Topic: General

Taylor vs. Corn

FYI, I’ll be on Kudlow & Company (probably around 5:30 EST) to debate ethanol subsidies with Frank Gaffney.  

Something to chew over while you wait for the beating to come: wholesale ethanol is selling today for July delivery at the Chicago Board of Trade for $3.40 a gallon.  Given that ethanol has only two-thirds the energy content of conventional unleaded gasoline, we have to multiply that price by 1.5 if we want to compare apples with apples.  So to get the same amount of energy from ethanol that we would get with a gallon of conventional unleaded, we would have to pay $5.10 a gallon.  What is the wholesale price today for conventional unleaded for July delivery?  All of $2.10 a gallon at the NYMEX.

But that’s not all.  Gasoline moves from refineries to retail distribution centers via pipelines, and transportation costs are low.  It costs a lot more money, however, to move ethanol from processing plants in the Midwest to retail distribution centers because it must be moved by truck and barge (one can’t use pipelines to move ethanol for various technical reasons).  So add another couple of dimes to the differential between the price of ethanol and conventional unleaded to account for that, and perhaps another dime or more if you’re shipping that ethanol to the Atlantic or Pacific coasts.

If the answer is ethanol, what exactly is the question?

A Case for a Different Libertarian Party

All of this blogtalk about which major party is likely to be more receptive to libertarian policy positions, I suggest, is a waste of time unless the winning candidate of either party is dependent on the votes of libertarians.

Increased outrage about the state of American politics and the prospect for a larger number of close elections increases the potential effectiveness of a different libertarian party – one that sometimes endorses one or the other major party candidate but does not run a party candidate for that position.

The Libertarian Party’s efforts to promote their policy positions by running Libertarian candidates is counter-productive when they reduce the vote for their favored major party candidates. A disciplined group that is prepared to endorse one or the other major party candidate in a close election, however, can have a substantial effect on the issue positions of both major party candidates. The following conditions must be met to achieve this effectiveness:

  1. The party cannot run a separate candidate.
  2. The size of the party must be larger than the expected vote difference between the major party candidates.
  3. After the major party candidates are selected, the party leadership must have the opportunity to bargain with both major party candidates on the issue positions of highest priority for the party.
  4. The party, as much as possible, must act in concert to support the major party candidate who is chosen by the members of the party in that district.

There is no reason for this libertarian party to be active in any district for which the party does not meet all four of the above conditions. (For most libertarians, the most difficult of these conditions to meet, I suspect, is condition 4.) In addition, the party should not emphasize the same issues in every district, because the choice of these issues should depend on those for which the major party candidates are willing to bargain.

This is a strategy to increase the approval of libertarian policy positions rather than the usually counter-productive effort to increase the number of votes for Libertarian candidates. Maybe it is better to term the organization that I have described as a libertarian political action group, not a libertarian party.

Marriage Amendment Failure

Supporters of the Marriage Protection Amendment say that even though it failed in the Senate on Wednesday, they are pleased that it did better than two years earlier. But let’s do the math. In 2004 supporters lost a cloture vote 48-50, with two opponents not voting. So their strength on moving the amendment to a floor vote was 48-52. This year the vote was 49-48, far short of the 60 needed to invoke cloture or the 67 for a constitutional amendment. If all senators had voted, the vote would likely have been 50-50. So maybe that’s a pickup of two votes for amendment supporters.

But the Republicans picked up four Senate seats in the 2004 election. So relative to the number of Republicans in the Senate, support for the amendment actually slipped by two votes. Supporters picked up no Democrats, and they lost two Republicans. Judiciary Committee chairman Arlen Specter voted for cloture in 2004, though he would have voted against the amendment itself; this year he voted against cloture and quoted two Cato publications in his Senate speech. Judd Gregg joined his New Hampshire colleague John Sununu in voting for federalism over centralism after realizing that the 2003 Massachusetts court ruling for marriage equality in that state is not being replicated nationwide. Given that younger voters are much more supportive of same-sex marriage than older voters, it seems unlikely that support for an amendment will grow in future years.

