing even as he was summarily proving you wrong. […] 

Andrew was a generous and talented human being who worked for freedom of choice for all children in education. This is surely tribute enough, but in Andrew’s case, I must add that he was a good man, and that he will be missed by virtually everyone who knew him. I join my colleagues at the Mackinac Center in wishing Andrew’s family, friends, coworkers and, most particularly, his wife, Kay Krewson, every solace in the days ahead.

Jay P. Greene, Distinguished Professor and Head of the Department of Education Reform at the University of Arkansas:

I first remember meeting Andrew and his wife, Kay, at a conference in Toronto in 2000. I have to admit that he felt out of place.  Here was this guy without any university, think tank, or other affiliation and without any formal training presenting on the history of markets in education. And people did not typically attend these meetings with spouses. Who was this guy?

As it turns out, this guy was a brilliant autodidact who “retired” after being an early programmer with Microsoft to devote his time to studying and advocating education reform. And he was really good at it.

The thing that struck me most about Andrew was his incredible optimism and quirky sense of humor. Liberty-oriented education activists tend to be on the losing side of policy battles. It can be downright discouraging. But Andrew never seemed discouraged or became bitter. It was a long game and he maintained a sunny optimism that freedom worked better and people would eventually gravitate towards what worked.

Doug Tuthill, President of Step Up for Students:

Andrew loved facts and logic.  He had an engineer’s mind and was relentlessly methodical in laying out his arguments.  I appreciated his commitment to civility and rationality in private and public discourse, and was always influenced, if not persuaded, by his reasoning and facts.

Andrew’s death is a huge lost for our movement.  I will always carry our discussions with me. 

Nick Gillespie, editor in chief of Reason.com:

Milton Friedman wrote of [Andrew’s book] Market Education: ”Encyclopedic in its coverage of the arguments for and against alternative modes of organizing schooling, readers will find this excellent book instructive whether they agree or disagree with his conclusion.” That captures Andrew’s intellectual contribution and his personality. He was provocative, learned, and engaging (even or especially to those with whom he disagreed).

At the core of Andrew’s reform ideas were two basic concepts. First, education has always been far more varied in its forms than we’ve come to appreciate and second, that parental and student choice should be front and center in all discussions. It’s a testament to his influence that each of these insights is becoming more popular and influential with every passing year. They allow us to create more varied and individualized forms of education while also minimizing social conflicts and anxieties over learning. 

Here is an interview Nick conducted with Andrew in 2011:

Expanding Choice through Tax Credits: Q&A with Cato’s Andrew Coulson

Lisa Snell, director of education policy, Reason Foundation:

It was my great fortune to work in education policy with Andrew toward a better education for all kids and to know he always held the line and set the pace for true markets in education. Market Education: The Unknown History is the book I tell everyone interested in education to start with. 

Matthew K. Tabor, editor of EducationNews.org:

Over the last year or so I had friendly exchanges with Mr. Coulson — and I followed along closely with the discussions I wasn’t a part of. They were master classes in wit, analysis and advocacy. That I had access to them at a cost of nothing more than my time was an almost-daily lottery win. I half-stalked the poor guy professionally, but I wasn’t about to waste the opportunity.

Through those back-and-forths about every facet of school choice and its related disciplines, I gained an incredible amount of knowledge from Mr. Coulson — and he exposed himself to be a good man. You can’t go to school for that. You don’t apply, pay tuition or take up space in a classroom, and there’s no certificate at the end. It takes more time, more work, and comes at a greater cost. It’s a lot harder to do. […]

Andrew Coulson has passed, leaving behind an impressive body of work and a legacy that’s a little part of the life force of hundreds of thousands of kids, their families and their communities. Those numbers are poised to multiply.

I still don’t know what, if any, official credentials he had. Someone might tell me, but I won’t bother to look them up. I don’t need to. I know that he advanced the work of countless others, including mine, and helped lead a successful movement that decades ago seemed impossible. He did it with humility, civility and a seriousness of purpose.

Darla Romfo, President of the Children’s Scholarship Fund:

It was only after hearing about Andrew’s death that I realized he must have been no more than 30 when he wrote the very compelling book, Market Education: The Unknown History. I knew when Ted Forstmann gave me a copy to read in 1999 that it must be an important book and that Andrew must be a very smart man since Ted, who was not one to lavish undeserved praise on anyone, insisted on how essential it was that I read Market Education before thinking I knew anything about education reform.

Andrew never disappointed. He was as nice as he was smart and very much a team player.

RIP Andrew. And may you find comfort, Kay, in the deep affection so many have for Andrew. 

Joshua Thompson, attorney at the Pacific Legal Foundation

I have long been an admirer of Andrew Coulson’s work — even before I began my career at Pacific Legal Foundation. His book, Market Education, has long been a staple on my bookshelf. Andrew and I first crossed paths professionally when I posted this critique of an op-ed he wrote in the Philadelphia Inquirer. His response led to a very a interesting back and forth, which is summarized here. Despite our minor disagreement, that conversation led us to more closely follow the other’s work.  We’d exchange emails now and then, usually when one of us had something interesting to say about school choice. For National School Choice Week last year, Andrew Coulson appeared with me on this PLF podcast. The podcast remains one of our most popular ever. Andrew and I discuss a lot of the contemporary issues facing advocates of educational freedom today.

Michael Q. McShane, director of education policy at the Show-Me Institute

Andrew’s writing was the first to introduce me to the idea that school choice might not just be good for kids academically, but could help us create more harmonious communities. If we don’t have to fight each other over what gets taught in history or science class, and we respect our fellow citizens’ rights to instruct their children in the way that best fits their needs and their values, we can get along better with each other. What a great idea.

We truly do stand on the shoulders of giants.  God bless his memory.

The idea that government could redistribute income willy-nilly with impunity did not originate with Senator Bernie Sanders. On the contrary, it may have begun with two of the most famous 19th Century economists, David Ricardo and John Stuart Mill.   Karl Marx, on the other side, found the idea preposterous, calling it “vulgar socialism.”

