Archives for April, 2008
Fed Cuts Interest Rates, Triggering More Inflationary Pressures
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The Fed has cut interest rates again, reducing its key rate to 2 percent — a real interest rate of less than zero, after taking into account inflation. It will be about as ineffective (in stimulating the economy) as pushing on a string. But it will trigger renewed inflationary pressures. International investors are already disgusted with the Fed’s inflationary attempts to bail out borrowers by chopping interest rates, and this will make them even more reluctant to invest in the U.S.
The Children’s Crusade
Steven Dubner asks whether children are responsible for the recent explosion of environmental concern.
He’s got a point. As well as the decidedly non-secular holiday of Earth Day, which appears to be celebrated at every public school in the US, my daughter’s Brownie troop was assigned a project recently to learn about a foreign country. As well as learning about famous people, landmarks and so on, they had to tell the other Brownies “how they are green.” Hmmmm.
Yet this example of pester power at work would also help explain one phenomenon that is infuriating to the environmental movement. Consistently, Americans have said they are concerned about global warming, but when asked to rank it among urgent issues that action must be taken on, they rank it next to or right at the bottom. For instance, a Pew Research Center for the People and the Press poll in January found it ranked right at the bottom, tied with “making the Bush tax cuts permanent.” Even a minority of Democrat supporters called it a “top priority.” I suspect this is compatible with an agenda in the household set by people who don’t have to make the hard decisions.
What will be interesting is how this translates as these children leave school and start having to square living a “sustainable” life with working for a living and having to satisfy other needs. Perhaps they will put a higher value on the environment than their parents (and if prosperity continues to increase, I think this is going to happen in any event), but if times get hard as a direct result of environmental policy, then the choices made will be very interesting.
Cross-posted from The Really Inconvenient Blog.
Law Limiting Gun Suits Upheld
The Second Circuit Court of Appeals has upheld the federal law (PLCAA) limiting lawsuits against gun manufacturers over acts committed by criminals with guns, overturning a ruling by radical judge Jack Weinstein gutting the law. (I earlier discussed how judicial case assignment procedures are manipulated so that the lion’s share of landmark cases in New York’s Eastern District mysteriously end up being decided by Judge Weinstein rather than his more moderate colleagues).
The Brady Center to Prevent Gun Violence has claimed that the law violates “separation of powers” by changing the outcome of pending court cases (an argument that, if taken to its logical conclusion, would require invalidating the 1964 Civil Rights Act because it legislatively overturned trespass convictions of civil-rights demonstrators who engaged in sit-ins). I earlier commented on the Brady Center’s hypocrisy in claiming that it is “judicial activism” for judges to strike down gun bans based on the Second Amendment, but not judicial activism for judges to strike down the democratically-enacted PLCAA based on unwritten separation-of-powers principles.
Put the Insurance before the Horse
Cordelia Ashton is an angry woman; she feels that her insurance company is treating her unfairly. She feels this way because once her insurance company found out that she’d been keeping three horses on her property, they gave her an ultimatum: get rid of the horses, or we’re dropping your policy.
For her part, Ashton said she wouldn’t be able to afford a higher insurance premium if she had to look for another provider.
“Everything is high enough as it is,” Ashton said. “It’s not fair at all. Why are they picking on me?”
The type of sentiment expressed by Cordelia illustrates how the concept of “fairness” has been lost in society these days. Is her insurance company “picking” on her by using the facts of reality to determine what to charge her (or as the case may be, that the facts make it impossible for the company to know what to charge her)? Would it be fair to let Cordelia keep paying the same rates though the company cannot know whether they are charging her enough or whether other customers will end up paying for her? Is it fair for Cordelia to ask others to subsidize a risky lifestyle she admittedly can’t afford?
She claims that the horses pose no additional risk, but this is a ludicrous assertion; one which her insurance company is clearly not willing to believe. As an owner of horses, I can say from personal experience that, even if a horse isn’t being ridden it can still do plenty of damage to anything or anyone within kicking range. From wild kicking fits to cribbing (a common activity horses engage in, consisting of biting and pulling on objects like fences and barn doors) horses are large, unpredictable liabilities.