Reagan in Leipzig

On a trip to East Germany last week I talked to a politician who had been involved in the 1989 Leipzig protests that led to the opening of the Berlin Wall. I asked him, “When Reagan said ‘Mr. Gorbachev, tear down this wall!’ in 1987, did you know that?” He said, yes, not from East German TV but from West German TV, which they could watch. And what did you think, I asked. “We thought it was good, but we thought it was impossible.” And yet just two years later, “peace prayers” in Leipzig’s Nikolaikirche turned into protests for liberalization and open borders. The Leipzig politician told me, “As it says in the Bible, we walked seven times around the inner city, and the wall came down.”

Then I went to a museum exhibit in Leipzig on the history of the German Democratic Republic. It was very impressive, with a large collection of posters, letters, newspapers, video, and more. Alas, it was all in German, so I had only a dim understanding of what it all said. I did get the impression that it wasn’t a balanced presentation of communism such as might be found in a Western museum; these curators knew that communism had been a nightmare, and they were glad to be out of it. As it happened, the only English words in the entire exhibit came in the collection of audio excerpts that greeted visitors in the entry foyer. And they were a familiar voice proclaiming “Mr. Gorbachev, open this gate!”

In Higher Education, Status Quo Is Status Quo

Yesterday, a House subcommittee working on the higher education portion of the 2007 federal budget approved a bill that would add $100 to the maximum Pell grant, bringing the ceiling to $4,150, and save numerous programs President Bush had slated for elimination. According to Inside Higher Ed, committee Democrats were on the warpath from the start, demanding more support for the nation’s college students:

After a few minutes of civility, House Democrats went on the attack, questioning their Republican counterparts’ commitment to helping working-class Americans afford college education.

“Here’s the story as I see it: Families spend more to send their children to college; their costs are not frozen,” said Rep. David Obey (D-Wis.)… “We’re not going to effectively deal with this by keeping the status quo. And this bill is worse than that. People who are supposed to be the focus wind up getting squeezed.”

Obey was right—keeping the status quo is not going to ground higher education’s skyrocketing price. But the problem is that the federal government is putting too much money into student aid, not too little! The political cycle that drives tuition is actually easy to understand: Some people complain that tuition is too high and demand that politicians make college “affordable.” Politicians, to get votes, provide student aid. Then schools, suddenly able to get more money, raise tuition. But wait, that makes college “unaffordable” again! And so it goes…

The data bear out that increases in student aid have driven tuition up. Indeed, aid has actually been increasing faster than tuition over the last ten years. According to College Board figures, between the 1995-96 and 2005-06 academic years, the average, inflation-adjusted, enrollment-weighted, cost of tuition, fees, room, and board rose 31 percent at private, four-year institutions, and 41 percent at public, four-year schools. Meanwhile, inflation-adjusted aid per full-time equivalent student – most of which came from the federal government—rose 61 percent, from $6,261 to $10,119! Tuition ballooned because politicians made sure it could… and then some!

To truly change the status quo, Congress will have to do the exact opposite of what Rep. Obey wants. It will have to cut student aid, not increase it. Unfortunately, that’s not what gets votes.

Jury Nullification and Perjury

Here’s an interesting personal account on the perils of jury nullification:

Julian Sanchez was called to jury duty in a drug case.

He was forced to decide whether to answer honestly when asked if he could convict a nonviolent drug offender (in which case he’d promptly be tossed from the jury), or to risk perjurying himself so he could nullify an immoral law once in deliberation.

Jury nullification is a right – perhaps even an obligation. Unfortunately, we’ve let prosecutors and courts effectively make it a crime.

We need a test case to move this issue before the Supreme Court. Prosecutors shouldn’t be allowed to hold the threat of perjury over potential nullifiers during voir dire.

Topics: