Archives: 10/2012

Drug Warriors Wrong on Marijuana Ballot Initiatives

Three states’ ballot initiatives might legalize the recreational use of marijuana this year. To the displeasure of some current and former drug warriors, the Obama Department of Justice is silent on the matter.

Those urging the feds to weigh in, unfortunately, rest their case on some bad reasoning:

But their claim is just not true. Here’s why. Let’s say the feds have a law banning the use of sugar in iced tea. An example of a state law that conflicts with this federal law would be one that requires the use of sugar in iced tea, not a state law that simply permits the use of sugar. A failure to adopt a law that prohibits the same thing the feds prohibit is simply not a conflict.

Another reason the Justice Department may be silent on these state ballot initiatives? President Obama is less popular nationwide than marijuana legalization.

In today’s Cato Daily Podcast, Tim Lynch goes through some of the other reasons why these drug warriors are confused on the facts.

Free Trade, Free Markets: Rating the Congress

With all the China bashing we’re hearing on the campaign trail and the arguments from both candidates that free trade agreements are good only because they increase manufacturing exports, one might reasonably deduce that free trade advocacy is a thing of the past and a losing position with the American people.  If this is true, many in Congress haven’t gotten the memo.  The House and Senate are home to many free traders.  You can see for yourself by visiting Cato’s interactive trade votes database, Free Trade, Free Markets: Rating the Congress.

The Cato Institute has been keeping track of how Congress votes on trade issues since 1997.  At the website you can see reports summarizing the votes for each congressional term.  There is no report for last term (2009–2010) because Congress was too busy dealing with healthcare and Keynesian stimulus to take on trade issues, but the last two years have seen votes on free trade agreements, Chinese currency and subsidies, export finance, and sugar price controls.  We’ll have a report after the current term ends on what all these votes mean for the freedom of Americans to interact with foreigners and on what to expect in the next two years.

The most enjoyable part of Free Trade, Free Markets: Rating the Congress is the ability to browse individual voting records.  For any senator or representative who has served over the last 15 years, you can see a comprehensive report card that shows what they voted for or voted against.  But they don’t just get a letter grade or percentage. 

Each member’s record is plotted on a two dimensional graph that distinguishes between trade barriers and trade subsidies.  Many representatives and senators vote against trade barriers but in favor of trade-distorting or protectionist subsidies.  We call these folks Internationalists.  Those who vote against subsidies but favor barriers are labeled Isolationists.  Supporting both barriers and subsidies will place you in the Interventionist category, while consistent opposition to both sends you toward the venerable Free Trader designation.

The site offers excellent insight into the positions and ideologies of our elected officials, and I encourage you to investigate it at your leisure.  As a primer, I would like to point out two important observations of my own in this post.

First, free trade is not a partisan issue.  It is true that Free Traders tend to be Republicans and Interventionists tend to be Democrats, but the bulk of both parties are somewhere else on the graph and there is no obvious partisan correlation.  For example, John Boehner (R-OH) and Nancy Pelosi (D-CA) have fairly similar scores that place them between Interventionist and Internationalist.  There are plenty of Democrats who vote against trade barriers and plenty of Republicans who vote in favor of subsidies.  It’s often regional interest rather than partisan affiliation that affects voting patterns, as demonstrated by Marco Rubio’s (R-FL) support for sugar subsidies.

Second, senators from the same state can have widely different approaches to trade, especially in swing states.  Three large swing states in the current presidential election have a Democratic senator elected in the 2006 midterm election and a Republican senator elected in the 2010 midterm election.  Senators Rob Portman (R-OH), Pat Toomey (R-PA), and Roy Blunt (R-MO) have earned high marks so far since joining the Senate in 2011.  Senators Sherrod Brown (D-OH), Bob Casey (D-PA), and Claire McCaskill (D-MO) have established themselves as solid Interventionists.  Brown and Casey are among the most devout protectionists in Congress today.

