Archives: 11/2012

The ITU’s Floundering Effort to Retake the Internet

If you haven’t been following the push by regulators from the International Telecommunications Union to grab control of the Internet, Larry Downes’ article on Forbes.com this morning is a good window onto events.

Government regulators have long controlled and profited from telecommunications, also using it for surveillance. With the growth of the Internet, government regulators from around the world have lost their grip on communications, and now they are working to get it back. At the World Conference on International Telecommunications (or WCIT, commonly pronounced “wicket”) meeting in Dubai early next month, ITU regulators plan to introduce a series of proposals that would recapture telecommunications for the national regulatory bodies.

But, while showing just how out of touch ITU regulators are, Downs illustrates that the game has changed. A slick PR campaign will not help the ITU roll the telecom and Internet firms that oppose their plans. The telecom and Internet firms aren’t even the most important players.

The ITU is no different than the sponsors of ACTA, SOPA, PIPA, and other attempts at regulating the Internet, its content, or its users by governments large and small. Like the media lobbyists who continue to see the successful fight to kill SOPA and PIPA as a proxy war waged solely by Google and other Internet companies, the ITU simply can’t accept the reality that Internet users have become their own best advocates. Without prodding, they readily work together to defend a common-sense faith in self-governance for engineering resources and an unshakable belief in a free marketplace of ideas, the cornerstones of the Internet’s success.

That’s a little triumphal, but not too triumphal. The Internet is not governments’ to regulate.

Of course, governments will not release their grip on communications easily. The ITU’s unsubtle and ham-handed attempt to take control of the Internet is only one instance, belying more insidious work being done in the U.S. and abroad to tax and control us through our communications infrastructure.

Continued vigilance in the face of these efforts will defeat them, vigilance being—as always—the price of liberty.

The ‘Happy Planet Index’ Ranks Venezuela, Albania, and Cuba Far Higher than the United States

Rankings can be very useful tools, assuming the methodology is reasonable and the authors use robust data. I’ve cited many of them.

But I’ve also run into some really strange rankings since starting this blog, some of which are preposterous and others of which are rather subjective.

That last one was good for my ego. My only comment is that I wish that I had real influence.

Speaking of preposterous rankings, I have something new for the list.

There’s a group that puts out something called the “Happy Planet Index,” which supposedly is a “global measure of sustainable well-being.”

But it’s really an anti-energy consumption ranking, modified by life expectancy data along with some subjective polling data about lifestyles. And it leads to some utterly absurd conclusions.

Here’s their map of the world. All you really need to know is that it’s supposedly bad to be a red country.

 

I’m perfectly willing to agree that people in Afghanistan and Angola are not part of a “happy planet,” but do they really expect people to believe that the United States is in the bottom category?

I’m not being jingoistic. Yes, I am a patriot in the right sense of the word, so I would like the United States to be at the top of most rankings.

But my job is to criticize bad public policy, so my life would be rather dull if the crowd in Washington adopted a much-needed policy of benign neglect for the economy.

My real gripe is that some of the world’s main cesspools get high rankings. The United States is 105th according to the clowns who put together the rankings, while Cuba somehow came in 12th place.

Venezuela also ranks near the top, and other jurisdictions that score at least 50 places above America include Albania, Pakistan, Palestine, Iraq, Moldova, and Tajikistan.

It’s not just that those nations all rank above the United States. They also are ahead of Sweden, Canada, Australia, Iceland, Singapore, and Hong Kong.

And I’d rather live in any of those nations than live in any of the ones I listed that got good scores according to the poorly named Happy Planet Index.

Heck, I’d also prefer to live in some of the nations that score even lower than the United States, such as Belgium, Denmark, Estonia, or Luxembourg.

The Luxembourg ranking is particularly absurd. It is down near the bottom, with a ranking of 138 and trailing such garden spots as Burkina Faso and the Congo.

But it also happens to be one of the world’s richest nations according to World Bank data, in part because it is a very good tax haven.

But the nuts who put together the Crazy Planet Index give Luxembourg the second-to-worst ranking for its “ecological footprint,” and I guess you’re supposed to be unhappy if you have enough wealth to use a lot of energy.

Gee, too bad Luxembourg couldn’t be more like the nations that get the highest rankings for their “ecological footprint.” The people of Afghanistan and Haiti must be very, very happy about that high honor.

State Protectionism Isn’t ‘Rational’

A large part of what is wrong with modern jurisprudence – the Obamacare ruling is Exhibit A – is that judges refuse to judge, instead bending over backwards to defer to legislative bodies. One egregious aspect of this egregious trend is to uphold economic regulations whenever there is some conceivable “rational basis” for their enactment, even if the measures clearly infringe liberties that that the Constitution was meant to protect, such as the right to earn an honest living,  Hettinga v. United States is such a case.

