Topic: Government and Politics

Great Moments in Government

In the private sector, there is a bottom-line incentive to obtain the best supplies at the cheapest price. In government bureaucracies, by contrast, there is little incentive to be frugal. Instead, the focus is on mindless paperwork and onerous regulation.

The process for obtaining paper towels on Capitol Hill is a good example. Even the Washington Post is unable to resist a tongue-in-cheek tone in an article about the search:

The office of the Architect of the Capitol, which is responsible for stocking paper towels in bathrooms throughout the Capitol complex, recently released its requirements for paper supplies to potential vendors.

…The specifications, written with the detail only your massive federal bureaucracy could provide, spell out eight requirements for towels fit for the Capitol. Among them: “C-fold paper towels provided shall have a minimum unfolded width of 10.25 inches, with a permissible variance of plus .25 or minus .50 inches, and maximum length of 14 inches. Each towel shall have a minimum area of 130 square inches. The folded width of each towel shall be 3 inches, with a permissible variance of plus .25 or minus .50 inches. The rate of absorption of paper towel material provided shall not be greater than 20 seconds for the absorption of 0.1 milliliter of water on any representative sample of paper towel as submitted. The color of the paper towel shall be white, with a minimum brightness rating of 70 when measured in accordance with the requirements of test method T-452 of the Technical Association of the Pulp and Paper Industries. The minimum thickness of 12 single plies of the paper towel material provided shall be 0.070 inch when measured under an applied pressure of 0.5 psig.”

And we won’t even get into the “average bursting strength” requirement of the two-ply toilet paper. 

The Sound of No ‘Peak’ Story Popping

Last week, in a Capitol Hill press conference featuring congressmen Roscoe Bartlett (R-Md.) and Tom Udall (D-N.M.),  the Government Accountability Office unveiled a new report on the looming catastrophe the United States faces from “peak oil.” With gas prices up and environmental stories popping in the press, Bartlett, Udall, and the GAO had to be thinking they’d have a hit on their hands.

So, if a GAO report falls on Capitol Hill and the media ignores it, does it count as news?

I can find no coverage of the press conference or the report in either the New York Times or the Washington Post. The only mention of it on either of those papers’ websites is in a transcript of an online chat session with Post politics reporter Lois Romano, wherein a reader asks if the Bartlett-Udall press conference will generate buzz.  Romano’s response (in essence): What press conference?

In fairness, the report did get a bit of play: the AP moved a short story on it and the WSJ briefed it. But no one is interviewed in either story, and the two pieces have the whiff of being quickly typed up from a press release. In other words, the media decided the report didn’t merit any real attention.

Peak oil, if you’ve never heard the term, is the theory that oil, as a finite resource, will grow increasingly difficult and expensive to extract over time. At some point, the global extraction rate will peak and then decline because of the increasing cost and difficulty.

The GAO report investigates the theory and comes up with three scintillating conclusions (I’m paraphrasing):

(1)  The world will indeed reach an oil peak — in the next few years, or the next 15 years, or the next 35 years, or the next 70 years, or sometime in the 22nd century.

(2)  It’s currently unclear how the United States will adjust to declining production rates when they do occur.

(3)  We’re all doomed, doomed I tellz ya’!

OK, (3) is hyperbolic — but just a tiny bit.

The notion of peak oil gained currency back in the early 1970s, a little more than a decade after geophysicist Marion King Hubbert correctly predicted that (Lower-48) U.S.-produced oil would peak around 1970. (Peak oil theory is often referred to as “Hubbert’s peak.”)

But Hubbert wasn’t the first person to come up with the concept. The notion dates at least to 1875 (yes, 1875) when John Strong Newberry claimed the oil peak was imminent. From then on, there’ve been many versions of the same refrain: The End (of oil) is nigh.

In respect to Newberry, Hubbert, Bartlett, Udall, and all the other “end is nigh” guys, there is validity to their theory. At some point in the future, the rate of global oil production will max out and then begin to decline. And it’s quite possible that we may not have cheap and easy substitutes for oil when that occurs, so there’ll be some significant changes for the world. But it’s also quite possible that we’ll develop substitutes for oil long before the cost of extraction, by itself, produces an oil peak; instead, the peak would result from our preferring — and thus shifting to — the substitutes. After all, that’s what has produced many previous natural resource shifts.