Mill wrote, “The laws and conditions of the production of wealth partake of the character of physical truths.  There is nothing optional or arbitrary about them… . It is not so with the Distribution of Wealth.  That is a matter of human institution only.  The things once there, mankind, individually, can do with them as they like.”[1]

Mill’s distinction between production and distribution appears to encourage the view that any sort of government intervention in distribution is utterly harmless – a free lunch.  But redistribution aims to take money from people who earned it and give it to those who did not.  And that, of course, has adverse effects on the incentives of those who receive the government’s benefits and on taxpayers who finance those benefits.

David Ricardo had earlier made the identical mistake. In his 1936 book The Good Society (p. 196), Walter Lippmann criticized Ricardo as being “not concerned with the increase of wealth, for wealth was increasing and the economists did not need to worry about that.” But Ricardo saw income distribution as an interesting issue of political economy and “set out to ascertain ‘the laws which determine the division of the produce of industry among the classes who concur in its formation.’

Lippmann wisely argued that, “separating the production of wealth from the distribution of wealth” was “almost certainly an error. For the amount of wealth which is available for distribution cannot in fact be separated from the proportions in which it is distributed… . Moreover, the proportion in which wealth is distributed must have an effect on the amount produced.” 

The third classical economist to address this issue was Karl Marx.  There were many fatal flaws in Marxism, including the whole notion that a society is divided into two armies – workers and capitalists.[2]  Late in his career, however, Marx wrote a fascinating 1875 letter to his allies in the German Social Democratic movement criticizing a redistributionist scheme he found unworkable.  In this famous “Critique of the Gotha Program,” Marx was highly critical of “vulgar socialism” and considered the whole notion of “fair distribution” to be “obsolete verbal rubbish.”  In response to the Gotha’s program claim that society’s production should be equally distributed to all, Marx asked, “To those who do not work as well? … But one man is superior to another physically or mentally and so supplies more labor in the same time, or can labor for a longer time… . This equal right is an unequal right for unequal labor… It is, therefore, a right to inequality…”  

Yet Marx offered a glimmer of utopian hope about the future in which things would become so abundant that distribution would no longer be a matter of concern: “In a higher phase of communist society … after the productive forces have also increased with the all-around development of the individual, and all the springs of cooperative wealth flow more abundantly – only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banner: From each according to his ability, to each according to his needs!”

That was not a prescription but a warning: For the foreseeable future Marx knew nothing would work without work incentives. If income were equally distributed to “those who do not work,” why would anyone work?

Contemporary public economics – “optimal tax theory” and the newest of the “new welfare economics” – also teaches that to tax a man “according to his abilities” would give able men a very strong incentive to use their skills to hide their earnings (and therefore their abilities) from tax collectors.  This predictable response to tax penalties on high earnings is confirmed by economic research on the elasticity of taxable income.  

Distributing government spending “to each according to his needs” must likewise give potential recipients a strong incentive to exaggerate their needs.  People who got caught doing that used to be called “welfare cheats” and considerable cheating still goes on in food stamps, Medicaid, etc.  The Earned Income Tax Credit, for example, gives low-income working people an extra incentive to not report cash income from tips, casual labor or illicit activities.

In The Undercover Economist, Tim Harford rightly notes that “when economists say the economy is inefficient, they mean there’s a way to make somebody better off without harming anybody else” (called “Pareto optimality”).  But argues that Nobel Laureate Kenneth Arrow figured out a way to efficiently redistribute income with “appropriate lump-sum taxes and subsidies that puts everyone on equal footing.” As Harford says, “a lump-sum tax doesn’t affect anybody’s behavior because there’s nothing you can do to avoid it.”

Unfortunately, Harford says “an example of a lump-sum redistribution would be to give eight hundred dollars to everybody whose name starts with H.”  That simply shows that if the subsidies were not ridiculously random then the subsidies will affect behavior and will not be lump-sum.  The government could collect a lump-sum tax of $800 from every adult and then send a lump-sum subsidy of $800 to every adult with no net effect, for example, but why do that?  If the goverenment tried to tax people on the basis of abilities or to subsidize on the basis of needs, even Marx knew that would have a terrible effect on incentives.

The whole idea was curtly dismissed by another Nobel Laureate, Joseph Stiglitz, in his 1994 book Whither Socialism? (p. 46): “The ‘old new welfare economics’ assumed that lump-sum redistributions were possible,” wrote Stiglitz; “The ‘new new welfare economics’ recognizes the limitations on the government’s information.”

The reason governments cannot simply take money from some people according to how able they are, and give it to others according to how needy they are, is because people who were aware of that plan would not be foolish enough to accurately reveal their abilities and needs.   Actual taxes and transfer payment distort behavior in ways that undermine economic progress and commonly produce results (such as trapping people in poverty) that are the opposite of their stated intent.

 *  *  *  *  *  

[1]  Quoted in Lewis S. Feurer’s introduction to John Stuart Mill, On Socialism, Buffalo, Prometheus Books, 1987, p. 22.

[2] “It would be convenient if ‘workers’ and ‘capitalists’ formed two distinct groups; however in practice there is substantial overlap of the group of workers and the group of owners of capital equipment and other property… . Despite this, theorists have devoted much attention to models of imaginary economies with just two factors of production, labor and capital, to suggest conclusions about the proportions of total income that will be channeled to each of the two factors and their owners.” D.G. Champernowne & F.A. Cowell, Economic Inequality and Income Distribution, Cambridge U.K.: Cambridge University Press, 1998, p. 123.

 

The potential negative impact of immigrants on American political and economic institutions is the best argument against liberalized immigration and the economic, social, national security, and criminal objections are not convincing.  Michael Clemens and Lant Pritchett dig into this argument, which they call the “Epidemiological Case for efficient migration restrictions,” and find it mostly wanting (their paper is the best I’ve read in a long while).  I’ve co-written an academic journal article, Cato policy paper, and other work about how immigration could affect institutions.  There is more evidence that immigration improves institutions than that it worsens them although there is still much work to be done on this issue and questions remain.

