January 2012

Supreme Court Considers Whether to Preempt State Bank Red Tape

by Hans Bader on November 30, 2006 · 1 comment

in Economy, Legal, Odds & Ends

On Thursday, November 29, the Supreme Court heard oral argument in Watters v. Wachovia Bank, which will decide whether federal law preempts state regulators from compelling many national bank subsidiaries to register with them.

CEI filed an amicus brief with the Court on behalf of economists and legal scholars in support of the bank, pointing out that state lending regulations and red tape can increase the cost, and reduce the availability, of credit to borrowers.

The State of Michigan sought to compel a subsidiary of Wachovia, a national bank, to register with it (Wachovia’s subsidiary, Wachovia Mortgage, is chartered by the State of North Carolina).

95% of Americans in Favor of Increasing Other People’s Charitable Giving

by Richard Morrison on November 30, 2006

in Economy, Politics as Usual

Quick quiz: what political types are more likely to donate to charity – lefty liberals or crochety conservatives? The Chronicle of Philanthropy has an interesting article on the answer:

At the outset of his research, [economist Arthur] Brooks had assumed that those who favor a large role for government would be most likely to give to charity. But in fact, the opposite is true.

Several times throughout the book, Mr. Brooks quotes Mr. Nader, the political activist, who said during his 2000 presidential campaign: “A society that has more justice is a society that needs less charity.”

Mr. Brooks calls it a “bitter irony” that those favoring income redistribution are not doing much redistributing from their own bank accounts — and he blames liberal leaders like Mr. Nader for letting liberals off the hook.

“In essence, for many Americans, political opinions are a substitute for personal checks,” Mr. Brooks writes.

Seems like a rational choice, after all. Why spend your own money when you can support policies and elect politicians who will spend everyone else’s instead?

For Best Results, Drink Like a Sardinian

by Richard Morrison on November 30, 2006

in Healthcare, Precaution & Risk

There’s more scientific evidence that moderate consumption of red wine is good for you:

New research from the William Harvey Research Institute and the University of Glasgow shows that red wines from areas of greater longevity in southwest France and Sardinia have higher levels of procyanidins – a type of flavonoid polyphenol with potent protective effects on blood vessels.

A number of population studies have revealed that moderate drinkers of red wine have less heart disease than non-drinkers. As a result it has become widely accepted that a glass or two of red wine per day is good for your heart.

The Q & A with one of the researchers also updates our understanding of a previous development in the wine-is-good-for-you literature:

Q: How much procyanidins would you have to consume to feel the benefits?

A: It is difficult to say as further work is required in clinical trials but the best evidence comes from clinical trials of grape seed extract, which have shown that 200 – 300 mg per day will lower blood pressure. Two small glasses (125 ml glass) of a procyanidin-rich red wine, such as a Madiran wine from southwest France, would provide this amount.

Note on Resveratrol
Resveratrol is often put forward as a key component of red wine, both in terms of reducing heart disease and increasing longevity (see: Kaeberlein & Rabinovitch Medicine: grapes versus gluttony. Nature 2006 Nov 16; 444: 280-1). But the levels of this polyphenol are so low (typically 1 — 2 mg/litre) that to consume sufficient daily amounts of resveratrol it would be necessary to drink around 1000 litres of wine per day.

And while perhaps entertaining at first, attempting to consume that much wine would assumably have other negative health effects. One man seems to have tried long ago, actually, and look what happened to him. Background on our booze-related policy work (health, labeling, marketing) can be found here.

The Global Warming Case–the cataclysm question

by Sam Kazman on November 30, 2006

in Coalitions & Outreach, Environment, Legal

One comment from yesterday’s Supreme Court hearing that’s getting a lot of press is Justice Scalia’s question to the attorney for the petitioning states about the imminence of harm to the states: “I mean, when is the predicted cataclysm?”

The attorney answered: “The harm does not suddenly spring up in the year 2100; it plays out continuously over time.”

I suspect that this exchange will be portrayed, by some, as illustrating the gap between the scientifically uneducated and the scientifically erudite. After all, Justice Scalia himself later noted that he’s “not a scientist”, whereas counsel for the petitioning states was probably quite familiar with the underlying science.

But later in the argument that attorney said: “… our harm is imminent in the sense that lighting a fuse on a bomb is imminent harm ….”

That sounds pretty cataclysmic to me. If you’re delving into whether such a bomb exists, let alone whether its fuse has been lit, asking about when it will go off is a pretty important question.

Global Warming Hearings & Hurricanes

by Sam Kazman on November 30, 2006

in Coalitions & Outreach, Environment, Legal, Odds & Ends

Yesterday the Supreme Court heard argument in the global warming case. Today is the last day of the 2006 hurricane season, the quietest in the a decade. Personally, I hope the Supreme Court’s ruling in the case ends up being as disappointing to global warming alarmists as this year’s hurricane season has been.

