“Vascular Restraint”

Tennessee Bureau of Investigation is looking into an officer’s chokehold.  The choke was not used against a violent individual.  It was used against a young man who was already in handcuffs.  Suspicion of marijuana possession.  The young man quickly faints.

Video clip here.  For more on the drug war, go here.  For more about doublespeak, go here.

Voucher Valedictorian

NRO has an editorial today by that title, sharing the story of Tiffany Dunston: class valedictorian at Archbishop Carroll High School in Washington, D.C. and first person in her family to attend college (she’s headed for Syracuse to study biochemistry and French). As it happens, she was attending Carroll thanks to financial assistance from DC’s voucher program, and her mother couldn’t otherwise have afforded the tuition. “I started praying every day because I didn’t want to go to a neighborhood school,” Tiffany told a reporter. “I was so nervous — there was no way to know if I was going to get the scholarship.”

Actually, though, there is a way she could have known that she would get the financial assistance she needed: if Congress and the City council replaced DC’s $24,600 per pupil monopoly with a universal system of school choice.

Instead, it seems likely that the next Congress will kill the fledgling school choice program that made Tiffany’s dreams come true. Over the coming year, congressional opponents of school choice must ask themselves: is it right to steal children’s dreams to curry favor with public school employee unions?

Liberalism in China

The New Yorker reviews Beijing Coma, a novel by Ma Jian, a Chinese exile who was at the Tiananmen protests in 1989. Reviewer Pankaj Mishra says that, like Milan Kundera, Ma knows that “the struggle of man against power is the struggle of memory against forgetting.” He wants to make sure that the Chinese don’t forget the Tiananmen protesters and what they were protesting. Even before 1989, Ma Jian had been denounced as an example of ”bourgeois liberalism” and “spiritual pollution.”

I was particularly struck by a couple of lines in the review:

Reciting Allen Ginsberg’s “Howl” to a fellow-writer, he mocked Ginsberg’s angry rejection of America. “He implies his country is not fit for humans to live in. Well, he should live in China for a month, then see what he thinks. Everyone here dreams of the day we can sing out of our windows in despair.”

In his memoir, Red Dust, published in 2002, Ma described his travels through China in the mid-1980s, in the midst of Deng Xiao-ping’s economic liberalization and before the Tiananmen crisis:

Ma Jian not only seems to have relished his own improvised life; he also appears to have embraced some of his country’s entrepreneurial exuberance. In one of the book’s many bracingly unexpected scenes, he finds himself exhorting the residents of an isolated village, “This country is changing, opening up. You can’t just stay here like vegetables. You should travel, broaden your minds. Haven’t you heard about Shenzhen Economic Zone?”

Ma Jian says his next book will be about China’s inhuman family-planning policy. It’s no wonder that his books are banned in China; if only American writers understood the liberating potential of economic freedom and the comforts of life in capitalist society as well as writers who lived under the alternative.

Nordhaus’s Less-than-optimal Climate Strategy

In “Pointless to rush a carbon emissions plan,” the Toronto Globe and Mail’s Neal Reynolds compares Yale Professor William Nordhaus’s “optimal” approach to controlling greenhouse gases and finds it superior to approaches that would impose deeper controls more rapidly, such as those favored by Stern, various EU leaders, and many in the US.

Under the Nordhaus approach, which is also discussed by Keith Johnson at the Wall Street Journal, costs of control would start at 0.3 per cent of global GDP in 2010 (currently around $60,000 billion), increase to 0.5 per cent in 2015, 0.6 per cent in 2020 and peak at 0.9 per cent in 2065. He estimates the net present value (NPV) of climate change damages absent any controls at $22 trillion. Under this so-called “optimal” approach, the NPV costs of controls would be $2 trillion and climate change damages would be reduced by $5 trillion (i.e., the “optimal” policy would provide net benefits of $3 trillion, but residual damages would be $17 trillion). As he explains, “More of the climate damages are not eliminated because the additional abatement would cost more than the additional reduction in damages.”

He also estimates that proposals that emphasize “excessively early reductions [make] the policies much more expensive… For example, the Gore and Stern proposals have net costs of $17 trillion to $22 trillion relative to no controls; they are more costly than doing nothing today.” By his calculations, his proposal is clearly superior to these other reduction proposals.

However, while Nordhaus’s prescription may indeed be the most “optimal economic approach” to slow global warming, it isn’t the optimal approach to addressing global warming. This is because it ignores adaptation. Some adaptations may reduce climate change damages more efficiently than mitigation. Perhaps all or part of the $2 trillion that Nordhaus would spend on mitigation should, instead, be invested in adaptation. That might reduce damages by more than the $5 trillion. In any case, with adaptation in the mix, $5 trillion may well be the lower bound for the optimal reduction in climate change damages. And, of course, emission reductions that seem to be optimal under 0.9 percent of GDP in 2065 in the absence of adaptation may, once adaptation is thrown into the mix, no longer be optimal.

In fact, a recent Cato Policy Analysis indicates that in the short-to-medium term, adaptation — specifically, reducing vulnerability to climate-sensitive problems that might be exacerbated by climate change — would provide greater benefits than mitigation, and at a much lower cost. Most of those benefits come from the fact that one approach to adaptation is to advance adaptive capacity. Significantly, that can help society cope not only with climate change but, more importantly, to other problems that are more important than climate change now and in the foreseeable future. Thus the ancillary benefits of increasing adaptive capacity are very high, higher than climate change damages in the absence of any controls according to the Cato Policy Analysis.