But there is evidence that emigration improves a source country’s institutions.  Fredrik Segerfeldt summarizes some of the evidence in his new book for the Adam Smith Institute in the UK.  In Chapter 6 of his book, Segerfeldt observes:

Mexican migrants play an important role in shaping political atti­tudes in the country, both through social remittances and after returning home. Political participation increases, democratic com­petition intensifies, it becomes more difficult for leading members of the party in power to enrich themselves and the chance that the rul­ing coalition will retain power decreases. In short, Mexico’s exodus makes it more democratic.

Although much of the research above deals with Mexico, there are other results indicating that emigration can strengthen democracy. In a macro study of a large number of poor countries, economists find that emigration increases both democracy and economic freedom in the sending country.

How does emigration improve Mexican economic and political institutions?  By breaking up cronyist and interventionist political arrangements:

Emigration can also help to break up or at least weaken governance based on patronage. In such countries voters tend to vote for the rul­ing party, because otherwise they risk losing the benefits that the power distributes. Entire communities will be dependent on the rul­ing party, which impairs democracy. But when people in a commu­nity receive income that is not from the state or the ruling party, citi­zens become more independent and can therefore vote for the oppo­sition if they want to. In Mexico, remittances reduce the support for the PRI, the party which, with the help of patron-client methods, managed to retain control of the country during most of the 20th cen­tury (between 1929 and 2000).

Migration and remittances may also be a way to break up old hierar­chies based on class and ethnicity. In San Pedro Pinula in Guatemala, for example, residents of the Mayan people, with the help of both returning migrants and remittances, have slowly but surely been able to challenge the ethnic underclass role they had for five centu­ries. In the oases of southern Morocco, the Haratin, poor black, land­less workers, have enhanced their status thanks to remittances from abroad.

Segerfeldt’s summary of that research can help explain the important finding by Joshua C. Hall that the ability to emigrate is correlated with improvements in source country economic freedom: 

Exitability, a variable created by Brown (2014) to capture how easy it is for citizens to “vote with their feet” is related to the change in economic freedom from 1980 to 2010 in a statistically significant manner across all specifications. This provides some indirect evidence to the importance of “exit” versus “voice” with respect to the question of institutional reform.

Emigration benefits governance in sending countries, increasing the returns from liberalized immigration policies in the developed world.  This is an exciting time to be working on how immigrants affect economic and political institutions.   

Many articles in recent years have expressed concern about Pentagon bloat. Mackenzie Eaglen called for streamlining the Pentagon’s “army of bureaucrats.” Ray Mabus said “Twenty percent of the Pentagon budget, one dollar out of five, is spent on … the Office of the Secretary of Defense and the defense agencies … Pure overhead.”

Robert Gates said the Pentagon is a “gargantuan, labyrinthine bureaucracy,” where 40 percent of spending goes to overhead, and there are 30 layers of staff under the secretary. Fareed Zakaria called the Pentagon “some kind of gigantic socialist enterprise.”

My favorite bureaucracy story is the recent one about the admiral in charge of navy intelligence who has not been allowed to see any secret intelligence for two years. That is pretty absurd, even for a socialist enterprise.

One measure of Department of Defense (DoD) bureaucracy is the number of civilian (non-uniformed) employees, as shown in Chart 1. (Data from the new federal budget and prior ones).

The number of DoD civilians soared from 659,000 in 2007 to 771,000 in 2011, but then declined to 738,000 by 2016. The peak and fall generally followed the peak and fall in the numbers of uniformed service members over those years.

However, Chart 2 shows that there has been an upward trend in the ratio of DoD civilians to uniformed. In President Obama’s first year of 2009, there were 703,000 civilians and 1.54 million uniformed, for a ratio of 0.46. In 2016 there were 738,000 civilians and 1.34 million uniformed, for a ratio of 0.55.

The relative increase in the civilian bureaucracy is a concern. One might think that Pentagon productivity would have increased because of advances in technology. Shouldn’t procurement be more efficient these days, as we’ve moved from paper forms to electronic databases? Apparently, such gains from technology have been dissipated elsewhere. John Lehman says: “With so many layers and offices needed to concur on every decision, it now takes an average of 22½ years from the start of a weapons program to first deployment, instead of the four years it took to deploy the Minuteman ICBM and Polaris submarine missile system in the Cold War era.”

Aside from wasted cost, the more bureaucratic bloat there is, the more it saps the energies of our uniformed service members. John Lehman estimates that “roughly half of all uniformed personnel serve on staffs that spend most of their time going to meetings and responding to tasks from the hundreds of offices that have grown like mold throughout the vast Defense Department.” The fault, of course, lies not with the service members, but with the complex and top-heavy system that Congress and Pentagon leaders have built over the decades.

Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

First China. Now the U.S.

It was big news last November when it was revealed that China had been under-reporting its coal consumption by nearly 20 percent. The big implication was that China’s greenhouse gas emissions were also much larger than being reported, complicating the (then) upcoming U.N. climate negotiations in Paris.

Now comes evidence that the U.S. has been underreporting its methane emissions—a potent greenhouse gas—by some 50 percent or more.  And what’s worse, is that over the past decade or so, instead of methane emissions having declined by about 10 percent as reported by the EPA, they have in fact grown by more than a whopping 30 percent. Not only would this information also have (had it been available) complicated the U.N. Paris talks, but it would have taken a lot of the shine off the U.S. emissions reduction efforts that President Obama was touting at the conference last December.