The votes database suggests the hypothesis that giving lip service to free trade while advocating protectionism to boost manufacturing is a middle-of-the-road position for swing state voters that candidates are wise to adopt.  But it also says that free trade can win elections in Ohio and Pennsylvania.

The trade votes database offers data to answer many compelling questions on trade policy positions.  Three of the four names on the Republican and Democratic tickets have served in Congress—do their records on free trade match with their current positions?  How have senators and representatives voted on China trade issues in the past?  What issues does your representative think are more important than free trade?  Take a look.

Washington Post Sees Solar Panel Duties for What They Are: Self-Flagellation

The Washington Post was channeling the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies in this morning’s succinct and insightful editorial about the foolishness of taxing imports of Chinese solar panels.

The editorial picks up a few of the themes and draws very similar policy conclusions to those we have been advocating for many years and, without stating it explicitly, presents a compelling case for major reform, if not repeal, of the trade remedies laws.

For context, last week the U.S. Commerce Department published the final rates of duty calculated in both antidumping and countervailing duty (anti-subsidy) investigations of imports of Chinese solar panels, which were initiated in October 2011. (Here are some earlier thoughts on the matter.)

Formal antidumping and countervailing duty orders will take effect, probably, next month following a final determination by the U.S. International Trade Commission that the U.S. solar panel industry has been materially injured by these Chinese imports.

The thrust of the editorial is that the antidumping and countervailing duties, which are “calculated” by Commerce using an absurdly inaccurate, punitive methodology, will hurt other U.S. companies that are downstream and upstream of the solar panel producers in the production supply chain.

Noting the transnational nature of solar panel production, the editorial states:

U.S. firms that export polysilicon, a key material in the panels’ manufacture, or machinery to Chinese solar-panel makers could lose – if not because of the direct influence of the tariffs themselves, then because of the Chinese government’s likely reaction. Analysts worry that the Chinese will retaliate by slapping duties on U.S. polysilicon. Also at risk is the U.S. solar installation business, which has thrived during this period of low-cost panels.

This is one of the critical defects of the AD/CVD regime. It focuses like a laser on assisting industries seeking protection from competition while systematically—indeed statutorily—ignoring the adverse impacts of that “assistance” on downstream U.S. industries. (Bastiat points out that people tend to err by focusing on what is immediately seen, while failing to consider the ripple effects of actions that are less readily observed; U.S. trade remedy law demands that we commit that error!)

Much more often than not (80% of AD measures in the last decade), the foreign product subject to duties is an intermediate good required by downstream U.S. industries. And these downstream firms—the overwhelming victims of AD/CVD duties—have no legal standing in the proceedings that lead to the imposition of duties that raise their costs of production and drive them offshore or out of business. Under the statutes, the U.S. International Trade Commission is forbidden from considering the likely impact on downstream firms. In this age of globalized production and transnational supply chains, nothing could be more absurd.

About the so-called non-market economy methodology used to calculate margins of dumping and, ultimately, duty rates in Chinese (and Vietnamese) antidumping cases, the editorial asks:

But how much should a Chinese-made solar panel cost? The answer isn’t obvious. Commerce’s estimating methods—using Thailand’s economy as a surrogate for China’s—don’t inspire confidence.

These Cato papers (here and here) provide the dirty details of the capriciousness inherent in NME antidumping methodology. This brand new Cato analysis from Scott Lincicome, which documents—among other things—the global green energy subsidies race, explains how the U.S. countervailing duty law does not redress foreign subsidization, but rather punishes U.S. consuming industries and end-users. Getting tough on China means America’s wealth and jobs creators take it on the chin.

In closing, the editorial states:

And if the Chinese want to subsidize U.S. solar-panel buyers for the time being, there’s a good case to let them.

This is just another example of the administration’s policies working at cross purposes. To the fanfare of the Sierra Club and other environmental groups, President Obama has rhetorically championed the idea of greening our energy consumption profile. Of course, one of the biggest obstacles to that goal has been that the costs don’t justify the benefits. Hasn’t Chinese dumping and subsidization helped to reduce that obstacle? And aren’t duties on Chinese solar panels anathema to that goal?

