Appreciating Abundance

Thanks to market exchange, Americans enjoy a greater variety of food choices, pay less for groceries than before, and have more income left over after grocery expenses. And, of course, this abundance is not limited to food, but extends to material goods and technology.

Bafflingly, there are those who bemoan abundance. Bernie Sanders, to name one, has said, “You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers.”

When grocery-shopping to stock up for the impending blizzard, many of us on the U.S. East Coast were met with extremely limited choices and nearly barren aisles. When I attempted to buy sliced cheese, for example, there was only a single kind left: Swiss. There was no provolone or Muenster or pepper jack or cheddar or Colby any of the other varieties normally available. Although I find Swiss cheese bland, I bought it because it was my only option. I and many others were “living the dream” of those who romanticize scarcity.

An economics professor summed up the situation in this humorous tweet:

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Cruz Introduces Education Savings Accounts Legislation

Yesterday, Sen. Ted Cruz introduced legislation to create an education savings account (ESA) program for students in Washington, D.C. In a press release, Cruz’s office stated that the legislation was modeled after Nevada’s ESA, and Cruz called educational choice “the civil rights issue of our era.”

“Each and every child has the right to access a quality education,” Sen. Cruz said. “Not only does school choice give low-income children the same choices and opportunities that children from wealthy families have always had, it also improves the public schools, making them stronger and more effective. This legislation ensures that every child in Washington, D.C., regardless of race, ethnicity, or zip code, has the same opportunity to choose the school that best fits their needs and will help them achieve their very best.”

Last September, Lindsey Burke of the Heritage Foundation and I explained why it’s imperative to break the link between housing and education in D.C. and how an ESA could do just that:

Sadly, access to a quality education is too often dependent on a family’s ability to purchase a home in an expensive area. As The Washington Post reported recently, the median price of a three-bedroom home in a D.C. neighborhood zoned to a public school where reading proficiency rates exceed 80 percent is about $800,000. The median price of similar homes near Eaton Elementary, where the Hills enrolled their children, is north of $1 million. Where the Hills resided in Maryland the median home prices ranged from a much more affordable $330,000 to $460,000.

There is a strong correlation between these housing prices and school performance. In nearly all D.C. neighborhoods where the median three-bedroom home costs $460,000 or less, the percentage of students at the zoned public school scoring proficient or advanced in reading was less than 45 percent. Children from families that could only afford homes under $300,000 are almost entirely assigned to the worst-performing schools in the District, in which math and reading proficiency rates are in the teens.

If policymakers truly believe in equality of opportunity, they must do more to sever the link between education and housing. The District has taken some important steps in the right direction — allowing parents to apply to charter schools and out-of-boundary district schools — but long waiting lists at the best schools have limited their usefulness for most families. […]

ESAs are restricted-use savings accounts parents can use to purchase a wide variety of educational products and services using a portion of the public funding that would have been spent on their child at their assigned district school.

ESAs are an improvement on the traditional voucher model because they empower families to completely customize their child’s educational experience. In addition to private school tuition, parents can spend ESA funds on tutors, textbooks, online courses, special education services and therapies, home-school curricula, and individual public school courses. ESAs even enable families to roll over unused funds from year to year.

These features also make ESAs more economically efficient than vouchers. Whereas traditional vouchers must be spent in their entirety at a single school each year, thereby creating a price floor, there is no minimum amount that ESA holders must spend in one place. The ability to spend ESA funds at multiple vendors or save them for future educational expenditures also gives parents a stronger incentive to economize, which should mitigate tuition inflation. […]

Because the District is under federal jurisdiction, Congress has a rare opportunity to advance a robust school choice option that is both constitutionally appropriate and would make a real difference in the lives of its young citizens by making every child in D.C. eligible for an ESA.

What the President Should Do: Civil Asset Forfeiture

As President Obama counts down the days of his last year in office, one positive step he could take for his legacy would be to halt the federal government’s use of civil asset forfeiture and make the suspension of the equitable sharing program permanent.   

Civil asset forfeiture, which allows the government to seize your cash and property without ever charging you with a crime, is rife with abuse and violates many cherished principles such as due process, separation of powers, federalism, and private property rights.  The predatory practice has become so prevalent that in 2014, for the first time on record, law enforcement officers took more money from Americans under federal forfeiture law than burglars stole from their victims.  More than $5 billion was deposited into the Treasury Department and Justice Department forfeiture funds, and that astonishing figure doesn’t include seizures that were purely state-based.
 
Further compounding the abusive nature of civil forfeiture is the federal government’s equitable sharing program, which allows state and local cops in states with restrictive forfeiture laws (or none at all) to circumvent their state laws and seize property under more-permissive federal law in exchange for an 80% kickback of the proceeds.  The Department of Justice recently suspended the equitable sharing program, citing a budget shortfall, but it’s clear from the suspension statement that the Justice Department plans to restart the program in the future.
 
