Archives: 12/2013

How Offal! Global Warming Threatens the World’s Haggis Supply!!

Global Science Report is a 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.” In this edition, we cover an important story that we missed back in 2008.

People send us stuff. As a result of our recent Global Science Report on global warming ruining our bananas, one of our fans directed our attention to an important effect of climate change that we somehow missed, back in 2008, when the alarmists at the BBC wrote that it was threatening haggis.

Haggis, for the uninitiated, is sheep stomach stuffed with minced lung, liver, heart, tongue, suet, onions and oats. How offal!

While there’s no accounting for taste, it tastes as bad as it smells.

According to the story, there has been a rise in a parasite effecting Scottish sheep that renders the lung “unfit for consumption” (something that many of you probably thought was the case already).

And, so as not to miss the bandwagon, an official from the Scottish Agricultural College Veterinary Investigation Centre told the BCC that:

Part of the reason will be the parasite is able to live a pretty happy life on the ground because of higher temperatures. Maybe it’s climate change.

Or maybe not.

It turns out that another potential cause of the increase in the lung parasite is that Scottish farmers have reduced their application of parasite treatment due to declining infections of roundworm. The treatment of roundworm also killed the lung parasite.

There was no mention made in the BCC article as to whether global warming was behind the decrease in roundworm infestations.

Instead, the article went on the describe the events which took place in the World Haggis Eating Championship, won by Willie Robertson from Dunkeld, who managed to put away a pound of haggis in 125 seconds. For his victory, Mr. Robertson was awarded a trophy and a bottle of whiskey—no doubt a key feature in the rest of the day’s merrymaking.

BBC’s writing in the haggis story appears similarly merry. Here are the last three paragraphs of their report, verbatim, a candidate for first place in the 2008 International Nonsequitur Competition.

The championship was held as part of the 125th Birnam Highland Games, and attracted competitors from Australia, New Zealand and the US.

Climate change, meanwhile, has been blamed for affecting natural habitats in Scotland and across the world.

Most notably, scientists and conservationists say it threatens survival of polar bears.

Bernanke’s View of Fiscal Policy

Federal Reserve chairmen are famous for their opaque but sophisticated-sounding comments designed to make it appear that they know more about the shape of the economy than they really do. But outgoing chairman Ben Bernanke’s direct and transparent assertions yesterday about fiscal policy also left me scratching my head.

In response to a reporter’s question about why the economy has not created more jobs:

Bernanke saw several of the usual reasons: the nature of the financial crisis, the housing bust and trouble in Europe. But he added one more. ‘On the whole, except for in 2009, we’ve had very tight fiscal policy,’ he said. ‘People don’t appreciate how tight fiscal policy has been.’

In the usual (and weird) Keynesian view of the economy, government deficits are stimulative while surpluses are “tight” or destimulative. The following chart (based on CBO) shows that in the four years after 2009, we had $4.4 trillion of federal deficit spending, or supposed Keynesian stimulus. Calling that “very tight fiscal policy” is absurd.

Edwards Chart

Frederic Bastiat Makes the Case for Trade Facilitation

Earlier this month in Bali, WTO ministers reached agreement on a set of negotiating issues known as “trade facilitation,” which deal mostly with customs reform and related measures to reduce the time and cost of transporting goods and services across borders. If removing tariffs is akin to turning on a water spigot full blast, trade facilitation is the act of untangling and straightening out the attached hose. A kinked hose impedes the flow as an administratively “thick” border impedes trade.
 
This paper, which I wrote a few years ago, describes the importance of trade facilitation reforms to economic growth, and explains why subjecting such self-help reforms to negotiation – instead of just undertaking them as a matter of surviving in a competitive global economy – would only delay the process of removing inefficiencies. Five years after the paper was written and 12 years after multilateral negotiations were launched in Doha, a deal was reached obligating governments to reform and streamline their customs procedures, with technical and financial assistance provided by the wealthy to the developing countries.
 
As I wrote yesterday, this is small relative to the overall Doha Round agenda and relative to what might have been accomplished over these past 12 years in the absence of Doha (i.e., without adhering to the pretensions that our own domestic barriers to foreign commerce are assets to be dispensed with only if foreigners dispense of theirs). 
 
But perhaps nobody has been more gifted at exposing the absurdity of administrative trade barriers with pithy wit and grace than the 19th century French classical liberal business and economics writer Frederic Bastiat. Around 1850, Bastiat made a case for trade facilitation that can scarcely be improved:
Between Paris and Brussels obstacles of many kinds exist. First of all, there is distance, which entails loss of time, and we must either submit to this ourselves, or pay another to submit to it. Then come rivers, marshes, accidents, bad roads, which are so many difficulties to be surmounted. We succeed in building bridges, in forming roads, and making them smoother by pavements, iron rails, etc. But all this is costly, and the commodity must be made to bear the cost. Then there are robbers who infest the roads, and a body of police must be kept up, etc.
 
