The Resilience of an American Pika Metapopulation to Global Warming

The American pika (Ochotona princeps) is an insanely cute critter often found in above-timberline rock fields in the western U.S.  

A Pika

Because they often live near mountain peaks, there’s been concern that global warming could push them over the top, to extinction. Writing in the Journal of Mammalogy, Smith and Nagy (2015) state that American pikas (Ochotona princeps) “have been characterized as an indicator species for the effects of global warming on animal populations,” citing the works of Smith et al. (2004), Beever and Wilkening (2011) and Ray et al. (2012). Indeed, as they continue, “a consideration of the effects of climate, primarily recent warming trends due to climate change, has dominated much of the recent literature on American pikas and their persistence.” Hoping to provide some additional insight on the subject, the two Arizona State University researchers set out to investigate the resilience of a pika metapopulation residing near Bodie, California, USA, that was exposed to several decades of natural warming.

Higher Tax Rates and Lower Revenues 1925-36

My recent Wall Street Journal op-ed, “Hillary Parties Like It’s 1938,” is not just about FDR’s self-defeating “tax increases” in 1936-37.  It is also about the particularly huge across-the-board increase in marginal tax rates the Herbert Hoover pushed for and enacted retroactively in 1932.   The primary motive in 1932, as in 1936, was to raise more revenue.   Federal spending under President Hoover doubled from 3.4% of GDP in 1930 to 6.8% in 1932, and he believed that unprecedented spending spree required that tax rates be even more than doubled to “restore confidence.”

Unfortunately, things did not quite work out as planned.  Total federal revenues fell dramatically to less than $2 billion in 1932 and 1933 – after all tax rates had been at least doubled and the top rate raised from 25% to 63%.  That was a sharp decline from revenues of $3.1 billion in 1931 and more than $4 billion in 1930, when the top tax was just 25%.  

Some may object that this is unfair, arguing that revenues should be expressed as a share of GDP because GDP fell so sharply in 1932 and 1933.  But that begs a key question.  Comparing the drop in revenues to the even deeper drop in GDP would make sense only if the depth and duration of the 1932-33 drop in GDP had absolutely nothing to do with higher tax rates (including Smoot-Hawley tariffs).  Yet neither Keynesian nor supply-side economics would consider huge tax hikes are so harmless (though Keynesians, seeing no revenue gain, might come to the paradoxical conclusion the Hoover actually cut taxes).  

In any case, dividing weak revenues by even weaker GDP doesn’t help support the conventional wisdom that higher tax rates always bring higher revenues. Revenues fell even as a share of falling GDP –  from 4.1% in 1930 and 3.7% in 1931 to 2.8% in 1932 (the first year of the Hoover tax increase) and 3.4% in 1933. That illusory 1932-33 “increase” was entirely due to less GDP, not more revenue. 

Center for Immigration Studies Report Exaggerates Immigrant Welfare Use, Part 2

Steve Camarota of the Center for Immigration Studies (CIS) wrote a response to my criticism of his recent report.  Camarota and I have gone back and forth before on similar issues in the past (here and here).      

Camarota responded to few of the points I made and many that I didn’t make.  The gist of his response is that I changed the subject rather than replying to his paper which is odd since, in his response, he dodged many of my specific points while going off on tangents.  Camarota wrote, “Readers should carefully note when would-be critics try to change the subject.”  Good advice – Camarota should have followed it.     

Here are the points I made in my initial post that he didn’t respond to: 

  1. The head of household variable that forms the core of CIS’s analysis isn’t useful or used much anymore by scholars who study this issue.  That variable counts many native-born Americans, including American-born spouses of immigrants, as part of the welfare consuming households.  This significantly exaggerates welfare use rates.  There are otherreasons why households are not a useful unit of comparison.  Camarota didn’t respond to this.   
  2. The CIS report does not report the dollar value of welfare benefits consumed.  When immigrants consume welfare, the dollar value of the benefits is typically far lower for them than it is for natives – sometimes substantially so.  CIS could have included the value of welfare benefits consumed but they did not.  Camarota did not response to this.    
  3. Larger immigrant households could be driving the results.  Camarota did not respond to this. 
  4. Social Security and Medicare should be included because they are the largest programs in the welfare state.  Camarota sort of responded to that but then oddly implied that I support these welfare programs.  CIS frequently cites the existence of the welfare state to argue against immigration – whether legal or illegal.  I frequently use immigration as a means to argue for restricting or eliminating the welfare state.  You decide who is more opposed to the welfare state. 

