August 15, 2013 9:42AM

Exiting the Obama Administration’s Bloody Mess in Egypt

Secretary of State John Kerry originally refused to characterize the coup in Egypt as a coup. Rather, he effectively endorsed the new military regime: “In effect, they were restoring democracy.”

Too bad the hundreds shot dead on Cairo streets won’t be able to vote in the new restored democracy. Washington needs to “reset” relations with Egypt.

As I wrote here, here, and here, there never was any doubt that the Egyptian military had staged a coup, and that it was essential for Washington to distance itself from the coming disaster. President Mohamed Morsi was no friend of liberty, but the army had no excuse for destroying democracy. Morsi did not control the military, police, or courts: he wasn't much of a dictator-to-be! 

The bloody crackdown in Egypt has clarified events.  The military staged a coup.  The civilian regime created by Gen. Abdul-Fattah al-Sisi was a façade. The secular liberals who hoped to ride into power atop army tanks sold their nation’s future for a mess of pottage. The military’s attempt to destroy the Muslim Brotherhood guarantees a violent future, likely including terrorism and perhaps ending in civil war. Despite having dumped $75 billion worth of “aid” into Cairo’s coffers over the years, Washington has no “leverage.”

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August 14, 2013 4:01PM

Current Wisdom: Even More Low Climate Sensitivity Estimates

The Current Wisdom is a series of monthly articles in which Patrick J. Michaels, director of the Center for the Study of Science, reviews interesting items on global warming in the scientific literature that may not have received the media attention that they deserved, or have been misinterpreted in the popular press.

Our periodic compilations of low equilibrium climate sensitivity (ECS) estimates have become a big hit.

In our on-going effort to keep up with the science, today we update our previous summary with two additional recently published lower-than-IPCC climate sensitivity estimates—one made by Troy Masters and another by Alexander Otto and colleagues (including several co-authors not typically associated with global warming in moderation, or “lukewarming”).  There is also a third paper currently in the peer-review process.

The new additions yield a total of at least 16 experiments published in the peer-reviewed scientific literature beginning in 2011 that have found that the most likely value of the ECS to be well below the (previously?) “mainstream” estimate from the U.N.’s Intergovernmental Panel on Climate Change (IPCC). Since the negative impacts from global warming/climate change scale with the magnitude of the temperature rise, lower projections of future warming should lead to lower projections of future damages. We say “should” because one way around this, as the federal government has figured out, is to ignore all the new science indicating less expected future warming when calculating future damages, and inexplicably doubling the damages estimated to be caused by a given increment of carbon dioxide (a.k.a., social cost of carbon).

Here is a quick summary of the two new papers:

Examining the output of climate models run under increases in human emissions of greenhouse gas and aerosols, Troy Masters noted a robust relationship between the modeled rate of heat uptake in the global oceans and the modeled climate sensitivity. With this relationship in hand, he then turned to the observations to determine what the observed rate of oceanic heat uptake has been during the past 50 years or so. From the observed behavior, he was able to determine the climate sensitivity, and found it to be substantially less than that in the vast majority of the climate models. He found that the most likely value of the ECS from the observations was 1.98°C with a 90 percent range extending from 1.2°C to 5.15°C. He notes that the high end is driven by uncertainties in the oceanic heat uptake data earlier in the record.

Otto and colleagues used a simple energy budget model to relate observed global temperature changes to changes in the radiation climatology and the heat uptake in the earth system as humans have heaped various substances into the atmosphere. They conclude that the at best estimate for ECS is 2.0°C with a 90 percent range from 1.2°C to 3.9°C.

Both studies come with a long list of caveats relating to data quality, etc., that are common to all studies trying to estimate the ECS.

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August 14, 2013 3:26PM

President Obama Thinks Spying Revelations Are “Noise”

In a report on the latest of President Obama’s attempts to circumvent Congress and govern by decree — this time by getting the Federal Communications Commission to raise “fees” on cellphone users by billions of dollars to expand federal subsidies for high‐​speed Internet access in local schools — the Washington Post also lets us know what the president thinks of revelations that the National Security Agency is scooping up all our emails and Internet traffic. We found out only later, though the president presumably knew back on June 6, that contrary to what we were told at the time, government officials also read some of the email. 

And what does the president think of these revelations that set off the “debate” he’s so supportive of? He thinks they’re “noise” getting in the way of announcements of programs that are, though of dubious constitutionality, “real and meaningful”:

On the same day of Obama’s visit [to a school to announce his ConnectEd program], news reports were dominated by details of a wide‐​ranging National Security Agency surveillance program that has since become one of the major controversies of the president’s second term.

As Air Force One flew toward North Carolina that day, Obama lamented to his education secretary that one of the administration’s biggest ideas was going to be overtaken by other news.

“I remember him sort of saying, ‘It’s a shame that there’s going to be a focus on the noise rather than something that’s real and meaningful,’ ” [Arne] Duncan said.

