Archives: 05/2008

35 Million Americans Going Hungry Is Baloney

Washington Post columnist Shankar Vedantam starts his column today with:

About 35 million Americans regularly go hungry each year, according to federal statistics.

But it is simply not true that 35 million are “regularly” going hungry, as I’ve previously noted

The U.S. Department of Agriculture is the official source for such statistics. Here is what the agency says:

USDA does not have a measure of hunger or the number of hungry people. Prior to 2006, USDA described households with very low food security as ‘food insecure with hunger,’ and characterized them as households in which one or more people were hungry at times during the year because they could not afford enough food … In 2006, USDA introduced the new description ‘very low food security’ to replace ‘food insecurity with hunger.’

O.K., how big is the new group called “very low food security?” If you look at the chart here, you see that it is about 3% of the population (about 9 million people). These are the people with an episode of “very low food security” during even a short period of the year. For those with very low food security in the prior 30 days, the rate falls to about 2%, or about 6 million people.

Shankar Vedantam throws the phrase “each year” into his sentence, which blurs his statistic a bit. But if people go hungry only once a year, how could that be “regularly”? In any event, he has made the same error as many politicians and advocacy groups who use the grossly inflated 35 million figure.

I enjoy Vedantam’s column, which often highlights interesting data and research. But in this case, he should have recognized that more than 10% of Americans “regularly” going hungry didn’t pass the smell test.     


Can the Resource Curse Be Lifted?

Cato Unbound’s May edition discusses the resource curse. Numerous studies confirm that countries rich in natural resources tend to be poor in property rights, individual liberty, and the rule of law. Is this just a deep, and deeply depressing, feature of the world we live in? Or can wealthier countries (which make up the market for most of these resources) and international institutions somehow intervene to alleviate or even lift the resource curse?

Philosopher Leif Wenar opens up the discussion by charging that you – yes you – are almost certainly the recipient of stolen goods, resources that clearly shouldn’t have belonged to the dictators who first sold them. Wenar then offers a simple but provocative solution to the resource curse, one that will hold kleptocracies responsible for their thefts.

The discussion will feature Cato senior fellow Andrei Illarionov, the former chief economic advisor to Vladimir Putin;  journalist and historian John Ghazvinian, author of Untapped: The Scramble for Africa’s Oil; and Washington University political philosopher Christopher Wellman, an expert in matters of international justice.  Could Wenar’s proposal succeed?  What are the obstacles along the way?  What else, if anything, can developed countries do to end the resource curse?  Be sure to check out Cato Unbound throughout the week, as discussion develops over one of the most pressing humanitarian issues of our time.

Congress Tries to Stunt HSA Growth

I’ve got an oped in today’s Orange County Register on congressional efforts to smother health savings accounts (HSAs) in the cradle:

In April, House Democrats passed legislation that would impose onerous and unnecessary reporting requirements on people with tax-free health savings accounts … what really bothers them is the fact that HSAs let workers control their own money.

Read all about it here.

Read about letting workers control all their health care dollars here.

REAL ID Deadline Passes - Zero Compliance

Yesterday - Sunday, May 11, 2008 - was the statutory deadline for state compliance with the REAL ID Act. Not a single state has begun issuing nationally standardized IDs as called for by the law. Nor are they putting driver information into nationally accessible databases.

Matthew Blake of the Washington Independent has a solid recap of the situation.

Rethinking Ethanol: A Lesson Only Half Learnt by the NY Times

Sunday’s NY Times acknowledges that:

It is time to end an outdated tax break for corn ethanol and to call a timeout in the fivefold increase in ethanol production mandated in the 2007 energy bill.

But then it goes on to state:

This does not mean that Congress should give up on biofuels as an important part of the effort to reduce the country’s dependency on imported oil and reduce greenhouse gas emissions. What it does mean is that some biofuels are (or are likely to be) better than others, and that Congress should realign its tax and subsidy programs to encourage the good ones. Unlike corn ethanol, those biofuels will not compete for the world’s food supply and will deliver significant reductions in greenhouse gases…

Congress’s guiding principle should be to tie federal help to environmental performance. The goal is not just to stop the headlong rush to corn ethanol but to use the system to bring to commercial scale promising second-generation biofuels — cellulosic ethanol derived from crop wastes, wood wastes, perennial grasses. These could provide environmental benefits and reduce dependence on oil without displacing food production.

