January 2016

January 29, 2016 3:44PM

The GOP Candidates and Military Spending

Quite a number of media fact-checkers tripped over Ted Cruz's claim in last night's debate that Barack Obama had “dramatically degraded our military,” and Marco Rubio's related pledge to rebuild a U.S. military that is "being diminished."

The Dallas Morning News noted that "amounts spent on weapons modernization are about the same as they were when Republican George W. Bush was president." Meanwhile, to the extent that the military's budget "is being squeezed," they wrote, it is because of "the insistence of lawmakers in both parties that money be spent on bases and equipment that the Pentagon says it doesn’t need."

Politico's Bryan Bender (accessible to Politico Pro subscribers), concluded that while Cruz's "facts may hold up to scrutiny...they are nonetheless misleading." Bender pointed out that "Military technology has advanced significantly in the last quarter century and combat aircraft and warships are much more precise and pack a more powerful punch." Politifact agreed, rating Cruz's claim "Mostly False."

Ultimately, alas, whether the U.S. military has been severely degraded is a judgment call. Relative to what? And when? And what does that mean for U.S. security?

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January 29, 2016 3:07PM

A Reprieve For Online Freedom? DoJ Gets Cold Feet On ADA‐​For‐​The‐​Web

Did our message finally get through? (See "How ADA-for-the-Web Regulations Menace Online Freedom," 2013). Or that of other commentators like Eric Goldman, who warned (of a related court case) that "all hell will break loose" if the law defines websites as public accommodations and makes them adopt "accessibility"? At any rate, the U.S. Department of Justice, after years of declaring that it was getting ready any day now to label your website and most others you encounter every day as out of compliance with the ADA, has suddenly turned around and done this:

In an astonishing move, the Department of Justice (DOJ) announced that it will not issue any regulations for public accommodations websites until fiscal year 2018 — eight years after it started the rulemaking process with an Advanced Notice of Proposed Rulemaking (ANPRM).

Yes, eight years is a very long time for a rulemaking, especially one pursuing issues that have been in play for many years (that link discusses testimony I gave in 2000). And predictably, some disabled interest-group advocates are already charging that the latest delay is “outrageous” and shows “indifference.” More likely, it shows that even an administration that has launched many audacious and super-costly initiatives in regulation has figured out that this one is so audacious and super-costly that it should be -- well, not dropped, but left as a problem for a successor administration.

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January 29, 2016 2:55PM

Iowa Moonshine: The Sordid History of Ethanol Mandates

In recent years, politicians set impossibly high mandates for the amounts of ethanol motorists must buy in 2022 while also setting impossibly high standards for the fuel economy of cars sold in 2025.  To accomplish these conflicting goals, motorists are now given tax credits to drive heavily-subsidized electric cars, even as they will supposedly be required to buy more and more ethanol-laced fuel each year.  

Why have such blatantly contradictory laws received so little criticism, if not outrage? Probably because ethanol mandates and electric car subsidies are lucrative sources of federal grants, loans, subsidies and tax credits for “alternative fuels” and electric cars.  Those on the receiving end lobby hard to keep the gravy train rolling while those paying the bills lack the same motivation to become informed, or to organize and lobby. 

With farmers, ethanol producers and oil companies all sharing the bounty, using subsidies and mandates to pour ever-increasing amounts of ethanol into motorists’ gas tanks has been a win-win deal for politicians and the interest groups that support them and a lose-lose deal for consumers and taxpayers.

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January 28, 2016 4:58PM

Four Centuries of Spring Temperatures in Nepal

In the past two decades, much scientific research has been conducted to examine the uniqueness (or non-uniqueness) of Earth’s current climate in an effort to discern whether or not rising atmospheric CO2 concentrations are having any measurable impact. Recent work by Thapa et al. (2015) adds to the growing list of such studies with respect to temperature.