Of course, one quiet hurricane season doesn’t disprove the alarmist forecasts. On the other hand, Katrina didn’t support those apocalyptic forecasts either, but you didn’t see much in the way of forecasting restraint on the part of alarmists last year.

I’d like to correct a few points that were garbled when I first phoned them in soon after yesterday’s court hearing. The post below states that EPA was hammered by some justices “talking about issues that weren’t relevant.” What I meant to say was that the hammering involved justices questing the agency about its reliance on issues that were arguably outside the statutory scheme of the Clean Air Act and therefore irrelevant.

Secondly, my “prediction” wasn’t anything as lofty as a that; it was a guess, and it wasn’t a very well-founded guess at that. I wasn’t able to get in to see the hearing, and instead only heard it over the speakers in the lawyers’ lounge. That meant that I usually couldn’t tell how many justices were involved in a line of questioning, and I couldn’t observe any body language whatsoever. So I missed a lot!

Those clever Malthusians

by Iain Murray on November 29, 2006

in Economy, Environment, Politics as Usual

There’s an op/ed in the New York Times today that essentially claims that Malthus was right and that Julian Simon just got lucky when he made his famous bet with Paul Ehrlich and his doomsinging colleagues. John Whitehead of the Environmental Economics blog has a perceptive comment:

Increases in energy prices, with the energy return on investment (EROI — a new term for me that showed up in the comments section on this blog) falling from 25 to 1 to 15 to 1 over the past 20 years in the oil industry (EROI is 4 to 1 for the Alberta oil sands) used as evidence that the current runup in oil prices is not a blip. The increase in energy prices is combined with technological pessimism about people’s ability to find alternative sources of energy. I need to do some homework on the EROI but long term trends in market prices are still a fine indicator of resource scarcity. My feel is that the EROI was developed by those who don’t trust markets to provide appropriate price signals.

I’ll bet he’s right. John also notes that the op/ed enthusiastically proclaims the Stern Review’s analysis of the cost of global warming as being up to 20 percent of global GDP and remarks:

As we know here, Stern says that the costs might range from 5% to 20% with the 20% number arising from using equity weights to somehow account for the maldistribution of climate change impacts around the world.

My neo-Malthusian rule of thumb has always been to discount any argument that doesn’t trust markets to provide appropriate price signals (except in the case of negative externalities and public goods) and says that technology can no longer keep up (the technological pessimists have always been wrong — why should we expect them to be right this time). My newest rule of thumb is to discount (at a rate higher than 0.1%), like a big baby, any argument that solely uses the Stern Review’s 20%-of-GDP cost of climate change.

Those are two pretty good rules of thumb…

Supreme Court grills Massachusetts, EPA in global warming case

by Christine Hall on November 29, 2006

in Environment, Legal

CEI General Counsel Sam Kazman is on-site for two important cases being argued at the U.S. Supreme Court today. He phoned in his quick take on the EPA case:

The first, Commonwealth of Massachusetts v. U.S. Environmental Protection Agency, is a lawsuit brought by a group of state attorneys general, trying to force the EPA to regulate CO2 as a pollutant. The AGs aim to have CO2 emissions reduced and thus impede global warming.

Massachusetts went first. They got a lot of questions on standing from the justices: the states must show specific harm to themselves (from CO2 emissions) and that the harm would be redressed by the relief sought by the states. I don’t think Massachusetts did all too well under questioning. They were getting hammered with questions. An old case called SCRAP (United States v. SCRAP (1973)) is used by courts to establish standing in environment cases. One judge called that case “the far margin” of their standing cases. It’s possible the court will use the current case to re-address standing in environment cases and possibly cut back on it (if they rule against Massachusetts). The state was also questioned on why the EPA should not be able to prioritize issues and decide to address other matters before dealing with risks associated with CO2 emissions. There were also some questioning concerning the scientific uncertainty surrounding global warming.

When EPA got up, the agency had the same science questions thrown at them as well. One justice asked whether some scientists have engaged in selective citing of only certain portions of global warming reports. The EPA attorney referred to the amicus brief filed by CEI on behalf of a group of scientists with expertise in climate sciences. The brief disputes claims of global warming catastrophe made by Massachusetts and the other states involved in the case.

EPA got hammered quite a bit, as some justices spent time talking about issues that weren’t relevant. EPA argued that Congress never gave it authority to regulate CO2, and, even if it had, it would not be appropriate for the EPA to exercise that authority now. The justices queried the EPA on its shift in position since the Clinton administration, but agencies are probably within their right to change their mind.

