Topic: Regulatory Studies

No Dice, Pickens!

Last Thursday on public radio’s Marketplace Morning Report, Bob Moon interviewed billionaire T. Boone Pickens about his highly self-publicized energy plan, which centers on using wind power to replace a portion of the natural gas used to create electricity, and then using that replaced natural gas to power cars. As it happens, Pickens has invested in a big way in windmills and is extremely well placed to profit from an increase in the use of natural gas-powered vehicles. But the part that bothers me most isn’t the fact that a billionaire is running a propaganda campaign in an effort to rig the regulatory structure to force consumers to buy what he sells – though that bothers me plenty. The part that bothers me most is the mixture of toxic nationalism and egregious economic illiteracy in the ads Pickens is airing to plump for his plan. Which brings us back to Moon’s interview with Pickens:

Moon: Let me ask you to respond to something that Will Wilkinson of the Cato Institute said in a commentary on Marketplace the other day. Here’s some of his criticism of you:

Will Wilkinson clip: He’s leaning hard on our worst nationalist impulses. What he’s really saying is, why buy the things you need from dangerous foreigners when you could be paying more to buy them from rock-ribbed Americans, like T. Boone Pickens.

Pickens: It’s more than me. I mean, this is about America. This isn’t about Boone Pickens and whether Pickens’ wind farm makes money or whatever happens to it. But I mean, here with $700 billion going out of the country, and let’s say that we could cut it in half – $350 billion in the United States, can you imagine how that would multiply for jobs here. I’d much rather that gonna $350 billion was being used here than to give some for foreign oil.

Allow me to point out that Pickens’ reply is nonsense. He continues to insist on characterizing mutually-beneficial exchange across borders as hundreds of billions of American dollars “going out of the country.” But, in a nutshell, the reason Americans bought all this oil from abroad was that they had no way to get more energy bang for their energy buck. Unless the prices of domestic energy sources decline relative to that of foreign oil, shifting domestic consumption to energy from domestically-produced sources will  require Americans to pay more for energy–leaving them less for everything else.

This is not a recipe for multiplying jobs. Rather, it would leave less money in the economy to start new businesses and to expand successful ones. This is a recipe to make ordinary American consumers poorer and energy corporations, like the ones Pickens owns, richer. If Pickens was making sense, the implication would be that Americans would be better off if we “in-sourced” everything. T. Boone Pickens, meet David Ricardo.

Either one of the world’s wealthiest men doesn’t understand elementary economics, which clearly tells us that his plan will make Americans poorer, or his plan is not really “about America.”

Here’s my July 31st Marketplace commentary on Pickens. And here’s Cato’s Jerry Taylor in March debunking “energy independence.”

New European Regulation Belongs in the This-Can’t-Possibly-Be-True Category

According to the Irish Times, European Union bureaucrats in Brussels have decided that people no longer should be allowed to eat cakes, tarts, and other treats entered in baking competitions. American bureaucrats love to concoct senseless rules, but can anyone think of a regulation in the United States that matches this gem?

New EU regulations have banned the consumption of cakes and confectionary entered at country fairs and agricultural shows immediately after baking competitions.

The chairman of Mayo County Council, Cllr Joe Mellett, said the new rules were the “death knell” for the Irish agricultural show.”

When you see things like this it’s no wonder the people voted No to the Lisbon Treaty. This will be the end of the traditional baking competition at local shows across the country, therefore impacting on local revenue. It’s just ridiculous.”

Under the rules adjudicators of bakery sections in local shows are only permitted to taste the traditional favourites such as apple tarts or cheese cakes. Once the judging is over, the produce must be immediately destroyed. As a result, only bite-sized versions of the cakes will be entered in shows…

…Mr Mellett, one of the founding members of his own local agricultural show in Swinford, said he “could not believe” the latest EU directive.

“Honestly, when I saw this first I thought it was something to do with April Fools’ Day. I just couldn’t imagine someone sitting down and coming up with this rule.”

