Archives: 01/2013

Open Data: Good, Not Yet Great

The White House is close to issuing a new policy requiring agencies to release data in open, machine-readable formats. That’s good.

Great would be the White House itself publishing machine-readable, open data when it issues the president’s budget in February. Along with the plan for fiscal year 2014 spending, why couldn’t we get the code that distinctly identifies each agency, bureau, program, and project—in essence, the organization of the U.S. federal government?

I find it continually amazing that there is still no machine-readable government organization chart. It’s the trellis on which endless forms of computer-aided oversight (internal and external) could grow.

Opening federal data to public uses is good, but the data that reflects government deliberations, management, and results is what really matters for transparency. I shared my thinking on all this in my recent Cato Policy Analysis, “Grading the Government’s Data Publication Practices.”

Iran’s Lying Inflation Statistics

Today, the Central Bank of Iran released its inflation statistics for 2012.  Remarkably, despite all of the international notoriety surrounding Iran’s outbreak of hyperinflation in October, the Central Bank claims that Iran experienced an annual inflation rate of only 27.4%.

The Central Bank has a habit of failing to release useful economic data, and what it does release often has what I would describe as an “Alice-in-Wonderland” quality. Indeed, the Central Bank’s official annual inflation rate is grossly off from the true rate. Using a well-established methodology, I estimate that Iran experienced an annual inflation rate of 110% during 2012.

Ever since hyperinflation briefly reared its head, back in October, the Iranian government has tried to prop up its faltering currency and stop its economy’s death spiral through force and deception.  In a sense, these oppressive tactics seem to have “worked,” as Iran’s inflation rate has fallen somewhat since it peaked in October 2012.  That said, Iran’s true annual inflation rate (110%) – which I calculated using objective, market-based data – is a whopping four times higher than the official reported rate.

The use of lying statistics is not a first for a country with hyperinflation. Indeed, when inflation begins to spiral out of controlsuch as the most recent cases in Zimbabwe and North Korea – it’s all too common for governments to wrap their statistics in a shroud of secrecy.

Now, this shroud of secrecy has cast its shadow over Tehran. Once again, lying statistics remain the order of the day.

Climate Impact of the Keystone XL Pipeline: Some Further Thoughts

On Tuesday, I posted an analysis of the climate impacts from the burning the oil that would be transported through the Keystone XL pipeline (if the pipeline were to be approved).

I concluded that on an annual basis, the burning of the ~800,000 barrels of oil that would flow through the pipeline each day would produce about 0.0001°C of global warming per year (one ten-thousandths of a degree Celsius)—a value of little climatological significance.

But on further reflection, I think this number is too high.

Data on U.S. oil consumption from the Energy Information Administration (EIA) shows that our consumption peaked in 2005 at a rate of nearly 21 million barrels per day (bpd) and has declined since. In 2011 (the last year of available data) the value was just under 19 million bpd. The EIA projects a continued slight decline of U.S. petroleum consumption for decades into the future.

This means that oil flowing through the Keystone XL pipeline will not amount to additional oil use, but rather will displace more expensive (economically and/or socially) foreign oil imports. Thus, all else being equal, the Keystone XL pipeline would lead to no additional global warming beyond that which would have taken place anyway from our domestic oil consumption.

But all else is not quite equal because the extraction and refining process of the Alberta tar sands oil (that the Keystone XL pipeline will deliver) is more energy intensive than oil from the Middle East, or Mexico, or Venezuela. By most accounts, this extra effort increases the lifecycle (well-to-wheel) CO2 emissions of Alberta tar sands oil by about 15 to 20 percent.

What this means is that instead of assuming CO2 emissions from an additional 800,000 new barrels of oil each day, I really should consider only the extra 15-20% of emissions that the 800,000 bpd of tar sands oil produces over the oil that we currently import. When I do this, instead of 0.0001°C of added warming each year, I get that the Keystone XL oil will produce only about 0.00001°C of warming each year (give or take a couple hundred thousandths of a °C).

I think we can all agree that 0.00001°C of warming is effectively the same as zero warming.

No matter how you look at it, there is no climate impact of the Keystone XL pipeline.

