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April 23, 2010 8:15AM

Return of the Neo‐​Malthusians

By Indur M. Goklany

This Earth Day we heard various commentators bemoan the growth in population, consumption, and carbon emissions driven by fossil fueled technologies. Once again we are told that this is unsustainable, that we are running out of resources, prices are inevitably headed up, and, worse, such consumption reduces both environmetal and human well‐​being. In this worldview, industrialization and economic development were fashioned in the Devil’s crucible, and that de‐​industrialization and de‐​development will be our saviour.


I have started a series of posts at Master Resources that compares the above Neo‐​Malthusian view of industrialization, economic growth, and technological change against empirical data on human well‐​being from the age of industrialization. The first post revisits the bet made in 1980 by Julian Simon and Paul Ehrlich on the direction of commodity prices, and examines long term trends in the prices and affordability of various commodities. Specifically, for metals, I look at trends going back to 1800, while for food I examine trends from 1900 onward. Parts II and III will compare long term trends in population, consumption, economic development, and carbon emissions against trends in human well‐​being for the world (from 1750 onward) and the United States (from 1900 onward). Finally, Part IV will provide an explanation as to why empirical data is at odds with the Neo‐​Malthusian worldview.


Part I, which examines the Simon‐​Ehrlich Bet in the context of long term trends in the prices and affordability of various commodities, is here.

April 22, 2010 4:08PM

Conrad’s Budget Proposal

Senate Budget Committee chairman Kent Conrad has released his budget plan for the next five years. The following are some thoughts on the proposal:

  • Conrad proposes total federal spending for FY2011 equal to 25 percent of GDP, which would match the current fiscal year’s post‐​war record.
  • Conrad says his proposal will cut spending as a share of the economy by 11 percent. This sounds okay until you realize that out‐​year spending would still be substantially above the norm at 22 percent of GDP.
  • Conrad says his plan will cut the deficit as a share of the economy by 70 percent. But he’s starting from a Mount Everest‐​sized deficit of $1.4 trillion this year. Besides, his projected deficits for the next five years would add another $3.9 trillion to the debt.
  • Conrad gets to his lower future deficits through tax increases. In addition to marginal tax rate increases on singles earning over $200,000 ($250,000 for couples), the alternative minimum tax would increase starting in 2012, and estate taxes in 2011. Conrad says “lawmakers will have to find revenues elsewhere in the budget” to provide AMT and estate tax relief in future years. Assuming Congress doesn’t suddenly find the gumption to offset the tax relief with spending cuts, more debt or tax increases elsewhere will be its solution.
  • Conrad includes Obama’s proposal to freeze non‐​security discretionary funding for three years. Unfortunately, this segment of spending only amounts to 13 percent of the budget. As Chris Edwards has pointed out, actual spending will be higher as previously authorized stimulus spending sloshes forward.
  • Conrad supports throwing more taxpayer money down the drain for failed federal experiments like education and Head Start.
  • Conrad’s proposal includes a $2 billion reconciliation instruction, which could be a vehicle for getting more big government with 50 Senate votes. Last year’s budget resolution also contained a $2 billion reconciliation instruction that was used to facilitate passage of the gargantuan health care bill.
  • With regard to the nation’s long‐​term fiscal woes, Conrad punts the ball to the president’s National Commission on Fiscal Responsibility and Reform. But this commission might be just a stalking horse for huge tax increases, which aren’t “responsible” and isn’t “reform.”

In sum, there’s not much difference between Conrad’s proposal and the President’s. Both would continue the massive spending, deficits, and debt that are bankrupting the country.

April 22, 2010 4:05PM

Was There a Libertarian Golden Age?

Recently I wrote an article arguing that there never was a golden age of liberty and that in particular libertarians should not hail 19th-century America as a small-government paradise, at least not without grappling with the massive problem of slavery. Jacob Hornberger, author of an article that I criticized, responded in Reason, and I then responded here. Meanwhile, an interesting discussion took place on a email list of libertarian scholars, and I'm pleased to have gotten the permission of several participants to include some of that discussion here:

Read the rest of this post »
April 22, 2010 3:36PM

Angel Investors

The Wall Street Journal has an important editorial today on how the financial “reform” bill being considered by Congress could help kill the angel investment industry in the United States.