According to this team of Nepalese and Indian researchers, the number of meteorological stations in Nepal are few (particularly in the mountain regions) and sparsely distributed across the country, making it “difficult to estimate the rate and geographic extent of recent warming” and to place it within a broader historical context. Thus, in an attempt to address this significant data void, Thapa et al. set out “to further extend the existing climate records of the region.”


The fruits of their labors are shown in the figure below, which presents a nearly four‐​century‐​long (AD 1640–2012) reconstruction of spring (Mar‐​May) temperatures based on tree‐​ring width chronologies acquired in the far‐​western Nepalese Himalaya. This temperature reconstruction identifies several periods of warming and cooling relative to its long‐​term mean (1897–2012). Of particular interest are the red and blue lines shown on the figure, which demark the peak warmth experienced during the past century and the temperature anomaly expressing the current warmth, respectively. As indicated by the red line, the warmest interval of the 20th century is not unique, having been eclipsed four times previous (see the shaded red circles) in the 373‐​year record — once in the 17th century, twice in the 18th century and once in the nineteenth century. Furthermore, the blue line reveals that current temperatures are uncharacteristically cold. Only two times in the past century have temperatures been colder than they are now!


Figure 1. Reconstructed spring (March-May) temperature anomalies of the far western Nepal Himalaya, filtered using a smoothing spline with a 50 % frequency cut off of 10 years. The red line indicates the peak temperature anomaly of the past century, the blue line indicates the current temperature anomaly, the shaded red circles indicate periods in which temperatures were warmer than the peak warmth of the past century, and the shaded blue circles indicate periods during the past century that were colder than present. Adapted from Thapa et al. (2015).

Figure 1. Reconstructed spring (March‐​May) temperature anomalies of the far western Nepal Himalaya, filtered using a smoothing spline with a 50 % frequency cut off of 10 years. The red line indicates the peak temperature anomaly of the past century, the blue line indicates the current temperature anomaly, the shaded red circles indicate periods in which temperatures were warmer than the peak warmth of the past century, and the shaded blue circles indicate periods during the past century that were colder than present. Adapted from Thapa et al. (2015).

In light of the above facts, it is clear there is nothing unusual, unnatural or unprecedented about modern spring temperatures in the Nepalese Himalaya. If rising concentrations of atmospheric CO2 are having any impact at all, that impact is certainly not manifest in this record.


 


Reference


Thapa, U.K., Shah, S.K., Gaire, N.P. and Bhuju, D.R. 2015. Spring temperatures in the far‐​western Nepal Himalaya since AD 1640 reconstructed from Picea smithiana tree‐​ring widths. Climate Dynamics 45: 2069–2081.


 

January 28, 2016 4:57PM

Cuba Attacks Religious Believers Even As It Liberalizes Economic Rules

The Obama administration has been easing restrictions on travel, exports, and export financing. Commerce Secretary Penny Pritzker spoke of “building a more open and mutually beneficial relationship.”

However, the administration expressed concern over Havana’s dismal human rights practices. Despite the warm reception given Pope Francis last fall, the Castro regime has been on the attack against Cubans of faith.

In a new report the group Christian Solidarity Worldwide warned of “an unprecedented crackdown on churches across the denominational spectrum,” which has “fueled a spike in reported violations of freedom of religion or belief.” There were 220 specific violations of religious liberties in 2014, but 2300 last year, many of which “involved entire churches or, in the cases of arrests, dozens of victims.”

Even in the best of times the Castros have never been friends of faith in anything other than themselves. The State Department’s 2014 report on religious liberty noted that “the government harassed outspoken religious leaders and their followers, including reports of beating, threats, detentions, and restrictions on travel. Religious leaders reported the government tightened controls on financial resources.”

Last year the U.S. Commission on International Religious Freedom was similarly critical. The Commission explained: “Serious religious freedom violations continue in Cuba, despite improvements for government-approved religious groups.” Never mind the papal visit, “the government continues to detain and harass religious leaders and laity, interfere in religious groups’ internal affairs, and prevent democracy and human rights activists from participating in religious activities.”