Notably, Nordhaus acknowledges to having “relatively little confidence in our projections beyond 2050.” To his credit, this skepticism informs his recommended approach, but it would probably have been best to avoid stretching the analysis to 2200.

Sometimes such long-range analyses are justified on the grounds that that’s the best that can be done. But even if that’s so, it misses the real issue, namely, whether even the best available analysis is good enough for making trillion-dollar decisions which, moreover, extend out centuries hence. At these temporal distances, Nostradamus may be just as credible as Nordhaus, or Nicholas Stern, for that matter.

Humility isn’t an offense, and it ought to be acceptable for economists and policy analysts—even those whose stock in trade is climate change—to admit that they haven’t a clue what the world will look like beyond 2050 (if then).

Nordhaus’s numbers indicate that estimates of pre-control damages and post-control residual damages frequently are substantially larger than either the costs or benefits of emission controls. But the treatment of damages (i.e., impacts) of climate change in the Nordhaus analysis is somewhat sketchy. As far as I can determine, none of the damage studies properly account for adaptive capacity, particularly considering that that capacity ought to increase if societies accumulate wealth, human capital and technology at rates implied by all the socioeconomic scenarios used to derive future emissions (and climate change). (See, for example, here.) Thus, both pre-control climate change damages and post- control residual damages could be substantially overestimated.

[Some argue that they disbelieve that economic growth will be as high as assumed, but in that case they should also disbelieve estimates of future climate change and impacts predicated on that growth.]

To summarize, the Nordhaus analysis probably overestimates climate change damages. In any case, the Nordhaus approach could be made more optimal by adding to it an adaptation component that would enhance societies’ adaptive capacities (by reducing present day vulnerabilities to climate-sensitive problems and boosting economic development and human capital in developing countries). In fact, optimal carbon taxes (or cap-and-trade approaches) can only be determined after completion of more comprehensive analyses that include full and equal consideration of adaptation and any ancillary (net) benefits.

Of course that still leaves the problem of relying on analyses over time frames that demand, in Coleridge’s words, “willing suspension of disbelief.” Instead of suspending disbelief and succumbing to gullibility, I would recommend a somewhat different approach (see here, p. 37).

More on Randy Vanderhoof and Privacy

Who is Randy Vanderhoof, you say?

More than a year ago, I posted here about a quote Randy Vanderhoof of the Smart Card Alliance had given to Federal Computer Week:

Privacy concerns are all perception and hype and no substance but carry considerable weight with state legislators because no one wants to be accused of being soft on privacy.

Though I’m not sure, I have a vague recollection that someone from his organization called me up or emailed and explained that he was misquoted. All a misunderstanding.

So I was interested in a Q&A Randy Vanderhoof had with David Pogue of the New York Times recently. Asked about the obstacles to adoption of smart cards in the U.S., he said:

It’s the business rules and legal barriers that are the biggest obstacles to overcome, and some cultural norms have to change as well, like the privacy advocates who don’t trust any technology that touches their identities (especially if the government is somehow in the middle).

There may be some privacy advocates that don’t trust any technology touching identity, but maybe it’s that all the technologies touching identity yet seen fail to meet the demands of the public for privacy and data security - especially if the government is in the middle.

I’m all for changing cultural norms. The dismissive culture at the Smart Card Alliance seems to be the right place to start.

Norway’s Hypocritical Government Launches Attack Against Low-Tax Jurisdictions

The Norwegian government has appointed a one-sided commission to investigate the supposed damage caused by tax havens. A leftist news service reports on this development, and regurgitates a discredited estimate from Oxfam about how low-tax jurisdictions ostensibly deprive politicians in the developing world of tax revenue:

A new commission appointed by Norway will investigate ways of putting a stop to the huge flows of money into tax havens. Tax evasion and corruption are believed to cost poor countries at least 50 billion dollars a year. The commission, launched last week, includes Eva Joly, a special advisor on corruption for the Norwegian development agency Norad… Among the areas that have been labelled as tax havens are Andorra, Monaco, Gibraltar, Jersey, the Cayman Islands, Luxembourg, the Netherlands, as well as some parts of the financial system in London. “I am very proud of this commission and I think it is very important that it has been appointed, because there is quite a high level of confusion surrounding the damaging effects of tax havens,” Joly, who is also part of an anti-corruption working group at the World Bank, told IPS. …According to a 2000 estimate by Oxfam International, tax havens rob developing countries of at least 50 billion dollars a year in revenues.

An amusing aspect of this story is that Norway’s pension fund is a big investor in tax havens:

Finance Minister Kristin Halvorsen and the minister in charge of foreign aid, Erik Solheim, have harshly criticized companies, both Norwegian- and foreign-owned, that avoid taxes by registering themselves in countries with low or non-existent tax obligations. At the same time, however, the state’s massive pension fund that’s fueled by Norway’s oil revenues has been investing billions in companies that are registered in tax havens. This includes companies “based” in places like the Cayman Islands, Bermuda and Cyprus.

The moral of the story, of course, is that politicians are in favor of anything that gives them more money. That enables them to buy votes and provide unearned wealth to their supporters. But taxpayers (the ones who generate the wealth) should not be allowed to protect themselves and their families by utilizing jurisdictions with better tax law.