But let’s assume the former scenario plays out. Does that mean we are, indeed, doomed? And should we thus adopt the GAO report’s two policy recommendations that the U.S. government (1) carry out a massive global information-gathering effort to determine when the oil peak will occur, and (2) orchestrate a bold, unified national program to prepare for the peak oil transition to substitutes?

Let’s consider the policy recommendations first. Given the U.S. government’s track record on determining Iraq’s supply of weapons of mass destruction, how wise would it be to rely on the government to estimate the future supply of known and unknown sources of oil in Iraq, Iran, Saudi, Nigeria, Russia, Kuwait, Syria, Venezuela, China, Cuba, under the world’s oceans, etc.? How reliable would be government projections of the future technological developments that will increase human abilities to access that oil? Moreover, given that the U.S. government’s only great success in developing and broadly implementing an alternative energy program is nuclear power, do we really want it to be orchestrating a national program for a major transition to new energy sources? (I won’t mention the risk that the government, in carrying out these policies, would “fix” its findings and efforts around various politicians’ agendas.) If we are solely dependent on government to save us from the ruination of peak oil, then we probably are doomed.

So, does this mean that we should do nothing? Quite the opposite, quite the opposite — we should, and already are, acting boldly on energy. There are countless scientists, engineers, business executives, economists, and others, both in the United States and abroad, exploring and developing all sorts of transition strategies and technologies to substitute for oil. And there are countless scientists, engineers, business executives, and others, both in the United States and elsewhere, who are exploring and developing strategies and technologies to extend the life of the oil we have yet to extract. And we consumers have the best (and only necessary) incentive to utilize those developments when it makes sense to do so — we have to pay for the oil and alternative energies that we use. Those dynamics are far broader, more powerful, and more effective than any government Great (Energy) Leap Forward would be.

Bartlett, Udall, and the GAO are correct to be thinking about peak oil. But realizing that oil will peak one day is only the beginning of a thoughtful policy discussion, not the clinching demonstration that immediate government action is necessary. The only necessary (and sufficient) government energy policy is to allow consumers, innovators and entrepreneurs the degrees of freedom to make their own energy choices and to experience the costs and benefits of those choices.

Government is not the sole enlightened, rational actor on the planet. (Some might say the word “sole” should be removed from the previous sentence.) Somehow, we need to get the politicians to discover that.

Politicians — You Gotta Love ‘Em

Of what other group can it be said that you really can’t trust anything they say? Sure, Mary McCarthy said of Lillian Hellman that “every word she writes is a lie, including ‘and’ and ‘the.’ ” But she didn’t say that about writers as a group.

Mitt Romney’s newfound deep commitment to social conservatism has drawn lots of skepticism. But now he’s rewriting his life story in the fashion of lifelong Yankees fan Hillary Clinton and coal miners’ boy Joe Biden:

Former Massachusetts governor Mitt Romney (R) is taking some heat for not packing it.

Campaigning in New Hampshire this week, the candidate for the Republican presidential nomination told an audience that he is a “lifelong hunter,” according to the Associated Press. “I’ve been a hunter pretty much all my life,” the news service reported.

But the campaign now acknowledges that the former governor has been hunting twice in his life — once when he was young and lived on a ranch in Idaho, and more recently on a quail-hunting trip in Georgia with GOP donors.

Politicians — you gotta love ‘em.

High-Tech Welfare for High-Tech Billionaires

Voters in a New Mexico county appear to have approved a tax increase to build the nation’s first commercial spaceport. Two other counties will also hold tax referendums before the project can proceed. British billionaire Richard Branson and his company Virgin Galactic have signed a long-term lease to use the spaceport.

But why should the taxpayers of rural New Mexico be paying for facilities for billionaire space entrepreneurs? If the spaceport is going to be profitable, then businesses could pay for it. And even if it weren’t profitable, the space business has attracted the attention of a lot of people with a sense of adventure and billions of dollars, from Branson to Microsoft cofounder Paul Allen, the seventh richest man in America.

The argument to spend tax dollars on the spaceport is very similar to the argument for tax-funded stadiums and convention centers. Proponents say it will bring jobs and tax revenues to the three rural counties. But apparently it isn’t a sure enough thing for businesses to invest their own money.

Cato scholars have argued for years against corporate welfare. The spaceport is a classic example of corporate welfare, though in this case it might better be called billionaire welfare. It will transfer money from middle-class and working people to subsidize businesses and billionaires who won’t have to invest their own money — just like the typical stadium deal, paid for by average taxpayers to benefit millionaire players and billionaire owners.