I would predict that the EPA will win on the basis of Massachusetts not having standing. Moreover, even if EPA were to act on regulating CO2, the result would only be a minor reduction in emissions over the coming years. After all, it would take years to manufacture and sell new cars that have reduced CO2 emissions.

Usual suspects make the list — environmentalists of all time

by Fran Smith on November 29, 2006

in Environment, Odds & Ends, Precaution & Risk

Dr. C.S. Prakash alerted me to yesterday’s list in The Guardian of the top environmental campaigners of all time. Not surprisingly, Rachel Carson tops the list, and one of her chief achievements was the eventual banning of DDT. Readers might be interested in John Berlau’s DDT article today, which puts that “achievement” in a human context.

Here’s the list of the top twenty. One who really accomplished something that helped save the earth — the people on it — was number 19, Joseph Bazelgette, who realized that “foul water” not foul air was responsible for the cholera epidemics. He devised the London sewer system, advised others on sewers, and saved countless people from dying of cholera.

Some politicians made the list. Most notable in the U.S. are Al Gore, Number 9, and Arnold Schwarzenegger, Number 29. ‘Nuff said.

1 Rachel Carson, Author of Silent Spring

2 EF Schumacher, Green economist, author of Small is Beautiful

3 Jonathan Porritt, Government adviser, Green party, FoE

4 David Attenborough, TV naturalist

5 James Lovelock, Biologist, Gaia theorist

6 Wangari Maathai, Conservationist, Africa’s “tree woman”

8 William Morris, Craftsman and writer

9 Al Gore, US politician

10 Gro Harlem Brundtland, Former Norwegian PM, sustainable development

11 Richard Sandbrook, Campaigner

13 Vandana Shiva, Campaigner, India

14 Ansel Adams, Wilderness photographer

15 Fritjof Capra, Austrian physicist (now in CA), Eastern mysticism

16 Aldo Leopold, US ecologist

18 David Bellamy, TV botanist

19 Joseph Bazalgette, Victorian engineer, architect of London’s sewer system

20 John James Audubon, US naturalist and artist

What’s needed — and not — in trade agreements

by Fran Smith on November 28, 2006

in Odds & Ends

Today, both the U.S. Treasury Secretary and the U.S. Trade Representative vowed that the Bush Administration would push hard on global and regional trade agreements and reach out to the Democratic Congress. In separate speeches today, Secretary Henry Paulson (in London) and USTR Susan Schwab (in Washington, DC) said that the U.S. is committed to completing the World Trade Organization’s Doha Development Round.

In separate articles yesterday, journalists Morton Kondracke and the team of Cokie and Steven Roberts both strongly supported the need for more open trade as being in America’s national interest. Somewhat surprisingly the Roberts’ did a better job in showing the benefits of free trade for people, while noting:

“Even though free trade creates far more winners than losers, the losers tend to be louder and more visible. It’s easy to put a picture on TV of a shuttered factory or an unemployed worker. It’s much harder to show a family who earns more from expanding exports, or pays less because of inexpensive imports.

As a result, political demagogues, most of them Democrats, have exploited the anxieties that are inevitable in a rapidly changing economy.”

Kondracke, on the other hand, did a little bit of China-bashing — “an aggressive effort to fight trade cheating by China and other rivals” was needed, he said, as well as “a change of policy on including labor and environmental standards in future trade agreements.”

Kondracke and other journalists should check out the extensive labor and environmental mandates that already govern free trade agreements and are included in FTAs as a result of those mandates. See some reasons why those linkages aren’t a good idea.

Breast-Related Assurances from the First Lady of Illinois

by Richard Morrison on November 28, 2006

in Healthcare, Nanny State, Odds & Ends, Politics as Usual

Some Illinois political observers are raising their eyebrows about a stack of greeting cards that Gov. Rod Blagojevich’s office sent out before the election congratulating new parents on their bundles of joy (and reminding them to get their kids immunized). The implication here being that Blagojevich wanted to spend a little government money to get his name in front of potential voters just before the election. I kind of doubt that, but in any case, focusing on that ignores the much more amusing angle, which is that many of the cards were delivered over a year late:

“I thought it was laughable,” said 29-year-old Andrew Fitzgibbon of Lincoln. “Here my daughter is turning 1 and I get something congratulating me on her birth.”

But the mailings aren’t just feel-good fluff – they contain some very important advice as well:

The cards contain a list of recommended vaccinations as well as a record for parents to track when their children receive them. There is also a growth chart and a note from first lady Patti Blagojevich reminding mothers that state law allows them to breast-feed in public places.

Breast-feeding advice from the governor’s wife? The term Nanny State gets more literal everyday.

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