Duties on solar panels, wind towers, and presidential interventions to block foreign investments in U.S. wind farms suggest that industrial policy—and not environmental policy—explains the president’s interest in green energy.

Recognizing in an editorial that duties imposed to benefit one industry or one firm (as is often the case with trade remedies measures) cause collateral damage to other industries is a laudable development for the Washington Post.  We look forward to the follow-up editorial calling for explicit repeal of the self-flagellating U.S. antidumping law.

Is the Long-Awaited Snowfall Increase in Antarctica Now Underway?

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.”

Whenever the topic of rising seas comes up, we point out that Antarctica is expected to gain mass through enhanced snowfall in a warmer climate, and therefore its contribution to global sea level rise should be negative—that is, the water locked up in the added snowfall there will act to reduce the level of the globe’s seas. The models used by the Intergovernmental  Panel on Climate Change (IPCC) in their 2007 Fourth Assessment Report project the sea level reduction from this mechanism by the end of the 21st century to amount to somewhere between 2 cm and 14 cm (roughly 1 to 6 inches). While this is not a lot, the main point is that Antarctica is not expected to be a contributor to rising seas as the climate warms. Without a large contribution from Antarctica, we will not approach alarmist projections of a meter-plus of sea level rise by century’s end.

Up to now, though, Antarctica has not exactly been with the program.

Instead of gaining mass through increased snowfall, there have been indications that Antarctica is losing ice (contributing to sea level rise) as ice discharge from its coastal glaciers exceeds gains from snow increases (which have been hard to find).  One has to wonder whether Antarctica, contrary to expectations, will continue to lose mass and become an important contributor sea level rise, or whether the projected increases in snowfall have just not yet reached a magnitude sufficient to offset the loss from glacial discharge.

Things are starting to change down there.

The research that has gotten the most attention on the subject of Antarctic mass balance has been based on observations made by the Gravity Recovery And Climate Experiment (GRACE) satellite.  This orbiter senses changes in gravity (i.e., mass) which can be caused by increasing snow and ice loads over the continent.  One key piece of information which must be factored into the calculations of ice mass change is the change in the underlying geologic formations, which are still rebounding from enormous amounts of ice lost after the end of the last ice age.  This geologic motion, known as the glacial isostatic adjustment (GIA), is largely modeled rather than directly observed. Our level of knowledge (or lack thereof) of the true GIA adds a sizable amount of uncertainty to GRACE-based estimates of the ice mass changes over time in Antarctica (and Greenland, the northern hemisphere’s cheap imitation of Antarctica).

In a widely cited finding, Velicogna (2009) reported that Antarctica was losing ice at a rate of about 104 gigatons per year (Gt/yr) during the period 2002–2006, increasing to a loss rate of 246 Gt/yr during 2006–2009 (about 374 Gt of ice are equivalent to 1 mm of sea level).  Rignot et al. (2011) also found an acceleration of ice loss there, increasing from a loss of about 209 Gt/yr (in 2003-2007) to about 265 Gt/yr from 2007 to 2010.  However, Wu et al. (2010) argued that the GIA model used in these previous studies is incorrect, and that when a more accurate GIA model is incorporated in the GRACE-based ice mass change calculations, Antarctica was only losing about 87 Gt/yr during the period 2002–2008.

Support for the GRACE-based calculations comes from the general agreement between the GRACE numbers and those calculated from studies of changes in the grounding lines of coastal glaciers and the ice flow across those grounding lines in association with the other aspects of the mass balance.  This method is known as the Input-minus-Output Method (IOM).  The IOM estimates of the average ice loss from Antarctica over the past several decades (1992–2007) lie somewhere around 136 Gt/yr, in rough agreement with the GRACE-based estimates.  However, the IOM is also subject to a lot of uncertainty. An attempt by Zwally and Giovinetto (2011) to reduce the uncertainty and increase the accuracy resulted in an IOM-based estimate of a loss of only 13 Gt/yr over the same 18-yr period and led the researchers to conclude that:

Although recent reports of large and increasing rates of mass loss with time from GRACE-based studies cite agreement with IOM results, our evaluation does not support that conclusion.

It seems that as the calculations and derivations are improved, the amount of ice mass that Antarctica is supposedly losing gets less and less.

Or perhaps it isn’t losing any mass.

Using a set of observations from a series of satellites that have been in orbit since 1992 and that measure changes in the height of the surface of the ice (ICESat), NASA’s Jay Zwally and colleagues (2012) report that Antarctica is gaining mass. Zwally recently presented his findings to a workshop of the Ice-Sheet Mass Balance and Sea Level expert group of the Scientific Committee on Antarctic Research and the International Arctic Science Committee. According to his abstract, Zwally reported that “During 2003 to 2008, the mass gain of the Antarctic ice sheet from snow accumulation exceeded the mass loss from ice discharge by 49 Gt/yr (2.5% of input), as derived from ICESat laser measurements of elevation change.”

Zwally further added, “A slow increase in snowfall with climate warming, consistent with model predictions, may be offsetting increased dynamic losses.”

So the “global warming, leading to increased snowfall, leading to a drawdown of global sea level” mechanism may be operating after all.

A paper to soon appear in Geophysical Research Letters give us another enticing look at recent snowfall changes in Antarctica.  In “Snowfall driven mass change on the East Antarctic ice sheet,” Carmen Boening and colleagues from NASA’s Jet Propulsion Laboratory report that extreme precipitation (snowfall) events in recent years (beginning in 2009) have led to a dramatic gain in the ice mass in the coastal portions of East Antarctica amounting to about 350 Gt in total (Figure 1).

Figure 1. Timeseries of snow accumulation in coastal East Antarctica (shaded region in inset).
(Source: Boening et al., 2012)
Boening et al. reported that the increase in ice mass in East Antarctica has not completely offset the loss of ice mass during the same time in West Antarctica, but as this comparison is made using GRACE data, it is hard to know just how accurate it is.

Also note that a few years with a lot of snowfall does not mean that a change in the long-term snowfall rate has occurred.  Nevertheless, the situation bears careful watching.

Putting everything together, we conclude that many of the claims that Antarctica is rapidly losing ice and increasingly contributing to a rise in global sea levels must now be, at the very least, tempered, if not overturned entirely. Time will certainly tell. And time will also tell just how much we need to worry about future sea level rise. Currently, the answer seems to be “not overly much.”


References:

Boening, C. et al., 2012. Snowfall-drive mass change on the East Antarctic ice sheet. Geophysical Research Letters, in press, DOI:10.1029/2012GL053316.

Rignot, E., et al., 2011. Acceleration of the contribution of the Greenland and Antarctic ice sheets to sea level rise. Geophysical Research Letters, L05503, DOI:10.1029/2011GL046583

Velicogna, I., 2009. Increasing rates of ice mass loss from the Greenland and Antarctic ice sheets revealed by GRACE. Geophysical Research Letters, 36, L19503, DOI: 10.1029/2009GL040222.

Wu, X., et al., 2010. Simultaneous estimation of global present-day water transport and glacial isostatic adjustment. Nature Geoscience, 3, DOI: 10.1038/NGEO938.

Zwally, H.J., and M.B. Giovinetto, 2011. Overview and assessment of Antarctic ice-sheet mass balance estimates: 1992-2009. Surveys in Geophysics, 32, 351-376, DOI: 10.1007/s10712-011-9123-5.

Zwally, H.J., et al., 2012. Mass gains of the Antarctic ice sheet exceed losses. Presentation to the SCAR ISMAA Workshop, July 14, 2012, Portland Oregon.