Hein and Ellen Hettinga are dairy farmers (“producers” under the law at issue) as well as processors and distributors of milk (“handlers”) doing business in Arizona and California.  Under a federal pricing and pooling arrangement spawned by milk market regulations put in during the New Deal, handlers must pay into a settlement fund designed to redistribute money to milk “producers.”

Two of the Hettingas’ dairy operations fell within exemptions from that arrangement until Congress enacted the Milk Regulatory Equity Act in 2005.  The MREA revoked such exemptions for “large producer-handlers,” who were targeted for enjoying a significant competitive sales advantage over non-exempt handlers and for decreasing the values redistributed to producers under the pricing scheme.

The Hettingas challenged the constitutionality of the MREA, arguing that it constituted a bill of attainder and violated the Equal Protection and Due Process Clauses.  The federal district court dismissed their complaint and the U.S. Court of Appeals for the D.C. Circuit affirmed that dismissal without requiring the government to demonstrate even a plausible justification for the revocation.  Effectively, the courts transmogrified “rational basis review”—the last vestige of substantive scrutiny of economic regulations—into a mere pleading formality, obligating courts to dismiss any legal challenges if the government simply asserts that the regulation has a “rational relationship to a legitimate government interest.”

Cato has now filed an amicus brief urging the Supreme Court to take this case and establish clear guidance for the application of rational basis review.  We argue that, properly applied, rational basis review preserves the judiciary’s role as guarantor of constitutional government and individual rights.

Protectionist regulations, which often masquerade as public-interest measures, benefit the powerful at the expense of politically weak and disfavored groups, like the Hettingas.  Although substantive review of economic regulations has ebbed following the infamous Footnote Four from the 1938 case of Carolene Products, the Court has never adopted a rule of absolute deference to the political branches.

Yet absolute deference is precisely what happens when rational basis review is transformed into a mere pleading burden.  The Framers recognized that an independent judiciary was necessary to prevent factions from usurping the political process and “disregarding the rights of another or the good of the whole.”

The Court should grant review and disavow such a dangerous abdication of the judiciary’s necessary role.

Optimism and Skepticism on Trade Policy in Obama’s Second Term

Over at Foreign Policy, trade experts Phil Levy are Dan Drezner have been debating the prospects for trade and investment initiatives during Obama’s second term. Levy is skeptical that much will be accomplished. Drezner is more optimistic, and he makes some bold predictions:

I’m willing to bet that at least two out of the following four things will happen during Obama’s second term:

1)  A Trans-Pacific Partnership that is ratified by Congress;

2)  Bilateral investment treaties with India and China;

3) A transatlantic integration agreement;

4)  A new services deal within the auspices of the WTO.

I get nervous about making predictions. I’ve been wrong many times before! But I think I’m closer to Levy on these issues. I have serious doubts that any of the items Drezner mentions will be achieved in the next four years. To get specific (and risk being wrong again), I would rate the chances of seeing completed China/India investment treaties or a US-EU FTA at close to zero; a ratified TPP at around 10%; and a WTO services agreement at around 25%.

But just to be clear, I don’t blame the Obama administration for this. I think that if Romney had been elected, the same things would have been pursued, with about the same results.

Why am I so pessimistic? One big reason is this. In recent years, the trade and investment agreements noted above have become much less about free trade and investment. The U.S. is pushing a lot of issues that are not about free trade at all (e.g., intellectual property protection). As a result, there is a great deal of opposition to these agreements from people who do not instinctively oppose free trade. Protectionists and certain interest groups have always opposed free trade, of course, but adding in a whole new set of opponents has made things more difficult. The current trade negotiating template can support agreements with small countries, which often fly under the radar, but can’t make much progress beyond that.

Having offered that gloomy view of things, let me just note that I’m happy to be proved wrong about the prospects for free trade in the near future!

Topics:

The GOP and the Anti-Tax Pledge

Today POLITICO Arena asks:

Should the GOP break their anti-tax pledge?

My response:

Republicans should break their anti-tax pledge only if they enjoy being irrelevant. America doesn’t need two tax-and-spend parties. One is one too many.

The post-election drumbeat we’re hearing on many fronts – some of it well-placed, as with immigration and gay rights – is aimed transparently at turning elected Republicans into tepid Democrats – as in the 1970s when congressional Republicans were known as the “permanent minority.” That began to change when the party rediscovered its roots in limited government. The no-new-tax pledge distilled that change, but it’s been undermined over the years by the propensity of too many Republicans to ignore the spending side of the equation, including defense spending.

Republicans delude themselves – and ignore history – if they think that raising taxes will lead to spending cuts. The so-called sequester’s “cuts” aren’t really cuts at all: they’re reductions in the growth of spending. As my colleague Dan Mitchell has written, ”if the sequester takes place, total federal spending will climb by $2 trillion over the next 10 years instead of $2.1 trillion.”

In this lame-duck session, Republicans should stand their ground, vote to extend the Bush tax cuts for another year, and wait for the next Congress to try to make the fundamental changes in our tax system that are so sorely needed. Above all, they’ve got to expose the zero-sum mindset that informs the Democrats’ economic vision. Yes, deficits and debt – federal, state, and local – are undermining our future. But only an expanding economy will solve those problems. More taxes will worsen them, driving us into the abyss Europeans currently enjoy.

Carbon Tax Follies

Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

There seems to be a noticeable murmur around town about a carbon tax—a tax on the amount of carbon dioxide that is released upon generating a unit of energy. Since fossil fuels—coal, oil, natural gas—are both the source of over 75% of our energy production and emitters of carbon dioxide when producing that energy, a carbon tax insures that the price of everything goes up.

There is one and only one justification for a carbon tax—an attempt to influence the future course of the earth’s climate (or, as some people prefer, to mitigate anthropogenic climate change) by trying to force down the emissions of the most abundant human-generated greenhouse gas.

But of all the things that a carbon tax will do (raise prices, increase bureaucracy, elect Tea Partiers, etc), mitigating anthropogenic climate change in any meaningful manner is not one of them.

The annual carbon dioxide emissions from the U.S., currently about 5,500 million metric tons per year, only contributes roughly 0.003°C/per year of warming pressure on global temperatures (see here for a handy way of making that calculation). So the best that a carbon tax could ever hope to achieve, climatically, would be to prevent this amount of warming each year by completely eliminating all carbon dioxide emissions from the U.S.

If we went to zero emissions tomorrow,  the carbon tax would prevent about 0.26°C of global temperature rise by the year 2100. According to the latest projections from the Intergovernmental Panel on Climate Change (IPCC), the projected temperature rise by the end of the century ranges from about 1.1 to 6.4°C, with a business-as-usual rise of around 3°C (put me down for 1.6° until then, unless nature is being a blatant liar).  The “mitigated” rise is proportional to the expected temperature rise. A carbon tax enacted today that is immediately and completely successful at eliminating all U.S. CO2 emission would lower rise in temperature expected by the end of the century around 10%.  This amount is small, of little consequence, and in fact will be difficult to detect.

It is also not going to happen.  We only have the capacity to produce about 30% of our electricity from non-carbon emitting fuel sources (primarily nuclear and hydroelectric). So it will take time, and probably a lot of time (many decades) before our energy needs could possibly be met without emitting CO2 into the atmosphere.  And of course, as time ticks by before eliminating or at least appreciably reducing  our emissions, the amount of global warming saved by such action declines (and become less and less consequential), as does the justification for the carbon tax.

I am just in the early stage of this analysis, so the numbers above are a bit rough (but conservative). In the future I hope to produce a menu of emissions reductions/climate savings options—but one without prices.  That way the policymakers will see what they are going to be getting for whatever price they decide to assign. So too will the general public. And what they will all see is that whatever level of carbon tax they decide upon,  they will get a lot of climate nothing  for a lot of financial something.

The best thing would be for policymakers to just leave well enough alone, for on their own, carbon dioxide emissions in the U.S. have been declining for more than a decade (and in fact are pushing levels of the early 1990s, http://www.eia.gov/environment/emissions/carbon/). And even if such a reduction doesn’t result in any scientifically detectable climate impacts, at least it hasn’t cost us anything.

Spending Has Been Cut to the Bone

I’m always hearing that spending has been cut to the bone; we need to raise taxes, because there’s just no more fat in the budget, federal, state, or local. Here are a few stories I read last night that might just lead you to a different conclusion.

In the Washington Post

A federal program that pumped a record $3 billion into failing schools has shown mixed early results, with more than one-third of the targeted schools doing worse after receiving funding, according to initial government results released Monday.

In Washington City Paper

There were just two shoppers at the Yes! Organic Market in Fairlawn last Friday afternoon….

Owner Gary Cha plans to close Yes!’s struggling Fairlawn location in early December, ending the two-plus-year run of his only store east of the Anacostia River, despite a $900,000 grant from the city.

And two pages later

When confronted with evidence of what one city contracting official later described as “admittedly fraudulent” behavior between two private construction companies, the District government and private employees working on its behalf ignored the problem, then eventually quietly offered to broker a settlement between the feuding companies that would have cost taxpayers $250,000.

That’s what more than 500 emails LL obtained through the Freedom of Information Act show. The records also indicate that the commission tasked with enforcing the city’s local business development program punted on a chance to investigate the alleged fraud involving a joint venture that managed more than $50 million worth of construction at the newly renovated Anacostia Senior High School.