The new evidence is presented in a just-published paper in the scientific journal Geophysical Research Letters by a team led by Harvard PhD candidate Alexander Turner. Turner and colleagues examined several measures of methane emissions occurring in the U.S. (including in situ measurements and remote satellite observations) and concluded that EPA estimates were way off. They wrote:

National inventory estimates from the US Environmental Protection Agency (EPA) indicate no significant trend in US anthropogenic methane emissions from 2002 to present. Here we use satellite retrievals and surface observations of atmospheric methane to suggest that US methane emissions have increased by more than 30% over the 2002-2014 period… This large increase in US methane emissions could account for 30-60% of the global growth of atmospheric methane seen in the past decade.

The implications are huge—at least when it comes to our advertised role as a supposed leader in climate change mitigation efforts.

Consider this soaring rhetoric from the President in his opening remarks to the U.N.’s Paris climate conference last December:

I’ve come here personally, as the leader of the world’s largest economy and the second-largest emitter, to say that the United States of America not only recognizes our role in creating this problem, we embrace our responsibility to do something about it.

Over the last seven years, we’ve made ambitious investments in clean energy, and ambitious reductions in our carbon emissions.  We’ve multiplied wind power threefold, and solar power more than twentyfold, helping create parts of America where these clean power sources are finally cheaper than dirtier, conventional power.  We’ve invested in energy efficiency in every way imaginable. We’ve said no to infrastructure that would pull high-carbon fossil fuels from the ground, and we’ve said yes to the first-ever set of national standards limiting the amount of carbon pollution our power plants can release into the sky.

The advances we’ve made have helped drive our economic output to all-time highs, and drive our carbon pollution to its lowest levels in nearly two decades…

For our part, America is on track to reach the emissions targets that I set six years ago in Copenhagen – we will reduce our carbon emissions in the range of 17 percent below 2005 levels by 2020.  And that’s why, last year, I set a new target:  America will reduce our emissions 26 to 28 percent below 2005 levels within 10 years from now.

In light of the data contained within the new Turner et al. report, Obama’s statements about greenhouse gas emissions are wrong.

Here’s why.

EPA reports that methane emissions are about 25 times more potent than the equivalent amount of carbon dioxide emissions and when taking that into account, methane emissions make up about 10 percent of the total of all U.S. greenhouse gas emissions.

The EPA also thinks methane emission have been on the decline:

Methane (CH4) emissions in the United States decreased by almost 15% between 1990 and 2013. During this time period, emissions increased from sources associated with agricultural activities, while emissions decreased from sources associated with the exploration and production of natural gas and petroleum products.

But the Turner team’s new evidence is that the emissions of this potent greenhouse gas have been rapidly rising—contrary to the EPA claims (Figure 1).

  

Figure 1. U.S. methane emissions according to EPA and three other studies (figure adapted from Turner et al., 2016).

 

A significant and sizeable change such as this in the trajectory of the second most prevalent greenhouse gas emitted in the U.S. has implications on the overall trajectory of the sum total of all U.S. greenhouse gas emissions.

Figure 2 shows the impact. In the left hand-panel are the EPA’s numbers for all greenhouse gas emissions (carbon dioxide, methane, nitrous oxide, fluorinated gases), while the right-hand panel reflects the new methane numbers from Turner’s study. While the difference may not look like much, notice that the apparent decline in total emissions since 2005 is less in the right-hand panel than in the left.

 

Figure 2. U.S. greenhouse gas emissions, 1990-2013. Left-hand chart shows data for greenhouse gas according to EPA; right-hand chart same as left-hand except that methane data derived from Turner et al. is included (data source: EPA).

 

Figure 3 shows the post-2005 evolution of total U.S. greenhouse gas emissions in greater detail. Also included in Figure 3 are the promised targets that President Obama made at the U.N.’s Copenhagen climate conference in 2009 (a reduction of 17% below 2005 emissions by 2020) and last December in Paris (a reduction of 26-28% below 2005 total by 2025).

 

Figure3. Total greenhouse gas emissions from the U.S. from 1990-2013 according to data form the EPA (in black) and modified to account for methane emissions reported in Turner et al. (in red). Also included are the Copenhagen and Paris targets promised by president Obama (in blue).

 

[Note: What’s not included in Figure 3 are numbers for U.S. greenhouse gas emissions totals from 2014 and 2015 because the EPA hasn’t included them in their database yet.  However, indications are that 2014 emissions were higher than 2013 emissions and that 2015 emissions were about equivalent to 2014 numbers.]

From the data behind Figure 3, we can reassess the EPA’s claim that “Greenhouse gas emissions in 2013 were 9 percent below 2005 levels.” What we find instead, using the new data, is that greenhouse gas emissions in 2013 were just 5 percent beneath 2005. Conservatively assuming that the emissions from 2014 and 2015 were the same as in 2013, then this leaves only 5 years to drop our national emissions another 12 percent. Fat chance.

And just last week a new analysis showed that there was no way that the U.S. was going to reach its Paris promised goal of reducing GHG emissions by 26-28 beneath 2005 numbers by 2025 without additional strong measures (measures that don’t seem to be in the cards)—even with some creative accounting and overly hopeful assumptions.  The Supreme Court’s stay of the Clean Power Plan most certainly didn’t help the situation. 

Now, with the new data from Turner and colleagues, it looks like we aren’t going to have to wait to 2025 to witness the failure, it’ll be plainly evident by 2020 (if it’s not already). 

As to what may be behind the apparent strong growth in U.S. methane emissions in recent years, the Turner author offers:

The increase is largest in the central part of the country. The US has seen a 20% increase in oil and gas production and a 9-fold increase in shale gas production from 2002 to 2014 but the spatial pattern of the methane increase seen by GOSAT does not clearly point to these sources. More work is needed to attribute the observed increase to specific sources.

The last sentence is rather telling as it seems to indicate the authors are trying to blame fracking, but just haven’t done enough work to do so at this time.

Considering that the EPA contends that methane “emissions decreased from sources associated with the exploration and production of natural gas and petroleum products,” it’ll be interesting to see how this plays out. 