Civil asset forfeiture creates an inappropriate profit motive for predatory policing, it distorts the priorities of law enforcement, and it tramples our constitutional principles.  President Obama should take the time to end these practices before he leaves office.
  
For more information about civil asset forfeiture, check out our civil forfeiture explainer on PoliceMisconduct.net.
 
And for an updated version of the Institute for Justice’s fantastic national survey of civil forfeiture practices, check out Policing for Profit, 2nd Edition.

On the Bright Side: The Effects of Elevated CO2 on Two Coffee Cultivars

Compliments of rising atmospheric CO2, in the future you can have a larger cup of coffee and drink it too!

In the global market, coffee is one of the most heavily traded commodities, where more than 80 million people are involved in its cultivation, processing, transportation and marketing (Santos et al., 2015). Cultivated in over 70 countries, retail sales are estimated at $90 billion USD. Given such agricultural prominence, it is therefore somewhat surprising, in the words of Ghini et al. (2015) that “there is virtually no information about the effects of rising atmospheric CO2 on field-grown coffee trees.” Rather, there exists only a few modeling studies that estimate a future in which coffee plants suffer (1) severe yield losses (Gay et al., 2006), (2) a reduction in suitable growing area (Zullo et al., 2011), (3) extinction of certain wild populations (Davis et al., 2012) and (4) increased damage from herbivore, pathogen and pest attacks (Ghini et al., 2011; 2012; Jaramillo et al., 2011; Kutywayo et al., 2013), all in consequence of predicted changes in climate due to rising atmospheric CO2.

In an effort to assess such speculative model-based predictions, the ten-member scientific team of Ghini et al. set out to conduct an experiment to observationally determine the response of two coffee cultivars to elevated levels of atmospheric CO2 in the first Free-air CO2 Enrichment (FACE) facility in Latin America. Small specimens (3-4 pairs of leaves) of two coffee cultivars, Catuaí and Obatã, were sown in the field under ambient (~390 ppm) and enriched (~550 ppm) CO2 conditions in August of 2011 and allowed to grow under normal cultural growing conditions without supplemental irrigation for a period of 2 years.

No significant effect of CO2 was observed on the growth parameters during the first year. However, during the growing season of year 2, net photosynthesis increased by 40% (see Figure 1a) and plant water use efficiency by approximately 60% (Figure 1b), regardless of cultivar. During the winter, when growth was limited, daily mean net photosynthesis “averaged 56% higher in the plants treated with CO2 than in their untreated counterparts” (Figure 1c). Water use efficiency in winter was also significantly higher (62% for Catuaí and 85% for Obatã, see Figure 1d). Such beneficial impacts resulted in significant CO2-induced increases in plant height (7.4% for Catuaí and 9.7% for Obatã), stem diameter (9.5% for Catuaí and 13.4% for Obatã) and harvestable yield (14.6% for Catuaí and 12.0% for Obatã) over the course of year 2. Furthermore, Ghini et al. report that the increased crop yield “was associated with an increased number of fruits per branch, with no differences in fruit weight.”

One Sentence, or, Unpacking the Truth about the Founding of the Bank of France

When, in my days as a professor, I occasionally assigned term papers, I used to smile when students wondered out loud how they could possibly come up with enough to say to fill a whole 20 (or 15, or 5, or whatever) pages.  After all, the problem, once you got to be where I was, wasn’t having too much space: it was not having space enough to say what needed saying.  It was all I could do sometimes to squeeze my ideas into the 25 double-spaced typescript page-limit that prevailed among scholarly economics journals.

These days I’m no longer compelled to wrestle with academic journal editors, thank goodness.  But I still face strict length limits now and then, like the one I’m confronting as I finally get around to writing my long-overdue review of Roger Lowenstein’s America’s Bank: The Epic Struggle to Create the Federal Reserve. I’m supposed to limit the review to 1000 words.  Yet I could easily write 20,000 words about that book.  In fact I have written 20,000, and then some, in the shape of a Cato Policy Analysis called “New York’s Bank: the National Monetary Commission and the Founding of the Fed.” Our respective titles give you some idea of where Lowenstein and I differ.  Anyway, the PA isn’t ready yet.  When it is, probably about a month from now, I will let you know.

Despite that PAs length, it also leaves much unsaid.  It says nothing at all, for example, about the seemingly innocuous sentence in chapter five of America’s Bank that reads: “The Bank of France was chartered in 1800 as an antidote to the financial turmoil of the French Revolution.”

Persuading China to Cooperate against North Korea

Another North Korean nuclear test, another round of demands that China bring Pyongyang to heel. Said Secretary of State John Kerry: Beijing’s policy “has not worked and we cannot continue business as usual.” Alas, his approach will encourage the PRC to dismiss Washington’s wishes.