Whether or not other transportation routes out of the Alberta tar sands open in the future to meet the growing global (outside of the U.S.) demand for oil should not be a matter of consideration when assessing the climate impact of the Keystone XL pipeline.

ACLU Attacks Educational Freedom in the “Live Free or Die” State

Earlier today, the American Civil Liberties Union filed suit against New Hampshire’s School Choice Scholarship Act of 2012, which offers tax credits worth 85% of corporate donations to registered, non-profit scholarship organizations that fund low- and middle-income students attending non-public or home schools. The ACLU argues that since parents can use the scholarships at religious schools, the law violates two provisions of New Hampshire’s constitution: the historically anti-Catholic “Blaine Amendment” and the “compelled support” clause. Fortunately, similar scholarship tax credit (STC) laws have withstood every legal challenge thus far, including in states with very similar constitutional provisions.

The Blaine Amendment reads: “no money raised by taxation shall ever be granted or applied for the use of the schools or institutions of any religious sect or denomination.” What complicates matters for opponents of the program is that, unlike voucher programs, STC programs do not rely on “public money” or “money raised by taxation”. In a decision upholding the constitutionality of Arizona’s STC program, the Arizona state supreme court forcefully rejected the “public money” argument:

According to Black’s Law Dictionary, “public money” is “[r]evenue received from federal, state, and local governments from taxes, fees, fines, etc.” Black’s Law Dictionary 1005 (6th ed.1990). As respondents note, however, no money ever enters the state’s control as a result of this tax credit. Nothing is deposited in the state treasury or other accounts under the management or possession of governmental agencies or public officials. Thus, under any common understanding of the words, we are not here dealing with “public money.”

(N.B. – While the ruling of one state supreme court is not binding on another, state courts often consider how their peers have ruled concerning constitutional provisions with similar language.)

REAL ID—A Quarter of a Billion Dollars Gone

In an effort to show progress with implementation of our national ID law, the Department of Homeland Security issued a press release just ahead of Christmas reporting that thirteen states had “met the standards of the REAL ID Act of 2005.” Their compliance is not actually compliance, though. Read on…

Next Tuesday, another ‘deadline’ for REAL ID compliance arrives. Due to widespread public opposition, the majority of states and their people are not complying with the national ID mandate. Many states “have not provided sufficient information, at this time,” the DHS release says. I think that’s bureaucratese for: “They’re ignoring REAL ID.” But it doesn’t matter. The states ignoring REAL ID have been granted deferments. I’ve been looking for the Federal Register notice making this deadline extension official so I can put it next to the deadline extension from March 9, 2007, and the one from January 29, 2008, and the one from December 28, 2009, and the one from March 7, 2011.

The states that have tripped over themselves to follow this federal mandate should feel slightly burned. They’re no better off than the states that did nothing. And states need never comply.

We all know by know that the federal government will never use the lever that REAL ID gave them to “force” compliance on the states. The law says that the federal government can refuse IDs from states that aren’t in compliance. Basically, that means TSA would send most American travelers to secondary search. But that means that the federal government—not the states—would be blamed for travel nightmares (even worse than we already experience) all over the country. Deadline extension after deadline extension after deferment make clear that the federal government is not going to hold up air travelers because of REAL ID.

Now, the states that DHS says are complying aren’t really complying. You see, DHS long ago retreated from the requirements of REAL ID and established a set of “material compliance benchmarks.” These are 18 steps that bring one closer to REAL ID compliance, but they are not REAL ID compliance. And many of them are things that states were doing anyway. So, to the extent DHS is trumpeting progress, it’s a rooster taking credit for the sunrise.

Nonetheless, REAL ID ‘progress’ is the stitching together of a system to track and control us through our nationally uniform identity cards. It’s the system that will be used to control our access to work, to housing, to medical care and medicine, to guns, to credit and financial services, and much more. Big government, thy administrative tool is national ID.

The DHS release is a little more muted about the $263 million dollars it has spent or distributed on REAL ID so far—a quarter of a billion dollars toward a national ID system nobody wants. The continued spending is probably what keeps a small coterie of DMV bureaucrats and allied groups pushing for a national ID.