But two things are for sure; 1) its hard to grow the economy and reduce greenhouse gas emissions, and 2) U.S. claims to have made great strides in doing so are on shaky ground.

Obama’s can burnish our “leadership role” as climate do-gooders as much as he wants, but the facts are telling a different story—a story which may prove the undoing of his U.N. climate promises.

Reference:

Turner, A.J., et al., 2016. A large increase in US methane emissions over the past decade inferred from satellite data and surface observations. Geophysical Research Letters, doi: 10.1002/2016GL067987.

The Seattle Times reports that more super PAC money has been spent in express support of Sen. Bernie Sanders than for either of his Democratic rivals, including Hillary Clinton. For the record, Sanders would happily abolish super PACs by working to overturn one of the two major court rulings that gave rise to the super PAC:

Any Supreme Court nominee of mine will make overturning Citizens United one of their first decisions.

— Bernie Sanders (@BernieSanders) January 22, 2016

Super PACs funded by billionaires buy elections. Ordinary people don’t vote. We have an economic and political crisis in this country.

— Bernie Sanders (@BernieSanders) January 27, 2016

Of course, that’s not quite how it works, but you get the idea. A President Sanders would do his level best to make sure that he becomes the last candidate to receive the benefits of supportive speech facilitated by the super PACs.

The fight for free political speech is a regular topic on the Cato Daily Podcast (subscribe!: iTunes / Google Play / CatoAudio). I recently spoke with Paul Sherman of the Institute for Justice about Bernie’s massive support from super PACs and common misconceptions about how the groups actually function.

 

Last night, Bernie Sanders and Donald Trump won their respective parties’ presidential primary elections in New Hampshire.  There’s a lot that can be and has been said about this outcome and what it means for American politics.  One interesting thing I’d like to point out is that these candidates are by far the two most protectionist candidates running for either party’s nomination, and they are the only candidates that have made opposition to free trade a part of their campaign’s message.

The conventional wisdom is that good trade policy fairs poorly during election season.  Foreign trade is an easy scapegoat for complex economic problems, and restricting trade is a simple “solution.”  It’s no surprise that the two most populist candidates are also the ones trumpeting an anti-trade message.

At the same time, however, trade is rarely ever an issue that animates voters.  Regardless of their preferences on trade policy, other issues almost always take precedence in voters’ minds when they go to the polls.  It’s endlessly frustrating to free traders that, even though it doesn’t help politicians get elected, they consistently promote harmful myths about international trade during their campaigns.

I’m not sure that was the case in New Hampshire.  During last night’s news coverage, I watched a reporter from one of the cable news networks interview voters.  When asked why they supported Donald Trump, one couple said their biggest concern was that jobs were going to Mexico.

I suspect we’ll hear more anti-trade rhetoric from both Trump and Sanders in the coming weeks as they try to differentiate themselves from their competition and cash in on nativist sentiments.  We’ll have to wait and see if it drives the other candidates toward more illiberal trade policy positions as well, or if it gives them cover to stake out more moderate positions.

Last night, while everyone was focused on New Hampshire, the Supreme Court issued an order that is likely to end up being more consequential than the primary victories of Donald Trump and Bernie Sanders: By a vote of 5-4, it stayed the implementation of the so-called Clean Power Plan. A group of states led by West Virginia challenged the regulation, and eventually sought a stay from the high court pending resolution of that lawsuit in the lower courts. 

As I described in a recent op-ed:

In June 2014, the Environmental Protection Agency proposed a new rule for regulating power-plant emissions. Despite significant criticism, on August 3, 2015, it announced a final rule. It gives states until 2018 — it “encourages” September 2016 — to develop final plans to reduce carbon dioxide emissions, with mandatory compliance beginning in 2022. EPA cites Section 111 of the Clean Air Act as justification for the Clean Power Plan, but that section can’t give the agency such authority. Section 111(d) doesn’t permit the government to require states to regulate pollutants from existing sources when those pollutants are already being regulated under Section 112, as those deriving from coal-fired plants are.

The Supreme Court’s stay is a welcome development. The regulations constitute an unprecedented assertion of agency authority, so the Court had to step in to prevent irrevocable harm to the energy sector. As we saw last term in Michigan v. EPA, often it’s too late to fix administrative abuses judicially after the fact. Lawlessness must be nipped in the bud.

And this move may have foreshadowed the death knell of the Clean Power Plan altogether; the only question is whether the justices will have a chance to strike it down for good before the next president reverses it.

For more commentary, see Jonathan Adler.

Washington Post article recently highlighted the impressive but uneven progress that Africa has made in its struggle against poverty. The article looked at questions pertaining to material wellbeing, including “the number of times that an average family had to go without basic necessities.” On that measure, Cape Verde saw the most rapid improvement. And so the article asks, “What did Cape Verde do right?” 

Cape Verde’s superior infrastructure, the Washington Post explains, is partly responsible for that country’s economic progress. Surely that cannot be the full answer. The United States did not have an interstate road network till the Eisenhower Administration – decades after the United States became the richest and most powerful country in the world. Similarly, Germany was the most powerful and richest country in Europe a long time before constructing its famous autobahns. 
  
In fact, it is Cape Verde’s policies and institutions that we should look to as reasons for that country’s superior performance relative to, say, Liberia. According to the Center for Systemic Peace, Cape Verde is a democracy. Liberia, in contrast, is far behind.

Freedom House, similarly, gives Cape Verde a perfect score on political rights, while Liberia is two points behind them on a seven-point scale.

The Economic Freedom Index only began tracking Cape Verde in 2010, but in that time, its freedom to trade has practically caught up with the United States, where freedom to trade is sadly declining.

The Washington Post’s omissions matter. Focusing on infrastructure development while ignoring political and economic freedoms can lead to what economist William Easterly calls authoritarian development. On this theory, simply furnishing dictators and corrupt governments with technical expertise and aid money will improve conditions for the poor. Evidence shows that this approach to development chiefly empowers dictators while the poor continue to suffer. 