Now, among these obstacles there is one which we have ourselves set up, and at no little cost, too, between Brussels and Paris. There are men who lie in ambuscade along the frontier, armed to the teeth, and whose business it is to throw difficulties in the way of transporting merchandise from the one country to the other. They are called Customhouse officers, and they act in precisely the same way as ruts and bad roads.
 Congratulations, negotiators, for agreeing to remove the kinks from your hoses. 

President Obama’s Most Amazing Accomplishment

After nearly five years in office, what’s President Obama’s most significant accomplishment?

This is a serious question, so no jokes about the Nobel Prize he received for not being Bush. And no partisan GOP answers about the 2010 election, either.

Put yourself in the position of a future historian and think about what you would put in a book to describe Obama’s biggest accomplishment.

I don’t think anyone, regardless of ideology, would pick the so-called stimulus. Advocates of small government say it was a waste of money based ondeeply flawed Keynesian theory.

 Stimulus

Proponents of big government, by contrast, also aren’t big fans of the stimulus, though they’re dissatisfied because they think Obama should have wasted even more money.

Another potential answer is Obamacare. Libertarians and conservatives, needless to say, would say it was a significant accomplishment in the same sense that the Titanic had a significant maiden voyage.

Leftists, by contrast, obviously can’t be pleased by the way Obamacare is imploding  in the short run, but they nonetheless may think that it will be worth it in the medium run because more people will be dependent on government (though they may regret their choice in the long run).

Killing Osama bin Laden is probably a good answer, but if terrorism and conflict with the Islamic world are still big issues in the future, then I suspect the achievements of Seal Team Six won’t be seen as making that much of a difference.

For what it’s worth, I think the change in public opinion may be the President’s most long-lasting and significant accomplishment. Take a look at these remarkable results just published by Gallup. A record share of the population now say that big government is the biggest threat to the nation’s future.

Gallup Big Government Polling Data

Wow. I’m tempted to say that this is strong evidence of the effectiveness of the Cato Institute (and there is independent data to support that position), but I feel compelled to admit that Obama also deserves a good bit of the credit.

Even more amazing, President Obama has done something that is probably beyond even the ability of Cato. He’s convinced partisan Democrats that big government is a serious threat. Look at how the numbers have dramatically changed since 2008.

Gallup Big Govt Democrat Polling Data

What’s particularly amazing about the shift among Democrats isn’t that 56 percent now view big government as the major threat today, compared to 32 percent about five years ago. What’s shocking is that this change happened with a Democrat in the White House.

This is newsworthy because partisan Republicans and Democrats have a tendency to say things are good or bad depending on whether “their team” is in charge.

While these numbers are remarkable, I suppose it’s too early to say the growing concern about big government is the most significant accomplishment of the Obama presidency.

That being said, anxiety about big government may lead to big political changes in 2014 and 2016, and those political changes may then lead to big policy changes such as entitlement reform and tax reform.

And if that happens, then the shift in public opinion during the Obama years may turn out to be profoundly important. In other words, Obama may turn out to be another Herbert Hoover – a politician whose statist policies set the stage for dramatic changes in public policy.

And if that happens, Obama truly will deserve to be named “libertarian of the year.”

P.S. While big government is the biggest threat to the country’s future, big business and big labor can be very dangerous to liberty when they get in bed with big government.

Vermont’s Chief Justice Cites Cato Portugal Study

Chief Justice Paul Reiber at Vermont Law School in South Royalton

From the Seven Days publication:

In recent weeks, Vermont Chief Justice Paul Reiber has gone public with an unusually assertive critique of the war on drugs and the “tough on crime” approach that has defined criminal justice for decades.

Reiber, who holds an office in which occupants usually avoid saying anything remotely controversial, has stopped short of recommending policy or criticizing any individuals or government bodies. But in a pair of speeches and a brief interview with Seven Days, he has declared ineffective the current reliance on police and punishment, and touted the merits of treatment-based models for dealing with crime rooted in substance abuse….

In his Boston speech, Reiber highlighted reforms in Portugal, which in 2001 abolished criminal penalties for possession of all drugs, and replaced incarceration with drug treatment. Vermont’s chief justice called the results of that experiment “astonishing,” citing a study from the libertarian Cato Institute showing that Portugal experienced a large drop in drug use and a spike in the number of people seeking treatment.

Check out the Cato report on Portugal’s drug decriminalization policy here.

Germany Lurches Left: Sacrificing German Liberty and Germany’s Future

BERLIN—Germany’s Christian Democrats and Social Democrats have formed another “Grand Coalition.”  The political center in Europe’s wealthiest and most populous state now swallows most of the ideological spectrum. However, the entire political spectrum has lurched to the left.

The Christian Democratic Union-Christian Social Union combination (sister parties which run as one) is a pale version of the Republican Party.  The CDU-CSU long ago made peace with Germany’s generous welfare state. 