The People’s Republic of China joined Washington in criticizing the latest blast. The PRC is the most important investor in and provides substantial energy and food assistance to the North. Beijing also has protected the Democratic People’s Republic of Korea by weakening past UN sanctions and enforcing those imposed with less than due diligence. If only China would get tough, runs the argument, the Kim Jong-un regime in Pyongyang would have to give way.

Alas, Chinese intervention is not the panacea many appear to believe. Contra common belief in Washington, the U.S. cannot dictate to the PRC. Threats are only likely to make the Chinese leadership more recalcitrant.

In fact, Beijing’s reluctance to wreck the North Korean state is understandable. If the administration wants to enlist China’s aid, it must convince Beijing that acting is in China’s, not America’s, best interest.

While unpredictable, obstinate, and irritating, so far the DPRK is not a major problem for China. The North disrupts American regional dominance and forces Seoul and Washington to beg for assistance in dealing with the DPRK. Even Pyongyang’s growing nuclear arsenal poses no obvious threat to China.

Why, then, should the PRC sacrifice its political influence and economic interests? A Chinese cut-off of energy and food would cause great hardship in the North. But a half million or more people died of starvation during the late 1990s without any change in DPRK policy.

Thus, the DPRK leadership may refuse to bend. The result might be a return to the 1990s, with a horrific collapse in living conditions but regime survival—and continued development of nuclear weapons.

Will China Accept Taiwan’s Political Revolution?

In one of the least surprising election results in Taiwanese history, Tsai Ing-wen has won the presidency in a landslide. Even more dramatically, the Democratic Progressive Party will take control of the legislature for the first time. Tsai’s victory is a devastating judgment on the presidency of Ma Ying-jeou.

With the imminent triumph of the Chinese Communist Party, Chiang Kai-shek moved his government to the island in 1949. For a quarter century Washington backed Chiang. Finally, Richard Nixon opened a dialogue with the mainland and Jimmy Carter switched official recognition to Beijing. Nevertheless, the U.S. maintained semi-official ties with Taiwan.

As China began to reform economically it also developed a commercial relationship with Taipei. While the ruling Kuomintang agrees with the mainland that there is but one China, the DPP remains formally committed to independence.

Beijing realizes that Tsai’s victory is not just a rejection of Ma but of China. Support even for economic cooperation has dropped significantly over the last decade.

Thus, China’s strategy toward Taiwan is in ruins. In desperation in November Chinese President Xi Jinping met Ma in Singapore, the first summit between the two Chinese leaders. Beijing may have hoped to promote the KMT campaign or set a model for the incoming DPP to follow.

Xi warned that backing away from the 1992 consensus of one China could cause cross-strait relations to “encounter surging waves, or even completely capsize.” While Tsai apparently plans no formal move toward independence, she also rejects the 1992 consensus of “one China, separate interpretations.”

As I point out in Forbes: “Washington is in a difficult position. The U.S. has a historic commitment to Taiwan, whose people have built a liberal society. Yet America has much at stake with its relationship with the PRC. Everyone would lose from a battle over what Beijing views as a ‘renegade province’.”

Washington should congratulate President-elect Tsai, but counsel Taipei to step carefully. Taiwan’s new government shouldn’t give the PRC any reason (or excuse) to react forcefully.

The U.S. should accelerate efforts to expand economic ties with Taiwan. Doing so would affirm America’s commitment to a free (if not exactly independent) Taiwan by other than military means.

America should continue to provide Taipei with weapons to enable it to deter if not defeat the PRC. At the same time, the new government should make good on the DPP’s pledge to make “large investments” in the military. It makes little sense for the U.S. to anger Beijing with new arms sales if Taipei is unwilling to spend enough to make a difference.

Washington should press friendly states throughout Asia, Europe, and elsewhere to communicate a consistent message to China: military action against Taiwan would trigger a costly reaction around the world. The mainland would pay a particularly high economic and political price in East Asia, where any remaining illusions of a “peaceful rise” would be laid to rest.

Finally, American officials should explore ideas for a peaceful modus vivendi. One possibility is for Washington to repeat its acceptance of “one China” and eschew any military commitment to Taiwan.

Taipei would accept its ambiguous national status and announce its neutrality in any conflicts which might arise in East Asia, including involving America and Japan. The PRC would forswear military means to resolve Taiwan’s status and reduce the number of missiles in Fujian targeting the island.

The objective would be to make it easier for both China and Taiwan to “kick the can down the road.” A final resolution of their relationship would be put off well into the future.

 The ROC’s people have modeled democracy with Chinese characteristics. Hopefully someday the PRC’s people will be able to do the same.

In the meantime, President-elect Tsai is set to govern a nation which has decisively voted for change. However, if the PRC’s leaders fear they are about to “lose” the island—and perhaps even power at home—they may feel forced to act decisively and coercively. International ambiguity remains a small price to pay to avoid a cross-strait war.