At least in this case the voters get to decide, which rarely happens with stadium subsidies. The vote pitted “political, business and education leaders” against retirees and groups representing the poor.

“I’m not opposed to the spaceport, but I think it’s a terrible idea to tax poor people to pay for something that will be used by the rich,” said Oscar Vasquez Butler, a county commissioner who represents many of the unincorporated rural colonias where the poorest New Mexicans live, often without proper roads and water and sewage systems. “They tell us the spaceport will bring jobs to our people, but it all sounds very risky. The only thing we know for sure is that people will pay more taxes.”

Using Markets to Solve Water Shortages

South Florida is suffering a water shortage, but the shortage only exists because politicians are unwilling to allow market-based pricing. There is no shortage in the markets for air conditioners, automobiles, and haircuts, but that is because prices are allowed to rise and fall to reflect market conditions.

An article posted at TCSDaily.com offers a first-hand account of living with government-imposed price restrictions and draws an appropriate analogy to the price controls that caused gasoline shortages in the 1970s:

So here we are, in the spring of 2007, with rain below average, with a low lake level, little else in the way of reservoirs, and a water shortage. What is the response? Well, a rational response might be to price a scarce commodity such that people will use it only as they need it, and not frivolously. …Instead, we get the response of the local commissars. So, not allowing the market to work, and not allowing prices to provide signals to the participants, they have decided to run our lives for us.

…I live at an odd numbered address. That means that if I want to water my lawn, I can only do it on Monday, Wednesday and Saturday mornings, from four to eight AM. I can water my plants with a hose on the same days, but only between five and seven PM. My neighbors across the street, and behind my house on the next block, get Sunday, Tuesday and Thursday.

…Over thirty years ago, in the first OPEC oil embargo, the government, rather than allowing prices to rise to account for the reduced supply, told people when they could purchase gas based on the parity of their license plate — even one day, odd the next. My recollection was that this did nothing to alleviate the shortage — the lines remained. The problem was only solved when Nixon-era price controls on oil were lifted, the market was allowed to work, and oil prices eventually (and it didn’t take all that long) fell to historical lows.

…[H]ere’s a radical concept. How about pricing the commodity to the market? Maybe, if people had to pay more for water to water their lawn, they’d use less of it? Yes, I know that it’s hard to believe, but there really are some people out there who buy less of something if the price is higher.

John Edwards and Family Decisions

More than a week after Senator John Edwards’s decision to remain in the presidential race despite the recurrence of his wife Elizabeth’s cancer, pundits are starting to sharply criticize the decision. They say that he is consumed by ambition and that his priorities are out of whack.  They say that he should be spending time with his wife and especially with his two small children.

I had a similar reaction: these two children need their parents with them now more than ever.  They may lose their mother soon.  And if their father spends two years campaigning, they won’t see much of him.  If his campaign is successful, they won’t spend time much time with him for the rest of their childhood.

But who am I to judge the intimate family decisions of John and Elizabeth Edwards?  I can’t possibly know as much about their values and goals as they do.

If John and Elizabeth Edwards have spent the past ten—or fifteen—or twenty years working toward the White House, it may well be their very considered decision that that effort should continue.  In particular, it may be that the one thing Elizabeth Edwards wants most in her life is to see her husband in the White House.  Assuming that Elizabeth Edwards genuinely believes that John would be a good president (I don’t, but I’m not making the decision), then she may very well have decided that what he can do for the country is more important than what he can do for his children. As Rick said to Ilsa in Casablanca, “it doesn’t take much to see that the problems of three little people don’t amount to a hill of beans in this crazy world.”

So pundits would do well to assume that no one knows the trade-offs involved in the Edwardses’ decision better than the Edwardses.  In this case, as in so many others, it makes sense to let the people most closely involved in the decision make that decision.

But here’s the irony.  John Edwards doesn’t believe that families should be allowed to make the important decisions about their lives.  He doesn’t think families should be allowed to decide where their children will go to school.  He doesn’t think families should be allowed to decide how or whether to save for retirement.  He doesn’t think families should be allowed to decide what drugs to use, either pharmaceutically or recreationally. He supports a national health care system that would deny families the right to choose their own doctor.