Burying angels under new regulations would be part of a one‐​two knock‐​out blow for this group of more than 300,000 higher‐​income Americans who invest directly into start‐​up companies. The Obama administration’s tax‐​increase policies would be the other blow, as I testified to the Senate earlier this year


Angels have played a crucial role in America’s dynamic job‐​creating economy over the decades. Policymakers would be absolutely crackers to screw up such a successful part of our innovation economy.

April 22, 2010 3:11PM

Oil Import Make Believe

A conversation with documentarian Robert Stone regarding Earth Day is featured today in The New York Times’s “Dot Earth” online column. In the course of his conversation with the Times’s Andrew Revkin, Mr. Stone — who is quite alarmed about our reliance on foreign oil — asks: “How many Americans know that we send about $800 billion to the Middle East every year for oil?”


Hopefully, not many. According to the U.S. Department of Commerce, the U.S. spent $95.4 billion on crude oil imports from OPEC sources in 2009. But not all OPEC members are from the Middle East. That $95.4 billion includes dollars spent on oil originating from Algeria ($6.3 billion), Angola ($9 billion), Ecuador ($3.4 billion), Nigeria ($17.7 billion), and Venezuela ($23.4 billion) — none of which are in the Middle East. Subtract out that oil and we arrive at $35.6 billion spent on Middle Eastern crude oil (a figure rounded from the original nominal counts. I have used the customs value — that is, the estimated value — of the oil being imported rather than the figures that include additional costs for insurance and transportation because money being spent on insurance and shipping goes to third parties that are not for the most part located in the Middle East. But if one wants to use those slightly higher figures, it won’t change the numbers very much at all).


For what it’s worth, the total amount of dollars Americans sent abroad for crude oil from all sources was $188.5 billion last year.


Even if the figure were $800 billion, so what? No one is forcing refineries to buy crude oil from foreign suppliers. They presumably believe that the oil at issue is more valuable than the money that must be offered to secure said oil and that oil from other sources is more expensive than oil from the Middle East. Hence, they buy. This is by definition a wealth creating transaction for American business enterprises. Foreign trade, Mr. Stone, is a good thing.


The implicit claim, of course, is that there are negative externalities associated with foreign oil consumption. This, however, is faith masquerading as fact (an argument also well made by Cato adjunct scholar Richard Gordon).


Regardless, Mr. Stone overstates the alleged problem by orders of magnitude.

April 22, 2010 2:02PM

An Actual Example of “Cyberwarfare”

The good thing about this review of the book “Cyber War” by Richard Clarke and Robert Knake is that it actually mentions attacks on computing and communications during warfare.

Messrs. Clarke and Knake are convinced that an Israeli air strike in 2007 against a secret North Korean‐​designed nuclear facility being constructed in the Syrian desert was a textbook case of cyber‐​aided warfare. Israeli computers “owned” Syria’s elaborate air defenses, the authors say, “ensuring that the enemy could not even raise its defenses.”

That might actually be “cyberwarfare.”


The rest of the review, and presumably the book, is threat exaggeration and distortion, wrongly characterizing the wide variety of security issues pertaining to computers, communications, and data as having to do with “war.”

April 22, 2010 1:46PM

“Papers, Please” in Arizona

The Arizona legislature recently sent Senate Bill 1070 to the governor.


According to this summary from the Arizona legislature, the bill would require Arizona officials and agencies to determine the immigration status of any person with whom they have “lawful contact” where reasonable suspicion exists regarding the immigration status of the person. Any person arrested in Arizona would also have to have their immigration status established and verified with the federal government before they were released.


The documents that can be used to prove legal immigration status under the bill include a valid Arizona driver license, a valid Arizona nonoperating identification license, a valid tribal enrollment card or other tribal identification, or a valid federal‑, state‐ or local‐​government‐​issued identification, if the issuing entity requires proof of legal presence before issuance.


If the governor signs the bill, what creates “reasonable suspicion” about immigration status is a question that will have lawyers busy for years.


I’m interested in how well practiced Arizonans and Arizona government officials will become at checking the papers of people in their state. I have little to worry about, of course, because I’m not an illegal immigrant.


UCSB history professor Harold Marcuse maintains a fascinating web page about Martin Niemöller’s famous quotation. There are many versions of it in its long history, and there may yet be more.