When Did Hillary Clinton Become President of China?

The Wall Street Journal reports on the Chinese government’s energetic effort to improve the quality of its citizens:

Beijing officials have distributed 4.3 million copies of an etiquette book outlining rules on good manners and foreign customs, including rules about what not to wear. The guide is part of an effort by various departments within China’s government to clean the city up in preparation for the at least 400,000 foreign visitors who are expected to descend on its capital for the Olympic Games, which start Aug. 8.

Among the no-no’s: more than three color shades in an outfit, white socks with black shoes, and pajamas and slippers in public.

“No matter what, never wear too many colors…especially during formal occasions,” the book said. “When you wear [formal shoes], be sure to wear socks in good condition…socks should be a dark color – never match black leather shoes with white socks.”

“Older women should choose shoes with heels that aren’t too high,” it said.

The book, published by the Beijing Municipal Government’s Capital Ethics Development Office, is part of the department’s effort to make Beijing more “civilized,” officials said.

Along the same lines, Beijing authorities announced earlier this year that they would step up efforts to fine people who spit in public as much as 50 yuan ($7.33).

Other guidelines range from the obvious to overly specific. Public displays of affection aren’t acceptable, for example. In a section about escalators and elevators, the book said people should place their hands on escalator railings to avoid falling. It then addresses a pet peeve of many in Beijing: “When entering an elevator…let people walk out before you enter,” it said. It goes on to say riders should look only straight ahead and never stare at other passengers.

It also warns readers of the “Eight Things Not to Ask” foreigners, including their age, marital status, income or religious and political beliefs.

It sounds like the woman who wants to create government programs to help people “quit smoking, to get more exercise, to eat right, to take their vitamins” has found her niche.

Of course, you might suspect that the idea to require taxi drivers to wear uniforms came from John McCain.

10,000 Bills in Congress, and the Annual Spending Process Ignored

Before leaving for its August recess last week, Congress saw the introduction of its 10,000th bill. Meanwhile, not a single one of the twelve annual bills that direct the government’s spending priorities in 2009 has passed the Senate and only one has passed the House. Congress is neglecting its basic responsibility to manage the federal government, and is instead churning out new legislation about everything under the sun.

What does Congress occupy itself with? A commemorative postage stamp on the subject of inflammatory bowel disease. Improbable claims of health care for all Americans. And, of course, bringing home pork. Read about it on the WashingtonWatch.com blog.

Maryland Meets the Laffer Curve

Greedy politicians in Annapolis doubled the cigarette tax in Maryland for the ostensible purposes of reducing a budget deficit and financing more government spending. They increased spending (of course), but their tax hike is not generating much additional revenue. As the Washington Post reports, consumers are adjusting their behavior to minimize their tax burden:

Cigarette sales have dropped by nearly 25 percent in Maryland since the state’s tobacco tax doubled in January, as sticker shock apparently has curtailed some residents’ smoking and sent others across the border for better deals. Maryland lawmakers voted last fall to raise the tax to $2 a pack to help bridge a budget shortfall and expand subsidized health care. Fiscal analysts predicted that the new rate, the sixth highest in the nation, would cause cigarette sales to drop off, following a pattern with past increases. But the decline during the first six months of the year significantly exceeded their projections, exacerbating Maryland’s budget problems… Legislative analysts say they are looking at the degree to which Marylanders are crossing borders to buy cheaper cigarettes. It seems to be happening to some extent. On a recent afternoon, two service stations along South Dakota Avenue NE in the District were packed with vehicles with Maryland tags, many belonging to commuters heading to Maryland by Route 50 or the Baltimore-Washington Parkway. “The tax is not going to stop people from buying cigarettes,” said Mike Brockington, a 40-year-old Prince George’s County resident, adding that he was purchasing cigarettes in the District because of Maryland’s tax increase. … Maryland law seeks to limit out-of-state cigarette purchases. It is illegal for Maryland residents to be in possession of more than two packs of cigarettes lacking stamps showing that taxes were paid in the state.