These national ID advocates will be well-represented at a Heritage Foundation event on REAL ID January 28th. Heritage is bringing in a Department of Motor Vehicle bureaucrat from Connecticut, a representative of a small national ID advocacy group, and the co-author of a recent Government Accountability Office update on REAL ID. I’ll hope to learn—as I’ve never been able to do before—how the national ID program would increase our security more than it would cost us in dollars and privacy—a quarter billion dollars, so far, and still counting.

Trade with China: An Opportunity, Not Something to Fear

For years now, there has been hand-wringing about trade with China.  Critics argue that China manipulates its currency, treats its workers terribly, and sells us toxic products, among other things.  Proposed responses involve a wide range of barriers to Chinese imports.

But let’s take that last one, dangerous Chinese products.  It turns out that this provides a good opportunity to sell products to China.  The New York Times reports:

A number of recent high-profile scandals involving tainted food products in China have shaken public confidence in the safety of domestic supplies. …

Concerns about the safety of domestic supplies have led to a sharp rise in demand for imported [baby] formula among urban middle-class households, sending prices of foreign brands soaring in Chinese supermarkets. According to the United States Department of Agriculture, the retail price of a 28-ounce package of imported formula is 290 to 350 renminbi, or $46 to $56 — about 50 percent higher than most domestic brands.

Hoping to stem the loss of market share to foreign competitors — and perhaps to reap the higher margins on foreign milk — some Chinese producers are investing in plants overseas. One of China’s leading makers of baby formula, Synutra International, announced plans in September to invest about $130 million in a new milk-drying plant in the western French region of Brittany that will be operated by Sodiaal, a French dairy cooperative.

It’s clear that the Chinese market offers a great opportunity for U.S. exports.  Chinese consumer tastes are becoming more like Western consumer tastes.  If Western producers are smart, they will take advantage of this.  And if they do, we might hear a bit less about China as an economic competitor, and more about how positive mutual trade relations benefit all of us.

Obama Floats a Zero Option in Afghanistan

As President Hamid Karzai visits Washington this week, a flood of recent news reports suggest that the White House is considering a zero option that would leave no U.S. troop presence in Afghanistan after 2014. Such news is bittersweet.

It appears that top officials have come to realize that America can protect its vital interests without an indefinite residual troop presence. That said, these officials implicitly acknowledge that conflating the fight against terror groups with the creation of viable central governments has failed. America can and should destroy, incapacitate, and punish those that do it harm; but the American military and civilian establishments have had repeated difficulty repairing failed states emerging from civil conflict.

After 10 years and counting, the fragile Afghan government still lacks a central pillar of nation-state sovereignty: monopoly on the legitimate use of force. Reports suggest that outgoing Secretary of Defense Leon Panetta favors leaving 9,000 U.S. troops behind to combat militants and to train the 350,000-large Afghan Army and police. But according to Washington’s own metric, indigenous security forces, which the U.S. has spent $39 billion to train and equip, have to be effective enough to operate independent of foreign assistance. But reports have found that some coalition forces largely see the Afghan National Army (ANA) as unmotivated, highly dependent, and making little to no progress.

Leaving trainers also assumes that Afghan government forces are effective in gaining the Afghan population’s support. But a Pentagon report from last year found little evidence of that. Afghan government corruption remains rampant and continues to bolster insurgent messaging. Sadly, more resources are unlikely to change the fact that the coalition has no overarching or coherent geopolitical framework to connect military gains with a broader political process that would resolve what drives the insurgency. Absent that, rural Afghans in insular pockets of the country will continue to turn to the Taliban alternative.

A plan to end America’s limited presence is a debate we must have. Committing manpower with no decisive end attaches no conditionality on the performance of either Afghan elites or security forces while leaving U.S. troops exposed to insurgent attack. The lesson to draw from the Afghan mission is not to plunge into a country and dwell for ten years, but to avoid similar futile missions in the future. 

In today’s Cato Daily Podcast, I discuss the future of Afghanistan and why it is time once again to rethink our mission: