Archives: 10/2016

The Internet Beats the DEA Over Kratom

Many libertarians believe that technology helps protect our freedoms from excessive government.  That seems to have worked in this case:

The Drug Enforcement Administration is reversing a widely criticized decision that would have banned the use of kratom, a plant that researchers say could help mitigate the effects of the opioid epidemic.

Citing the public outcry and a need to obtain more research, the DEA is withdrawing its notice of intent to ban the drug, according to a preliminary document that will be posted to the Federal Register Thursday.

The move is “shocking,” according to John Hudak, who studies drug policy at the Brookings Institution. “The DEA is not one to second-guess itself, no matter what the facts are.”

And if the DEA has really found new religion, it should admit it does not have sufficient research to ban marijuana, heroin, or any other substance!

Farm Subsidy Outlook

An important issue on the plate of the incoming president will be the next farm bill. Current farm programs run through September 2018, and farm bill supporters are already making plans to extend and expand them.

I have posted a new essay on why farm subsidies should be repealed at I describe eight types of farm subsidies and six reasons to repeal them.

The durability of farm programs over the decades encapsulates just about everything that’s wrong with Washington. The programs make no economic or environmental sense. They subsidize higher-income households, including billionaires. They run directly counter to the American ethos of independence and rugged individualism. Farmers should be proud rural businesspeople, but some have become like cattle feeding at a subsidy trough.

Farm programs survive not because they make practical sense, but because Washington’s agenda is controlled by special-interest insiders exploiting a key flaw in our Madisonian system—logrolling. In a recent news story about the next farm bill, a top farm lobbyist basically admits that farm programs don’t have the votes to pass on the merits, so they are packaged in legislation with food subsidy programs to gain the support of urban legislators.

The current farm bill, passed in 2014, is costing more than originally promised, yet farm-state legislators will soon go on “listening tours” to ask farmers how to expand the subsidies even more. Meanwhile, neither of the two main presidential candidates seem interested in reforming the grotesque system.

Nonetheless, there was a lot of talk about Washington corruption and cronyism on the campaign trail over the past year, so maybe the public will get fired up to oppose welfare for the well-to-do in the upcoming farm bill.

See here for more on federal agriculture subsidies.

Read All About It! Heat Dries Things Up!

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.”

No one doubts that much of the West, especially California, has been very droughty since the turn of the century, and that heat and drought are highly correlated. So it seemed surprising that it was big news last week that forest fires, which require dry fuel, are on the increase out there.

University of Idaho’s John Abatzoglou and Columbia’s A. Park Williams used a large family of climate models to calculate various indices of western aridity (they used eight different measures), which were then related to the burned-out area every year. About half of the increase since the mid-1980s was related to climate-modelled warming. The other half, they say, was from other causes, including natural variability. The authors also note that some forest management practices may be contributing to the increasing burn.

The notion that this much drying is caused by dreaded global warming is what made the papers.

Should we use models that can’t even get close to the real-world evolution of lower atmospheric temperatures in recent decades to determine how much climate change is human-caused? That’s what they did—assuming only warming that was not modelled was “natural.” To say the least, that’s a heavy logical lift when it is so clear that the models are predicting far too much warming in the lower layers.

It is all too human to not let some else’s work get in the way of your confirmation bias. So there’s no mention of another explanation for why it’s so hot and dry there. Writing in the same journal that the fire work was published in, the Proceedings of the National Academy of Sciences (PNAS), two other western researchers, James Johnstone and Nathan Mantua, demonstrated that virtually all of the temperature changes in California and the West are related to changes in atmospheric pressure patterns that occur with or without global warming. That was first published in 2014, but there is no reference to it whatsoever in the fire paper. 

Nor is there any reference to the most comprehensive study of western fires—some 33,000 of them—by Argentina’s Thomas Kitzberger showing that for centuries the distribution and frequency of western fires is related to well-known atmospheric patterns over  both the North Pacific and North Atlantic, not global warming. It too was published in PNAS, in 2007.

But we digress. Aridity is largely driven by temperature (warmth) and precipitation. Unfortunately, only two of their eight measures of dryness are very sensitive to rainfall variability.

Climate models have pretty much no skill in estimating precipitation. But they do predict warming, and western (particularly California and Arizona) temperatures are higher than they were. So, absent any precipitation data, they are guaranteed to paint a drying picture and therefore an increase in fire extent.  

The six aridity indicators that are not particularly influenced by precipitation instead are primarily temperature-driven. Not surprisingly, these show much greater increases in aridity than the other two.

Here’s an example from the heavily forested northwest states of Idaho, Washington and Oregon. One of the aridity indicators is the Palmer Drought Severity Index (PDSI), an old warhorse that has been used to assess long-term moisture status since it was first published in 1965 by Wayne Palmer, a scientist at the (then) U.S. Weather Bureau. 

Looking in the Wrong Places for Social Security Reform

Democratic Vice Presidential nominee Tim Kaine suggested in the debate last week that a Clinton administration would address Social Security’s unsustainable fiscal trajectory by “focusing primarily on the payroll tax cap,” increasing it substantially from its current ceiling of $118,500. Proposals along these lines portray raising the tax cap as a way to address the rapidly deteriorating fiscal health of the program by enacting a modest tweak that would simply return the program to the way it has always operated, and that this additional tax burden would fall solely on high-earners. However, the current cap is not significantly out of line with the program’s historical experience, and the U.S. has a relatively high taxable maximum compared to many peers. These factors, along with the resulting adverse economic consequences and the need for further increases in the future, illustrate why the focus on this aspect of reform is misplaced.