August 14, 2013 3:22PM

Thomas Jefferson’s Sequester

As federal policymakers gear up to battle over federal spending and the budget sequester this Fall, it is interesting to consider past efforts at restraint. President Calvin Coolidge, for example, held the federal budget down to about $3 billion seven years in a row, while cutting taxes and bringing the federal debt down from $22 billion to $17 billion.

President Thomas Jefferson pursued his own rough sequester, and substantially reduced the federal debt that had accumulated under the Federalists. In a 1799 letter to Elbridge Gerry, Jefferson said “I am for a government rigorously frugal and simple, applying all the possible savings of the public revenue to the discharge of the national debt.” Jefferson more or less followed through over his two terms. He kept total federal spending at about $9 to $10 billion, although his downsizing efforts were thrown off by various contingencies.

Figure 1 shows the basic story. Federal spending rose substantially under Presidents George Washington and John Adams, but then flattened under Jefferson between 1801 and 1809. Federal debt fell from $83 million in 1801 to $57 million in 1809. The drop in debt was impressive, especially considering that the government swallowed $13 million of added debt during that period from the Louisiana purchase. The success of Jefferson — and his Treasury Secretary Albert Gallatin — in reducing debt stemmed not from cuts to overall spending, but from simply ensuring that revenue increases from a growing economy went toward paying down the debt rather than expanding the government.


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August 14, 2013 2:08PM

Foreign‐​Owned Airlines Should Fly U.S. Routes

Blogger Matt Yglesias proposes that in order to promote competition in the airline industry, foreign‐​owned airlines should be allowed to fly domestic routes here in the United States:

Let foreign airlines fly domestic routes in the United States.

This is one of those ideas that’s so commonsensical, people tend not to realize it isn’t permitted. But if you’re wondering why it is that, say, Emirates will fly you from Los Angeles to Dubai or from Dubai to New York but not from California to the East Coast, that’s the reason. It’s illegal.

To bolster competition, you need to let foreign airlines actually operate domestic routes.

In theory this might be accomplished through the ongoing negotiations for a Transatlantic Trade and Investment Partnership. The main promise of TTIP is to open up new frontiers in cross‐​border trade beyond the traditional transportation of manufactured goods. And while letting EasyJet or Aer Lingus fly from Seattle to San Antonio isn’t “trade” per se, the case for it is essentially the same general case for trade — American consumers will benefit if we are allowed to purchase from a wider range of options.

Let any company — regardless of where its headquarters are or who owns it — that’s capable of flying planes safely connect any two American cities, if the company thinks it can make it work.

This is a great idea, and I hope this gets done as part of the TTIP and other trade talks. I just wanted to comment on his statement that this “isn’t ‘trade’ per se.” In fact, it is trade per se. For two decades now, trade rules have covered trade in services, which can be carried out through a number of different “modes.” I don’t want to get all technical (and believe me, this gets really technical), but when a foreign entity operates a service in the market of another country, that constitutes trade and can be part of trade liberalization commitments in trade agreements.

So, including airline trade liberalization in the TTIP would not be anything novel – it would just be good policy.

August 14, 2013 10:57AM

NSA Spying in the Courts

The National Security Agency’s collection of every American’s telephone dialing information is hotly contested in the court of public opinion and in Congress. It is now seeing its first test in the courts since its existence was revealed.

The Electronic Privacy Information Center, arguing that it has no other recourse, has filed an extraordinary appeal to the Supreme Court of the order requiring Verizon to turn over telephone calling information en masse to the government. EPIC is a Verizon customer that communicates by telephone with confidential sources, government officials, and its legal counsel.

Cato senior fellow and Georgetown University law professor Randy Barnett joined me this week on a brief to the Court urging it to accept the case so it can resolve statutory and constitutional issues that have “precipitated a juridical privacy crisis.”

The brief first argues that the Foreign Intelligence Surveillance Act does not authorize a sweeping warrant for all communications data. The law requires such a warrant to show relevance to an existing investigation, which is impossible when the data is gathered in support of future, entirely speculative investigations. Not only the text of the statute, but Congress’s intent and the structure of the statute support this interpretation.

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August 14, 2013 10:01AM

More Compelling Evidence that America’s Corporate Tax System Is Pointlessly Destructive

It's probably not an exaggeration to say that the United States has the world's worst corporate tax system.

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We definitely have the highest corporate tax rate in the developed world, and we may have the highest corporate tax rate in the entire world depending on how one chooses to classify the tax regime in an obscure oil Sheikdom.

But America's bad policy goes far beyond the rate structure. We also have a very punitive policy of "worldwide taxation" that forces American firms to pay an extra layer of tax when competing for market share in other nations.

And then we have rampant double taxation of both dividends and capital gains, which discourages business investment.

Tax Attractiveness Top-Bottom 10

No wonder a couple of German economists ranked America 94 out of 100 nations when measuring the overall treatment of business income.

So if you're an American company, how do you deal with all this bad policy?

Well, one solution is to engage in a lot of clever tax planning to minimize your taxable income. Although that's probably not a successful long-term strategy because the Obama Administration is supporting a plan by European politicians to create further disadvantages for American-based companies.

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