Even less inclined to act is CDU Chancellor Angela Merkel. She pulled her party leftward in 2005 into a Grand Coalition with the Social Democratic Party, which went on to do essentially nothing. 

She won a second term in 2005 but did little more to liberate German life. Her latest reelection campaign was based on keeping everything the way it was.

The CDU-CSU fell only five votes short of a majority. However, the poll was a disaster for the CDU-CSU’s coalition partner, the Free Democratic Party. Created in 1948 out of the ruins of the Third Reich, the FDP emphasized civil liberties, economic freedom, and entrepreneurship. In 2009, the Free Democrats enjoyed their best showing ever, 14.6 percent, and their support made Merkel Chancellor.

However, they proved to be less adept in governing. As the September election approached, the Free Democrats lacked any noticeable achievements. 

A new political competitor, Alternative for Germany criticized the endless Euro bail-outs while backing the same market-oriented economic policies as the Free Democrats. Many FDP voters shifted allegiance.   

The FDP fell just short of the five percent threshold, receiving 4.76 percent of the vote. It went from 93 Bundstag seats to none. The Free Democrats still hold some seats in regional parliaments and the European Parliament, but have no obvious path back to national power. The AFD came in just behind the FDP, with 4.7 percent, and also won no seats. However, it is well-positioned to advance, putting the FDP’s survival at risk.

The Free Democrats’ collapse left the Bundestag with a narrow left-wing majority.  However, both the SPD and Greens pledged not to join forces with Die Linke, or Left party, since it was the successor to the Communists who once ruled East Germany. 

As I pointed out in my Forbes online column:

Although the CDU-CSU was much stronger in the Bundestag, the Social Democrats demanded specific concessions, such as a national minimum wage, which will reduce Germany’s employment advantage over its European neighbors, limitations on temporary employment, which will cut job opportunities, expanded pension benefits, which will add to the financial burden of an aging society, higher than necessary state pension contributions, which will be looted to fund political initiatives, and urban rent controls, which will discourage apartment construction and maintenance.

The Economist magazine warned of “Die Grosse Stagnation” likely to come. Europe’s largest economy faces slow labor productivity, falling investment, and minimal reforms since the start of the Euro crisis. 

It is not just the government which has moved left. During the last Grand Coalition the FDP was the largest opposition party, leaving its leader the unofficial opposition leader. In this Bundestag the largest opposition party will be Die Linke. Just behind will be the Greens, traditionally known for their environmental commitment but of late pushing leftist economic nostrums as well. 

Nor does the drift stop with the left-wing parties. The Free Democrats held a special party congress in Berlin and responded to the election debacle by making Christian Lindner of North Rhine-Westphalia the new party chairman. Lindner is seen as less committed to the party’s liberal principles.

Like Americans, the German people have worked hard to prosper despite an ever-expanding regulatory welfare state. But they will find it ever more difficult to succeed as their government moves further left.  Then they will come to miss having a voice for economic and social liberty in the Bundestag. 

Fast Track Is a Waste of Time

As Cato’s Dan Ikenson has pointed out before, the Obama administration likes grand trade policy proposals, like the Trans-Pacific Partnership or the proposed U.S.-EU trade agreement, but isn’t putting in the political effort needed on the domestic side to secure approval of these agreements.

The president’s decision to nominate Senator Max Baucus (D-MT) to be the next U.S. ambassador to China is a perfect example of this problem.  Three years into negotiations toward the Trans-Pacific Partnership agreement, the president finally decided to seek fast track trade promotion authority this fall, and Baucus has been instrumental in putting together a bipartisan bill.  With Baucus being sent to China, there will be no prominent Democrats in either the House or the Senate supportive of fast track.

This development should surely not engender confidence in the ultimate success of the TPP, but there’s one counterintuitive way to help bring much-needed focus to U.S. trade policy:  Stop worrying about fast track.

Fast track authority is an arrangement between the president and Congress designed to ease the passage of trade agreements.  Congress agrees to hold a timely, up-or-down vote on future trade agreements.  In exchange, the president agrees to adopt a series of negotiating objectives demanded by Congress.

Many trade advocates believe that fast track authority is necessary to gain Congressional approval of free trade agreements, but I have a new bulletin out today explaining how, right now, fast track will do more harm than good.

First, with the current partisan alignment in Congress, we don’t need fast track to pass the TPP.  And second, the negotiating objectives Congress imposes through fast track include bad policies that could disrupt the negotiations at this late stage, and even delay completion of the agreement.

If there were a chance that Congress would use the fast track bill to make the TPP a better free trade agreement, then I would support it.  But there is absolutely no indication that anyone in Congress is going to push for that.  Taking up fast track now accomplishes nothing of value, but will serve as divisive political theater while ultimately reducing the quality of the TPP.

You can learn more by reading the bulletin.