It’s certainly true that at some points in the program’s history, a significant portion of workers had earnings above the tax cap, but this was in the earlier years of the its operation when more than a quarter of workers were above it. Over the past 30 years this share of workers has fluctuated in a narrow band around 6 percent.

Looking at it another way, the percentage of total earnings that are subject to the tax was 82.7 percent in 2014. While this is slightly below the high point in the early 1980s, it is just below the average since 1950.

Percent of Total Earnings Subject to Tax


Source: Social Security Administration.

New Research Finds that Immigrant Crime Is Still Low

Last year we published a blog summarizing the research on how immigrants affect the crime rate in the United States. There are two major types of studies that examine this question.

The first uses Census data of the institutionalized population to investigate immigrant versus native incarceration rates. Although the Census evidence isn’t perfect because of potential issues with reporting immigration status and different types of incarceration, these studies show that immigrants are less likely to be incarcerated than similarly-aged natives.  The second type is a macro-level or area study that looks at the crime rates in places that have experienced large waves of immigration.  These generally find that immigration either lowers or has little effect on crime rates.  The research on unauthorized immigrant crime rates is poor.

A few recent papers recently extended these findings.  The first by David Green seeks to determine whether immigrants affect violent and drug-related crime in the United States on the state-level.  It looks at state-level rates of violent crime and drug arrests pooled for the 2012-2014 years against pooled statistics on foreign-born and Mexican nationals by immigration status, specifically legal versus unauthorized immigrants.  Green finds no association between immigrant population size and increased violent crime.  However, he does find a small but statistically significant association between unauthorized immigrant population size and arrests for drug offenses.

There’s No Constitutional Right to a Taxi Monopoly

On Friday, the U.S. Court of Appeals for the Seventh Circuit handed down a pair of rulings rejecting the argument that taxi companies somehow have a protected property right in their monopolies. The opinions—both penned by Judge Richard Posner—are perhaps the courts’ strongest rebuke yet of taxi cartels’ desperate attempts to stay relevant in an Uber world, with Posner describing their claims as having “no merit” and “border[ing] on the absurd.” It’s nice to know that—in the Seventh Circuit at least—losing your monopolistic cartel due to technological disruption is not considered to be a constitutional violation.

In one case, Illinois Transportation Trade Association v. City of Chicago, incumbent taxi companies sued Chicago for allowing app-based ridesharing companies such as Uber and Lyft to operate, asserting that the city’s decision to allow such companies to enter the market without being subject to the same regulations covering traditional taxis constituted an unconstitutional taking of their property without just compensation (and also somehow violated the Fourteenth Amendment’s Equal Protection Clause).

In the other case, Joe Sanfelippo Cabs, Inc. v. City of Milwaukee, taxi companies sued Milwaukee for eliminating the hard cap on the number of taxi medallions in circulation, opening the market up to any applicant who met the requirements. Like in the Chicago case, the plaintiffs argued that the loosening of regulations to allow new market entrants violated the Takings Clause.

In both cases, the plaintiffs’ arguments more-or-less boiled down to: “We made a deal with the city years ago where we were promised monopoly control over this market. The government’s failure to protect that monopoly constitutes an eminent domain-style taking.” This is, of course, as the court described, an absurd argument. “‘Property’ does not include a right to be free from competition. A license to operate a coffee shop doesn’t authorize the licensee to enjoin a tea shop from opening.” No one is entitled to a government grant of monopoly power.

Yes, Your Honor, the CFPB Is Indeed Unconstitutional

I wrote only yesterday about the Consumer Financial Protection Bureau’s (CFPB’s) regulatory overreach with regard to payday loans, and it seems the D.C. Circuit Court was on the same wavelength.  Judge Brett Kavanaugh, writing for the court, handed down a stinging condemnation of the Bureau’s structure, labeling the single-director model unconstitutional.  Although the court’s remedy is somewhat limited – changing the agency from independent to one within the executive branch, with the director serving at the pleasure of the President – the opinion itself is a full-throated indictment of the CFPB’s structure and repeated overreach.  Even given its limited application, it is a win for those who have long questioned the many defects in the CFPB’s design.

The case before the court arose out of an enforcement action brought by the CFPB against the mortgage lender PHH Mortgage.  The action was initially brought before one of the agency’s own in-house adjudicators, who imposed a fine on the company.  (Although not explicitly addressed in this case, these internal administrative proceedings, led by administrative law judges or ALJs, present their own issues, similar to those at the SEC that I have discussed here and here.)  Director Richard Cordray apparently thought the $6.4 million fine imposed by the ALJ was insufficient and added another $102.6 million to the bill.  PHH Mortgage appealed the Director Cordray’s decision to the D.C. Circuit.

The court’s decision turns principally on the magnitude of the director’s power.  Unlike the heads of agencies such as the Department of Justice or Department of the Treasury, the director of the CFPB can be removed by the President only for cause.  That is, the President could remove Cordray only for inefficiency, neglect of duty, or malfeasance.  In fact, the court called the Bureau’s director the “single most powerful official in the entire United States Government, at least when measured in terms of unilateral power” after the President himself.  And the President is at least accountable to the people through the democratic process.  Other powerful positions within the federal government – Speaker of the House, Senate Majority Leader, heads of other independent agencies – have greater checks on their power.  The Speaker cannot act without persuading and cajoling a large number of colleagues.  Independent agencies such as the SEC and FTC are comprised of multi-seat commissions, and no one commissioner can act alone, making the commissioners themselves the checks on each other’s power.  The director of the CFPB faces no such constraints.