CIS claims that welfare use rates for immigrants are higher because our immigration policy favors poorer family members over higher skilled workers.  That point would be noteworthy if CIS supported skilled immigration – which they don’t.  CIS opposes skilled immigration, making their complaint that immigrants are not skilled enough seem like merely a rhetorical play rather than a serious argument.

Camarota’s response was as unsatisfying as his initial report.  He impugns my motives, broadly misrepresents my positions on immigration, and responded to strawmen with only a vague resemblance to my actual criticisms rather than taking on the criticisms directly.  Frankly, I’m disappointed because CIS and Cato readers deserve a real debate on this issue.  

Lessig Strains to Compare His Campaign to Eugene McCarthy’s

Harvard Law professor Lawrence Lessig is running for President on the single issue of adding restrictions to certain electoral speech. In his announcement video, he points to Eugene McCarthy’s 1968 run for the White House. He says in that video:

In 1967 Democratic Senator Eugene McCarthy entered the primary here in New Hampshire to challenge his own party’s sitting president because he feared the most important moral issue of the time, the Vietnam War, was going to be invisible in that election. In four months McCarthy went from almost nothing in the polls to almost beating Lyndon Johnson in the primary and the one issue that no one wanted to talk about became the one issue that no one could ignore.

It seems clear that Lessig intends to set up a parallel between Vietnam and America’s insufficiently regimented electoral system. There’s just one problem with pointing to McCarthy in this case: Eugene McCarthy was able to make that historic primary campaign about Vietnam because a few rich anti-war guys gave his campaign massive direct contributions, something Lessig strongly opposes.

In today’s Cato Daily Podcast (Subscribe: iTunes/RSS/CatoAudio for iOS), I talk to John Samples about the facts of McCarthy’s candidacy and why Lessig’s example doesn’t hold up. We also discuss Stewart Mott, one of McCarthy’s financial backers, and his appreciation for less-than-fully-fettered political speech.

Center for Immigration Studies Report Exaggerates Immigrant Welfare Use

The Center for Immigration Studies (CIS) released a new report this morning on immigrant welfare use. CIS found that immigrants use far more welfare than natives do. CIS’ methodology, parts of which are suspect, is what produced this result – as we’ve pointed out to CIS multiple times. They also omitted a lot of information that would make for a better comparison between immigrants and natives. Simply put, the CIS study does not compare apples to apples but rather apples to elephants.

The first issue is that CIS counts the welfare use of households, which includes many native-born American citizens, rather than individuals. There might be some good reasons to do this but the immigrant-headed household variable CIS uses is ambiguous, poorly defined, and less used in modern research for those reasons. To CIS’ credit they try to separate out households with children but didn’t separate out American-born spouses. There is debate largely over whether to count the American born children of immigrants as a welfare cost of immigration. If we should count them, shouldn’t we also count the welfare use of grandchildren, great-grandchildren, and great-great-grandchildren of immigrants?  Such a way of counting would obviously produce a negative result but it would also not be informative.

Another problem with counting households rather than individuals is that immigrants and natives have different sized households. According to the American Community Survey, immigrant households have on average 3.37 people in them compared to 2.5 people in native-born households. All else remaining equal, we should expect higher welfare use in immigrant households just because they’re larger. CIS should have corrected for household size by focusing on individual welfare use – which is included in the SIPP.

Presidential Candidates Need to Stop Bashing China

One important issue that should be the topic of sober discussions in the ongoing U.S. presidential campaign is policy toward China.   Instead, that topic receives inadequate attention–especially compared to the obsession with every minutia of Middle East policy. As I point out in a recent article in China-U.S. Focus, when China policy is not ignored, candidates too often take shrill positions to score cheap political points. That has been true in nearly every presidential election cycle since the Carter administration established diplomatic relations with Beijing.

Although Donald Trump seems determined to ignite a trade war with China, Carly Fiorina and Gov. Scott Walker have been especially prone to engage in China-bashing on a broader basis. Fiorina has taken an extremely confrontational stance regarding such complex issues as the South China Sea territorial disputes and cyber security. In an interview with CBS News, she recommended that the United States increase its provocative flyover aerial surveillance of the South China Sea. And it is clear that she has no sympathy for Beijing’s territorial claims. “We cannot permit China to control a trade route through which passes $5 trillion worth of goods and services every year,” she stated bluntly. 

Fiorina was mild on the South China Sea controversy compared to her stance regarding recent cyber attacks—which she blithely assumed originated in China and were approved by the Chinese government. She contended that such attacks were an act of aggression against the United States, implying that an especially confrontational response was warranted.

Walker has likewise advocated a extremely hard-line policy.  In a July interview with The National Interest, he portrayed China as a threat, stating that Washington needed to beef-up its military capabilities in East Asia, strengthen its alliances with Beijing’s neighbors, and develop a robust cyber capability “that punishes China for its hacking.”  And as if those positions would not be enough to poison the bilateral relationship, Walker stressed that the United States needed to “speak out against the abysmal lack of freedoms in China.”  Interestingly, Walker has not adopted a similar position with respect to human rights abuses committed by Egypt, Saudi Arabia, and other U.S. allies.

Matters have become worse in the days since I wrote the China-U.S. Focus article. Walker recently insisted that President Obama rescind his invitation to Chinese Xi Jinping for a state visit to Washington in September. Chinese leaders (and the Chinese people) would regard a rescission as a gratuitous insult, so that proposal is especially irresponsible. 

Sen. Marco Rubio also has entered the China-bashing sweepstakes. Although Rubio took a shot at China’s human rights record, labeling it “a disgrace,” it was clear that Beijing’s principal sin, in his view, is its defiance of U.S. hegemony in East Asia. “Xi Jinping is trying to convince his country’s 1.3 billion people that the way to establish Chinese greatness is to undermine the United States and enhance China’s influence at our expense,” he fumed. The goal, Rubio assumed, was “to push America out of Asia.” Numerous scholars have pointed out that Beijing’s policy is far more ambivalent and nuanced than that, but such subtleties tend to get lost in the heat of presidential campaigns.

The onset of shrill, combative rhetoric is most unfortunate. The United States and China do have some major substantive disagreements, and they deserve to be addressed. But it is important that candidates do so in a sober, constructive fashion. Campaign grandstanding, even if not meant seriously, creates needless suspicions and resentment in U.S.-China relations. Presidential candidates need to remember that preserving a cordial relationship with China must be a top U.S. foreign policy priority. Bilateral cooperation enables China and the United States to foster global strategic stability and economic prosperity. Conversely, a breakdown of the relationship would lead to unpleasant and possibly catastrophic consequences. Policy toward China is far too important for candidates either to ignore or demagogue.   

Should China’s Meltdown Be Surprising?

As stock markets decline around the world, apparently in response to stalled economic growth in China, one might ask whether China’s difficulties should come as a surprise.  After all, has not China “liberalized” its economy in recent decades, paving the way for the spectacular growth that capitalism can deliver?

Alas, China has liberalized in some dimensions, but its economy remains highly controlled in other dimensions; it  has state capitalism, not true capitalism. In a recent Cato Research Brief, Donghua Chen, Dequan Jiang, Alexander Ljungqvist, Haitian Lu, and Mingming Zhou provide evidence for this claim:

The key function of an economic system is to allocate scarce resources efficiently. Having proved superior to central planning, Western liberal capitalism, based on markets and private enterprise, was in the ascendant following the collapse of the Soviet Union. More recently, however, state capitalism has won adherents as an alternative to Western capitalism.State capitalism, as practiced in China, Russia, and elsewhere, combines the power of the state with capitalist tools: the state controls access to capital, picks winners, and influences investment decisions, while at the same time listing state firms on domestic or overseas stock markets.

In our research, we ask how efficiently state firms allocate capital. Our focus is on China, the country where state capitalism is perhaps most entrenched. Because China’s capital markets are relatively underdeveloped and firms cannot access them without political approval, we focus on firms’ internal allocations of capital, the internal capital markets operating inside business groups. As we show, Chinese firms rely more heavily on capital obtained from fellow group members than on external capital markets.

We investigate the efficiency of capital allocation by contrasting how state business groups and privately owned business groups in China allocate capital across member firms. An efficient internal capital market allocates more capital to units with relatively better investment opportunities. This is exactly how, according to our evidence, private groups in China allocate capital. State groups, in contrast, do the opposite.  …

Our results suggest that state capitalism does a poor job of allocating capital, at least in China’s state business groups. This likely reflects the fact that the objective of the Chinese Communist Party (CCP) is not just maximizing profits or shareholder value but also maintaining a “harmonious society.” Consistent with this, we document that the chairmen of state groups are rewarded with promotions to higher office not only for raising productivity but also for avoiding large-scale job losses. These aims can be in conflict and over time may be incompatible. State group chairmen appear to let their career incentives influence their internal capital allocation decisions. Not only do we find that internal capital allocations are used to prop up large and struggling employers with poor prospects, consistent with the policy aims of the CCP. We also find that capital allocations are particularly distorted when group chairmen are up for promotion and cease to be distorted once a group chairman becomes ineligible for promotion under the CCP’s rules on mandatory retirement.

The surprise, therefore, might be that China’s economy has done as well as it has until now.

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