Free development, instead, focuses on establishing or strengthening political and economic freedoms for the poor. If given the freedom to do so, ordinary people have a remarkable ability to hold their governments accountable and to improve their lot through production and exchange. 

Liberia’s political institutions are moving in the right direction, but have some catching up to do. Cape Verde, on the other hand, is an excellent example of rapid development under conditions of relative political and economic freedom.  

When the Cold War closed many people believed that history had ended. Europe was certain to be free and undivided.

Alas, it hasn’t worked out that way. But no worries. At least NATO officials are happy. Following Russian intervention in Georgia and Ukraine the alliance rediscovered a sense of purpose through its old enemy, Moscow.

The Obama administration just announced a multi-billion dollar program to bolster U.S. forces in Eastern Europe. Now a Rand Corporation report warns that Russia could easily overrun the three Baltic members of NATO is raising additional alarm.

Said David A. Shlapak and Michael W. Johnson: the “unambiguous” result of a series of war games was that “As currently postured, NATO cannot successfully defend the territory of its most exposed members.” The Rand researchers recommended a substantial allied military presence to deter Moscow.

Shalapak and Johnson dismissed the cost, estimated at around $2.7 billion annually, but more commitments require more force structure, and that burden almost certainly would fall upon America rather than the Europeans. Just like the administration’s new initiative for Eastern Europe involving a single brigade.

Their conclusion illustrates the folly years ago of treating NATO as a social club and inducting new members which were irrelevant to the continent’s security and possessed minimal military capabilities. Now the alliance realizes that it is obligated to war against nuclear-armed Russia on behalf of essentially indefensible countries.

Equally striking is how NATO membership has discouraged the Baltic nations from doing much for their own defense. Last year Latvia and Lithuania devoted 1.06 percent and 1.14 percent, respectively, of GDP to the military. Estonia was 2.04 percent—the first time Tallinn met the official NATO standard.

Yet the surging fear over Russian adventurism is misplaced. Vladimir Putin’s behavior is bad, but poses little threat to America, “old” Europe, or even most of Russia’s neighbors.

He has taken Moscow back to the Russian Empire, not the Soviet Union. His government demands respect for its status, protection of Russia’s borders, and consideration of its interests.

Mikhail Saakashvili’s Georgia was actively anti-Russian, pursued close ties with America, and sought membership in NATO—all certain to antagonize Moscow. Ukraine always mattered more to Moscow than Georgia or the Baltics for historical and cultural reasons, as well as the naval base of Sebastopol. Putin acted only after Europe pushed a trade agreement to reorient Ukraine away from Russia and both Brussels and Washington backed a street revolution against the elected president who leaned toward Russia.

Even then, Putin sought to weaken, not conquer, Ukraine. His brutal response was murderous and unjustified, but militarily on par with U.S. interventions.

Putin continues to demonstrate no interest in ruling those likely to resist Russia’s tender mercies. Seizing the Baltic states likely would generate substantial popular resistance.

Moreover, as weak nations currently containing no foreign troops, the Baltics pose no potential threat to Russia. Finally, the Baltic ethnic Russian populations, though significant, demonstrate little sentiment for joining Mother Russia. They prefer cultural connection to political affiliation, creating a poor target for the sort of destabilizing tactics deployed against Ukraine.

So what would Russia gain from attacking the Baltics? A recalcitrant, majority non-ethnic Russian population. A possible temporary nationalist surge at home. A likely short-lived victory over the West. 

As I argue in National Interest: “The costs would be far greater. Grabbing the Baltics likely would spur population exodus and trigger economic collapse. Launching a war without the convincing pretext present in the cases of Georgia and Ukraine might leave the Russian public angry over the retaliation certain to come.”

Worse, Moscow certainly would rupture economic and political relations with the U.S. and Europe and probably start a losing conventional war with NATO. Even more frightening would be the prospect of a nuclear conflict.

The U.S. should stop making defense promises which serve the interests of other nations rather than America. The Europeans should prepare their own defense.

The Gallup Poll has a new estimate of the number of libertarians in the American electorate. In their 2015 Governance survey they find that 27 percent of respondents can be characterized as libertarians, the highest number it has ever found. The latest results also make libertarians the largest group in the electorate, as compared to 26 percent conservative, 23 percent liberal, and 15 percent populist.

For more than a dozen years now, the Gallup Poll has been using two questions to categorize respondents by ideology:

  • Some people think the government is trying to do too many things that should be left to individuals and businesses. Others think that government should do more to solve our country’s problems. Which comes closer to your own view?
  • Some people think the government should promote traditional values in our society. Others think the government should not favor any particular set of values. Which comes closer to your own view?

Combining the responses to those two questions, Gallup found the ideological breakdown of the public shown below. With these two broad questions, Gallup consistently finds about 20 percent of respondents to be libertarian, and the number has been rising.

Two years ago David Kirby found that libertarians made up an even larger portion of the Republican party.

So why isn’t all this supposed libertarian sentiment being reflected in candidates and elections? There have been plenty of analyses in the past week, including my own, about why Rand Paul didn’t attract this potentially large bloc of libertarian voters. Maybe people don’t see issues as equally salient; some libertarians may wish that Republicans weren’t so socially reactionary, but still vote Republican on the basis of economic issues. Some, as Lionel Shriver writes in the New York Times, feel “forced to vote Democratic because the Republican social agenda is retrograde, if not lunatic — at the cost of unwillingly endorsing cumbersome high-tax solutions to this country’s problems.” 

For now I just want to note that there are indeed a lot of voters who don’t fit neatly into the red and blue boxes. The word “libertarian” isn’t well known, so pollsters don’t find many people claiming to be libertarian. And usually they don’t ask. But a large portion of Americans hold generally libertarian views – views that might be described as fiscally conservative and socially liberal. 

David Brooks wrote recently that the swing voters in 2016 will be people who don’t think big government is the path to economic growth and don’t know why a presidential candidate would open his campaign at Jerry Falwell’s university. Those are the voters who push American politics in a libertarian direction. David Bier and Daniel Bier wrote last summer about how many policy issues show a libertarian trend over the past 30 years. Find a colorful chart illustrating their findings here.

Politics is often frustrating for libertarians, never more so than during this presidential election when the leading presidential candidates seem to be a protectionist nationalist with a penchant for insult, a self-proclaimed socialist, and a woman who proudly calls herself a “government junkie.” But polls show libertarian instincts in the electorate, just waiting for candidates who can speak to them. 

Read more about the libertarian vote in our original study or in our 2012 ebook.

We have good news and bad news.

The good news is that President Obama has unveiled his final budget.

The bad news is that it’s a roadmap for an ever-growing burden of government spending. Here are the relevant details.

  • The President wants the federal budget to climb by nearly $1.2 trillion over the next five years.
  • Annual spending would jump by an average of about $235 billion per year.
  • The burden of government spending would rise more than twice as fast as inflation.
  • By 2021, federal government outlays will consume 22.4% of GDP, up from 20.4% of economic output in 2014.

I guess the President doesn’t have any interest in complying with Mitchell’s Golden Rule, huh?

While all this spending is disturbing (should we really step on the accelerator as we approach the Greek fiscal cliff?), the part of this budget that’s really galling is the enormous tax increase on oil.

As acknowledged in a report by USA Today, this means a big tax hike on ordinary Americans (for what it’s worth, remember that Obama promised never to raise their taxes).

Consumers will likely pay the price for President Obama’s proposed $10 tax per-barrel of oil, an administration official and a prominent analyst said Thursday. Energy companies will simply pass along the cost to consumers, Patrick DeHaan, senior petroleum analyst for GasBuddy.com, which tracks gas prices nationwide, said in an interview with USA TODAY. ….a 15-gallon fill-up would cost at least $2.76 more per day.  It would also affect people who use heating oil to warm their homes and diesel to fill their trucks.

Isn’t that wonderful. We’ll pay more to fill our tanks and heat our homes, and we’ll also pay more for everything that has oil as an input.

While middle-class consumers will see a big hit on their wallet, the Washington Post explains that Obama wants the new tax revenue to fund an orgy of special-interest spending.

…the tax would raise about $65 billion a year when fully phased in. …The administration said it would devote $20 billion of the money raised to expand transit systems in cities, suburbs and rural areas; make high-speed rail a viable alternative to flying in major regional corridors and invest in new rail technologies like maglev; modernize the nation’s freight system; and expand the Transportation Investment Generating Economic Recovery program launched in the 2009 economic stimulus bill to support local projects. …The budget would also use roughly $10 billion per year in revenues for shifting how local and state governments design regional transportation projects. Obama would also propose investing just over $2 billion per year in “smart, clean vehicles” and aircraft.

More railway money pits and Solyndra-style boondoggles? Gee, what could go wrong?

By the way, the Administration is claiming that the big new energy tax won’t really hurt our pocketbooks because oil prices have been falling. Here are parts of a story by the Washington Examiner.

President Obama said the oil supply glut that has forced prices down to about $30 a barrel makes his proposal to levy a $10 per-barrel tax on crude oil timely. …the White House appears to be of the view that consumers would have an easier time paying it during record low prices.

Gee, how thoughtful of them.

But is anybody under the illusion that the politicians in Washington will repeal the tax when energy prices rise?

Anybody? Bueller?

Here’s one last gem. As cited by the Los Angeles Times, the President offered this pithy statement.

“Rather than subsidize the past, we should invest in the future,” Obama said during his weekly Saturday address.

Now think about what he’s saying. Obama wants us to believe that the absence of a tax today and in the past is actually a subsidy!

Not that we should be surprised. Our friends on the left have a strange habit of arguing that we’re getting a subsidy when we’re allowed to keep our own money. Indeed, they even have a concept called “tax expenditures” that is based on that perverse notion.

P.S. The folks at Politico have a story about Obama’s plan, and there’s a bit of speculation about how it could become an issue for Hillary Clinton in the 2016 presidential race.

…the proposal could be particularly awkward for Hillary Clinton, who has embraced most of Obama’s policies but has also vowed to oppose any tax hikes on families earning less than $250,000 a year.

I think this analysis is absurd.

Hillary will promise all through the campaign that she opposes tax hikes on everyone other than the rich. But then, just like Obama, she’ll break that promise if she gets to the White House.

P.P.S. Lest anyone think I’m taking a partisan jab at Hillary because she’s a Democrat, keep in mind that I’m terrified that Republicans may decide (not withstanding their “dead on arrival” comments) to like Obama’s scheme. After all, many of them last year were very tempted by gas tax hikes to fund more pork-barrel spending.

P.P.P.S. And what’s really depressing is that I explained just last month that it would be very simple to shrink the relative burden government (and also balance the budget very quickly if that’s what you care about) if the federal budget “only” grew by the rate of inflation.

P.P.P.P.S. One final comment is that I might be tempted to accept an oil tax in exchange for the abolition of a tax - perhaps the death tax or capital gains tax - that collects a similar amount of revenue.

But I’d have two condition: First, the net result has to be a tax system that is less destructive to prosperity. Second, I’d have to be convinced that the swap wouldn’t backfire, with politicians somehow winding up with more power and/or money when the dust settles (which has been my concern about the Rand Paul and Ted Cruz plans to impose a value-added tax, even though their plans theoretically would produce a much less destructive tax system).

New York Attorney General Eric Schneiderman is pursuing an investigation of the Exxon Corporation in part for making donations to think tanks and associations like the American Enterprise Institute and American Legislative Exchange Council, which mostly work on issues unrelated to the environment but have also published some views flayed by opponents as “climate change denial.” Assuming the First Amendment protects a right to engage in scholarship, advocacy, and other forms of supposed denial, it is by no means clear that information about such donations would yield a viable prosecution. Which means, notes Hans Bader of the Competitive Enterprise Institute, that the New York probe raises an issue of constitutional dimensions not just at some point down the road, but right now:

A prolonged investigation in response to someone’s speech can violate the First Amendment even when it never leads to a fine. For example, a federal appeals court ruled in White v. Lee, 227 F.3d 1214 (9th Cir. 2000) that lengthy, speech-chilling civil rights investigations by government officials can violate the First Amendment even when they are eventually dropped without imposing any fine or disciplinary action. It found this principle was so plain and obvious that it denied individual civil rights officials qualified immunity for investigating citizens for speaking out against a housing project for people protected by the Fair Housing Act.

In another case, in which a company had been sued seeking damages over its participation in trade-association-related speech, a federal appeals court found that the pendency of the lawsuit all by itself caused enough of a burden on the firm’s speech rights that the court used its mandamus power to order the trial judge to dismiss the claims, a remarkable step.

Moreover, Bader writes, a string of federal precedents indicate that the constitutional rights Schneiderman is trampling here are not just Exxon’s but those of the organizations it gave to, which have a right to challenge his action whether or not the oil company chooses to do so:

These groups themselves can sue Schneiderman under the First Amendment, if Schneiderman’s pressure causes them to lose donations they would otherwise receive. Government officials cannot pressure a private party to take adverse action against a speaker.

Meanwhile, writing at Liberty and Law, Prof. Philip Hamburger of Columbia Law School takes a different tack: the subpoenas imperil due process and separation of powers because they issue at the whim of Schneiderman’s office. Earlier ideas of constitutional government “traditionally left government no power to demand testimony, papers, or other information, except under the authority of a judge or a legislative committee.” In more recent years executive subpoena power has proliferated; so has the parallel power of lawyers in private litigation to demand discovery, but the latter at least in theory goes on under judicial supervision that can check some of its abuse and invasiveness. Extrajudicial subpoenas by AG offices are particularly dangerous, Hamburger argues, because of their crossover civil/criminal potential: the targets do not enjoy a high level of procedural protection when “attorneys general claim to be acting merely in a civil rather than a criminal capacity,” yet the same offices can and do threaten criminal charges. Especially dangerous is New York’s Martin Act, a charter for general invasion of the private papers of anyone and anything with a connection to New York financial transactions.

An attorney general’s concern about fraud or the “public interest” is no justification for allowing him to rifle through private papers. When he thereby extracts the basis for a criminal prosecution, he evades the grand jury process. When he thereby lays the groundwork for a civil enforcement proceeding, he evades the due process of law, for there ordinarily is no discovery for a plaintiff until he commences a civil action. Even worse, when a prosecutor uses a subpoena to get a remunerative settlement, it is akin to extortion — this being the most complete end run around the courts.

Previously on the probe here and here (and earlier here and here), and on the New York attorney general’s office here and here.

John Wagner of the Washington Post reports that Bernie Sanders rallies feature a playlist to back up that “political revolution” he keeps talking about:

Supporters of the senator from Vermont who arrive at events early are likely to hear “Talkin’ Bout a Revolution” by folkster Tracy Chapman. And “The Revolution Starts Now” by country rocker Steve Earle. And “Revolution” by reggae legend Bob Marley & the Wailers. And “Revolution” by Celtic punk band Flogging Molly….

There’s “Uprising,” by Muse; “Power to the People,” by the John Lennon/Plastic Ono Band; “Make a Change,” by Buckwheat Zydeco; and “Give the People What They Want,” by The O’Jays.

And as I read through his article, I kept waiting for the most famous “Revolution” song of all, by the Beatles. Apparently you won’t hear that at a Bernie Sanders rally. Now, my more music-savvy colleagues tell me that’s probably because the Beatles’ label, Apple Records, is very tight-fisted about rights. But I wonder if it just might be that John Lennon’s lyrics are a little too cautionary:

You say you got a real solution
Well, you know
We’d all love to see the plan…

You say you’ll change the constitution
Well, you know
We all want to change your head
You tell me it’s the institution
Well, you know
You better free you mind instead
But if you go carrying pictures of chairman Mao
You ain’t going to make it with anyone anyhow.

Of course, Bernie hasn’t been carrying any pictures of Chairman Mao. But he did honeymoon in the Soviet Union – in 1988! – and in the 1960s he spent some time on an Israeli kibbutz run by a pro-Soviet group (Noam Chomsky called them “split between Stalinist and Trotskyite”). So that disparagement of Mao might be a little too close for comfort. Not to mention the skepticism about radical solutions and changing the Constitution. In fact, as he moves to a national campaign, maybe he should add a few songs from the American Revolution.

President Obama has released his budget for fiscal year 2017. The president’s spending and revenue proposals will be mainly dead on arrival on Capitol Hill, including his $3 trillion in proposed tax hikes.

So it is more interesting to look at the budget baseline, which presents projections assuming no changes in law going forward. Since Obama’s proposals will go nowhere in Congress, the baseline gives us a better picture of what the next president will face when he or she comes into office next year.

Under the baseline, fast-growing spending inflates the deficit from $616 billion this year to $1.4 trillion by 2026. As the deficits accumulate, federal debt held by the public will soar from $14 trillion this year to about $24 trillion by 2026.

If you stacked $24 trillion in $100 bills in a pile, it would stretch 16,000 miles high, or about the height of 150,000 Washington Monuments. Government debt—driven by deficit spending—is by far Washington’s largest monument.

Where is all the spending going? The chart below shows federal outlays divided into four pots, as a share of gross domestic product (GDP) from 1970 through to 2026, with projections under the baseline. The chart reveals that entitlement spending—driven by rapid growth in Social Security and health programs—will increasingly dominate the budget in coming years.

I suspect that entitlement spending will also dominate the next president’s tenure in office as it drives up debt to unprecedented and dangerous levels, although you wouldn’t know that from the campaign trail so far this year.

Pages