In this presidential year, it would be good for Americans to reaffirm our commitment to the principle that families—not pundits and not government—should make the important decisions about their lives.

Supreme Court to EPA: Hurry Up and Wait?

Lots of news outlets have been describing the Supreme Court’s opinion in Massachusetts v. EPA along the following lines: “Supreme Court says global warming is bad; tells EPA to fix the problem.”

Is that right? Not really.

In fact, if you read between the lines of the majority’s decision, its not clear that it will alter EPA policy one jot or tittle.

“Regulation,” under the Clean Air Act, can take a number of forms: It can take the form of declaring aspirational emission standards. Or it can take more draconian forms, such as looming technology mandates and imminent implementation deadlines, backed by tough civil and criminal penalties.

Even assuming that, after the Court’s decision yesterday, the EPA has to “regulate” in the sense of promulgating some GHG emission standards, the Court’s decision leaves the EPA with ample room to argue that it can defer deciding when and how to implement those standards in light of the potentially high and uncertain costs of implementation.

Its true, of course, that some parts of the Clean Air Act prohibit the EPA from undertaking this sort of cost-benefit analysis. The parts of the CAA governing auto emission standards are, however, different. There, the EPA retains considerable discretion weigh costs and-benefits—particularly when it comes to the “when” and “how” of implementing emission controls. For example, as Justice Stevens notes, section 202(a)(2) of the CAA gives the EPA broad discretion to delay implementation of pollution controls to the extent that “the Administrator finds necessary to permit the development and application of the requisite [pollution control] technology, giving appropriate consideration to the cost of compliance within such period.” Put in plain English, that means that if the “costs” of developing effective pollution-reducing technologies are very large, and the pay off of this R&D is in the far-distant future, the CAA doesn’t require the EPA to implement its standards right away.

The Court’s opinion also reaffirms the great deference owed to the EPA’s decision not to enforce any standards that it might promulgate. In the words of Justice Stevens yesterday, an “agency has broad discretion to choose how best to marshal its limited resources and personnel to carry out its delegated responsibilities.” Given the breadth of discretion granted the agency to defer implementation under provisions like section 202(a)(2), and the costs and uncertainties associated with implementation, that deference may give the EPA very substantial room to defer—perhaps for a very long time—implementation of a federal GHG enforcement regime, freeing the EPA to deal with more immediate and pressing environmental problems.

Nor is analysis of the EPA’s leeway to delay implementation much different if, as some assume, the Court’s decision means that GHG emissions are also “pollutants” under CAA provisions dealing with “national ambient air quality standards.” True, in Whitman v. American Trucking Association, the Court held that the EPA must set NAAQS without regard to the costs of implementation. But in his concurrence in that case, Justice Breyer suggested that even CAA requirements governing national ambient air quality standards permit some modified cost-benefit analysis. He emphasized, for example, that when setting NAAQS, the EPA doesn’t have to eliminate “any health risk, however slight, at any economic cost, however great.” It is only required to eliminate “unacceptable” risks, defined as those that the public is not willing to tolerate at any cost.

New American car emissions count for only 6% of worldwide carbon dioxide emissions. Eliminating these emissions wouldn’t necessarily reverse global warming or even appreciably slow it—particularly given the dynamic nature of emissions in developing countries. Thus, its far from evident that the added global warming risks created by new American car emissions are “unacceptable” in the sense suggested by Justice Breyer.  On the face of the record, its also far from clear that the risks posed by other GHG-omitting sources in the U.S., such as stationary sources, are any more publicly “unacceptable” in the sense meant by Breyer, given uncertainty about the payoff of unilateral American remediation and given the cost and current feasibility of GHG control technology.

Ultimately, then, the key flaw with the EPA’s decision may not have been the outcome of that decision, or even the overarching reasons given by the EPA for its decision. The fatal flaw may have been only the conclusory nature of the reasons given by the EPA for its decision. For example, the EPA said that it wouldn’t act now because effective GHG-reducing technologies weren’t feasible at present and wouldn’t be feasible in the near future. But the EPA didn’t make any effort to quantify, or otherwise support with evidence, that feasibility assessment. Instead, it offered its conclusions as facts that courts must accept at face value—something five justices weren’t willing to do. But if the EPA can supplement its feasibility conclusions with at least some evidence, it may be able to pull at least one or two justices—most likely Breyer or Kennedy–into the dissenters’ orbit.

(This post is cross-posted at ScotusBlog).