How Strong Is the Case for Big Government?

The movement for smaller government must really be doing well, considering all the attacks it has generated of late. Journalists decry “austerity” and “slashed” government spending from Athens to Albany. President Obama seems to think he’s running against people who wish that (as he put it) “everybody had their own fire service.”

That’s how my book review in the November 2012 issue of Reason begins. I take a look at two new books from impressive authors making the case for big government: To Promote the General Welfare: The Case for Big Government, edited by Steven Conn with a lot of distinguished professors, and Our Divided Political Heart: The Battle for the American Idea in an Age of Discontent, by Washington Post columnist E.J. Dionne Jr.

The professors tell a tale of a “Dickensian America” languishing in “semi-barbarism” (seriously) until the federal government took responsibility for dragging us out of the swamps and into civilized life. And Dionne frets that we are falling back into an era of “free-market fundamentalism” and a “radical form of individualism that … denigrates the role of government.”

So what’s my response? Read the review. But here’s a precis:

The case for big government should be cross-examined by looking at costs as well as benefits, risks as well as achievements, what is not seen along with what is seen, and the repeated horrors that have stemmed from leaving state power unconstrained.

The Political Novel for this Election Season

I’m a few months late on this, but while the Supreme Court was figuring out what to do with Obamacare this spring, a work of political fiction came out that captures the tone in Washington better than any number of Bob Woodward tick-tock tomes.  It’s called Don’t Mess with Travis, the fantastical tale of a homespun Texas governor facing off against an elitist president who rides roughshod over the Constitution.

[Full disclosure: The author, Bob Smiley, was a college classmate of mine, and he asked me to blurb the book, which I was happy to do because I enjoyed it so much.]

The plot, which perhaps had a bit more resonance when Rick Perry was riding high in the polls—and thus would’ve made the book a bestseller had Perry become the nominee—involves an unlikely state senator who finds himself governor when the two men ahead of him drive off the only cliff in the Lone Star State.  Once in power and faced with the reality of an out-of-touch White House steering the country toward a cliff of its own, Travis pursues what he sees as the only sane option: secession!

Smiley mixes the best of Carl Hiaasen with touches of George Will here, but the novel is more than just a witty blend of larger-than-life characters and prescient political narrative: it’s intelligent satire, true on both the human and policy dimensions.  The author—a Hollywood TV/film writer by day—may well become this generation’s Christopher Buckley.

In short, when you’re taking a break from reading my colleagues’ latest policy analyses or, of course, the Cato Supreme Court Review, I recommend Don’t Mess with Travis.

Despite their Moral Preening, Statists Would Not Want to Live in a World without Capitalism

Part of my job is to educate people about free markets and fiscal policy.

In some cases, that means providing information and analysis to those already sympathetic to limited government. There are many people who like the idea of lower tax burdens, for instance, but they may not have given much thought to the interaction of tax rates, taxable income, and tax revenue, so that’s why I put together my Laffer Curve tutorial and why I wrote about this amazing data from the Reagan tax cuts.

A more challenging part of my job is reaching people with statist instincts. I wrote a post last week mocking an absurd example of Swedish egalitarianism, but I included some serious thoughts about why some people oppose liberty. How do I reach those people, especially when there’s some very interesting evidence showing fundamental differences in how liberals, conservatives, and libertarians see the world?

I don’t have a single answer to that question. Sometimes I use the utilitarian approach and show how capitalist nations outperform statist nations, as you can see in this comparison of North Korea and South Korea, and this post comparing Argentina, Chile, and Venezuela.

In other cases, I try a philosophical approach, one example of which is this video arguing against majoritarianism.

And sometimes I use horrifying anecdotes in hopes that people will realize the risks of unconstrained government.

But perhaps the folks at the Fund for American Studies have discovered a good way of educating statists. Take a look at this clever video.

P.S. Here’s another video from TFAS that uses an unusual tactic to get people to think about the value of capitalism and free markets.