But as noted on this blog previously, this is wishful thinking. Tilting the field to help cellulosic ethanol, whether directly through subsidies or indirectly through mandates, will inevitably make it more attractive for farmers to divert land and water to grow fuel rather than food. As a result some portion – perhaps even a large portion – of the resources that would otherwise be used for food production would go toward fuel production.

It is, therefore, naïve to claim that fuel production will not compete with food production. But the NY Times seems naïve about mandates, apparently assuming that mandates don’t entail costs, especially if they are in pursuit of goals it deems laudable.

One can get an inkling of the potentially disastrous effects of tilting the field toward biofuels (such as ethanol) from the Burmese experience regarding jatropha, a bush that can provide feedstock for biodiesel. The Wall Street Journal’s James Hookway reported last week that:

United Nations World Food Program officials say the storm wiped out much of Myanmar’s midyear rice harvest and add that grain stockpiles are dwindling because of the military’s jatropha drive. That makes it likely Myanmar’s plans to export rice this year to other needy nations such as Bangladesh will be scrapped…

The most notorious example of errant policy making reflects the fascination of 75-year-old junta leader Senior-Gen. Than Shwe with biodiesel as a way to break the country’s dependence on expensive imported oil.

In December 2005, the battle-hardened commander kicked off a nationwide campaign to grow jatropha, a squat, hardy bush that yields golf-ball-sized fruit containing a sticky, yellow liquid that can be made into fuel. His drive was similar to initiatives in other parts of the world, including the U.S., which encouraged farmers to grow corn, palm oil or other crops for biofuel and which are now facing criticism for driving up the price of food. [Emphasis added]

India, China and other countries grow jatropha on scrubby land where food crops can’t survive. But researchers say that in Myanmar, some of the country’s most fertile land has been converted to cultivating the shrub…

It isn’t clear how much of Myanmar’s arable land has been converted to jatropha cultivation. Organizations such as the U.N.’s Food and Agriculture Organization warned the government about the risks of farming jatropha on land that could be used to grow food. But Gen. Than Shwe’s goal was to set aside an area the size of Belgium to grow jatropha – a huge commitment for Myanmar, which is roughly the size of France.

In 2006, the chief research officer at state-run Myanmar Oil and Gas Enterprise said Myanmar hoped to completely replace the country’s oil imports of 40,000 barrels a day with home-brewed, jatropha-derived biofuel. Other government officials declared Myanmar would soon start exporting jatropha oil.

Despite the military’s efforts, the jatropha campaign apparently has largely flopped in its goal of making Myanmar self-sufficient in fuel.

While this is an extreme example of poorly conceived policy, it should be kept in mind that the Burmese regime was pursuing what many consider to be a laudable goal – energy independence (with – who knows – possibly the hope of obtaining carbon credits). And what a totalitarian regime can effect with fiat (and sticks), other governments can accomplish with a combination of seemingly more benign policies, specifically subsidies and mandates (i.e., carrots and sticks), in pursuit of the same laudable goals.

The lesson from all this, which the NY Times doesn’t quite get (reiterating from the earlier post) isn’t that biomass – and farmers — shouldn’t play a role in helping meet our energy needs, but that “If farmers can profitably grow fuel rather than food through their own efforts, so be it. But we shouldn’t favor growing one over the other either through subsidies or indirectly through government mandates for so-called renewable fuels. And if anything should be subsidized or mandated, it shouldn’t be growing fuels. That would inevitably compete with food.”

Actually, the Left’s Understanding of Health Insurance Markets Really Is that Bad

The Center for American Progress’s Ben Furnas responded to my post about the political Left’s misunderstanding of health insurance markets by … showcasing the political Left’s misunderstanding of health insurance markets.

I claimed that the individual market provides insurance reliably to lots of very sick people – protection better than or equal to that provided by job-based health insurance. Furnas responds:

The main reason (not mentioned by Cannon) that some people who develop health problems can renew their health insurance without seeing higher premiums is federal regulation through the Health Insurance Portability and Accountability Act (HIPAA). States have improved on these regulations, offering more protections to sick consumers of private health insurance, but John McCain, in his push for an unregulated national market, would undermine these additional protections.

Actually, 75 percent of policies sold in the individual health insurance market provided those protections before government required them.

Furnas has more to say about the dangers of freedom and the need for more government control of people’s health care decisions, but that suffices to make the point.