Now CSW has issued its own report. Last year’s increase in persecution “was largely due to the government declaring 2000 Assemblies of God (AoG) churches illegal, ordering the closure or demolition of 100 AoG churches in three provinces, and expropriating the properties of a number of other denominations, including the Methodist and Baptist Conventions.”

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January 28, 2016 11:19AM

Financial Transaction Tax Would Be Damaging

An editorial in today’s New York Times calls for a financial transactions tax – a tenths of a percent charge on the market value of every trade of a stock, bond, or derivative. My Working Papers column two years ago described the pitfalls of such a tax. While tax rates in the range of tenths of a percent sound small they would have large effects on stock values. Bid‐​ask spreads are now 1 cent for large cap stocks. A 0.10 percent tax would add 5 cents to the spread for a $50 stock.


The alleged purpose of such a tax is to reduce the arms race among High Frequency Traders who exploit differences in the timing of bids and offers across exchanges at the level of thousandths of a second to engage in price arbitrage. In the Fall 2015 issue I review a paper that demonstrates that this arms race is the result of stock exchanges’ use of “continuous‐​limit‐​order‐​book” design (that is, orders are taken continuously and placed when the asset reaches the order’s stipulated price). The authors use actual trading data to show that the prices of two securities that track the S&P 500 are perfectly correlated at the level of hour and minute, but at the 10 and 1 millisecond level, the correlation breaks down to provide for mechanical arbitrage opportunities even in a perfectly symmetrical information environment. In a “frequent batch” auction design (where trades are executed, by auction, at stipulated times that can be as little as a fraction of a second apart), the advantage of incremental speed improvements disappears. In order to end the arbitrage “arms race,” the authors propose that exchanges switch to batch auctions conducted every tenth of a second. No need for a tax. 

January 28, 2016 10:51AM

Approaching Peak Transit

"Billions spent, but fewer people are using public transportation," declares the Los Angeles Times. The headline might have been more accurate if it read, "Billions spent, so therefore fewer are using public transit," as the billions were spent on the wrong things.

The L.A. Times article focuses on Los Angeles' Metropolitan Transportation Authority (Metro), though the same story could be written for many other cities. In Los Angeles, ridership peaked in 1985, fell to 1995, then grew again, and now is falling again. Unmentioned in the story, 1985 is just before Los Angeles transit shifted emphasis from providing low-cost bus service to building expensive rail lines, while 1995 is just before an NAACP lawsuit led to a court order to restore bus service lost since 1985 for ten years.

The situation is actually worse than the numbers shown in the article, which are "unlinked trips." If you take a bus, then transfer to another bus or train, you've taken two unlinked trips. Before building rail, more people could get to their destinations in one bus trip; after building rail, many bus lines were rerouted to funnel people to the rail lines. According to California transit expert Tom Rubin, survey data indicate that there were an average of 1.66 unlinked trips per trip in 1985, while today the average is closer to 2.20. That means today's unlinked trip numbers must be reduced by nearly 25 percent to fairly compare them with 1985 numbers.

Transit ridership is very sensitive to transit vehicle revenue miles. Metro's predecessor, the Southern California Rapid Transit District, ran buses for 92.6 million revenue miles in 1985. By 1995, to help pay for rail cost overruns, this had fallen to 78.9 million. Thanks to the court order in the NAACP case, this climbed back up to 92.9 million in 2006. But after the court order lapsed, it declined to 75.7 million in 2014. The riders gained on the multi-billion-dollar rail lines don't come close to making up for this loss in bus service.

The transit agency offers all kinds of excuses for its problems. Just wait until it finishes a "complete buildout" of the rail system, says general manager Phil Washington, a process (the Times observes) that could take decades. In other words, don't criticize us until we have spent many more billions of your dollars. Besides, agency officials say wistfully, just wait until traffic congestion worsens, gas prices rise, everyone is living in transit-oriented developments, and transit vehicles are hauled by sparkly unicorns.

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