When insurers neglect to account for certain risks, they inevitably transfer the burden of paying for such behavior from those who take the risks onto those who do not. Making non-horse owners pay the costs for those who own horses would truly be unfair.
Drill for Oil to Save the Environment
In the Washington Post, Robert Samuelson’s column “Start Drilling“ points out that ethanol production is far worse for the environment than drilling for oil in Alaska’s Arctic tundra, yet Congress promotes ethanol subsidies to reduce our reliance on foreign oil, even as it blocks drilling in the Arctic and ”the Atlantic and Pacific coasts” that would do far more to reduce our reliance on foreign oil. “What keeps these areas closed are exaggerated environmental fears, strong prejudice against oil companies and sheer stupidity,” he writes.
A news story today in the Post describes how ethanol production is devouring our food supply, even though a study shows that “greenhouse-gas emissions from corn and even cellulosic ethanol ‘exceed or match those from fossil fuels and therefore produce no greenhouse benefits.’ By encouraging an expansion of acreage, the study added, the use of U.S. cropland for ethanol could make climate conditions dramatically worse. And the runoff from increased use of fertilizers on expanded acreage would compound damage to waterways all the way to the Gulf of Mexico.”
In the American Spectator, Iain Murray notes that ethanol production has caused “food shortages and massive increases in food prices around the world. There have been food riots in Indonesia, Mexico, Egypt, and most recently, Haiti — where the poor have been reduced to eating cakes made with bleach and are on the verge of bringing the government down. Even in America, some grocery stores have begun to institute a form of rationing. Meanwhile, massive tracts of rainforest are being cleared in Indonesia to produce biodiesel, threatening the orangutan and other magnificent animals with extinction. In Brazil, the growth of sugar cultivation for ethanol is forcing food producers into the Amazon.”
By contrast, one of the Audubon Society’s chief bird sanctuaries (the Paul J. Rainey Wildlife Refuge in Louisiana), has 37 oil wells on site, and has produced natural gas for 50 years without harming the environment. Drilling for oil hasn’t harmed the birds a bit. But ethanol production causes environmental destruction, mass hunger, starvation, and rioting worldwide.
Disclosure: like many Americans, I have a retirement plan (both a 401(K) and an IRA). Like most retirement plans, it contains mutual funds. And most of those mutual funds own some stock in oil companies. So when politicians demand that the government impose a “windfall profits tax” on oil companies, what they are really trying to do is take money from my retirement plan — and your retirement plan, too, if you have one. That’s not going to encourage exploration for new sources of oil, or reduce our dependence on foreign oil.
We Told You So
If you ever thought that governmental economic planning or market manipulation is a useful tool, take a look at this article in today’s Washington Post on the impact of ethanol subsidies and mandates. It underscores the fact that governments are much better at making mistakes and serving political interests than they are at solving problems! CEI’s energy analysts warned (see here, here and here, for example) about such folly, but politicians apparently are not prone to reason.
Michigan Social Workers Seize Child Who Inadvertently Drank
Michigan CPS workers seized a 7-year-old who drank lemonade that his father purchased for him without knowing that it contained a small amount of alcohol. (As Ted Frank notes, when CPS seized the child, he had no alcohol in his system). They put him in foster care for two days and refused to release him to his aunts. Then they released him to his mother on the condition that his father, an archaeology professor, move out of the house until a full court hearing could be held. After that later hearing, the father, found not guilty of child abuse, was finally allowed to move back into his own house. If the professor “and his wife weren’t upper-middle-class academics with access to the University of Michigan Law School clinic professors, it could have been much worse. ‘Don Duquette, a U-M law professor who directs the university’s Child Advocacy Law Clinic, represented Ratte and his wife. He notes sardonically that the most remarkable thing about the couple’s case may be the relative speed with which they were reunited with Leo.’”
CPS workers have an incentive to seize children, since the federal government gives states incentives for seizing and adopting out children, and CPS workers are more likely to be fired for failing to prevent child abuse than for wrongly seizing children, even if the seizure itself causes the child devastating psychological harm.
I wrote earlier about how temporary seizures of infants based on erroneous accusations later found to be false can become permanent, when courts rule that the infant has become attached to her foster family and thus should not be returned even if the alleged abuse that led to the seizure did not actually occur. I also discussed the violation of due process involved in the mass seizures of children in the strange FLDS religious sect, hundreds of whom were seized based on a single, anonymous, allegation of abuse by a caller pretending to be a teenager in the sect, and who continue to be held without any hearing on whether they individually are endangered (although the removal of some of the children might well be warranted if it occurred after a full judicial hearing).
Ban the Smokes, Kill the Smokers
The unintended consequences of government are wonderful to behold. Impose a minimum wage and put poor, ill-educated teens out of work. Raise auto fuel-economy requirements, and kill more people in accidents as they travel in smaller cars. Ban cigarette smoking in local bars and restaurants, and cause more drunk driving accidents as smokers drive further to find more congenial locales.
The problem with this, say Scott Adams and Chad Cotti, economists at the University of Wisconsin-Milwaukee, is that smoking bans seem to have been followed by an increase in drunk-driving and in fatal accidents involving alcohol. In research published in the Journal of Public Economics, the authors find evidence that smokers are driving farther to places where smoking in bars is allowed.
The researchers analysed data from 120 American counties, 20 of which had banned smoking. They found a smoking ban increased fatal alcohol-related car accidents by 13% in a typical county containing 680,000 people. This is the equivalent of 2.5 fatal accidents (equivalent to approximately six deaths). Furthermore, drunk-driving smokers have not changed their ways over time. In areas where the ban has been in place for longer than 18 months, the increased accident rate is 19%.
The findings, say the pair, are consistent with the suggestion that smokers are driving farther to alternative places to drink. This may be because they are driving to bars with outdoor seating, or to bars which are not enforcing the smoking ban.
Another explanation is that some smokers are “jurisdiction shopping” to places where they may puff. Accident rates can be especially high where border-hopping to still-smoky bars is possible. Accidents in Delaware county in Pennsylvania increased by 26% after the next-door state of Delaware introduced a smoking ban in 2002. Similarly, when Boulder county banned smoking, fatal accidents in Jefferson county, between Boulder county and Denver, went up by 40%. How this weighs up against the long-term health effects of smoking bans is unclear. But it serves as a warning to well-meaning legislators.
Makes you wonder what government is going to do for an encore!
GMU Law School Should Sue ABA Over Racial-Quota Mandates
The American Bar Association is continually threatening to pull the accreditation of George Mason University Law School for failing to adopt illegal racial quotas in admissions. That’s what San Diego law professor (and member of the U.S. Civil Rights Commission) Gail Heriot notes in the Wall Street Journal. The ABA first forced GMU — one of the few law schools without a marked liberal bias — to use what the ABA itself refers to as “preferential affirmative action admissions program” to radically increase its minority percentage from 6.5 percent to 19 percent. But the ABA still wasn’t happy with the results, which were insufficiently extreme for the ABA’s quota-mongers (never mind that the qualified applicant pool for a law school of GMU’s caliber is lower than 19 percent minority, as is the percentage of non-white lawyers even in heavily-minority states like California, so it’s not as if having 19 percent minorities is a sign of discrimination. Indeed, the ABA conceded that GMU has long had a “very active effort to recruit minorities,” even before adopting racial preferences in admissions). So now the ABA is demanding what are in essence racial quotas.
The ABA’s actions violate 42 U.S.C. 1981 and the Supreme Court’s ruling in Gratz v. Bollinger (2003), which held in footnote 23 that racial quotas violate 42 U.S.C. 1981 (which bans both private and public discrimination) as well as the Fourteenth Amendment (which bans only governmental discrimination). Moreover, the ABA and its accreditors are liable for pressuring GMU to engage in racial discrimination under 42 U.S.C. 1981, which allows not only employers and other institutions to be held liable for racial discrimination, but also individual discriminators. And GMU and its president and law school dean, who were personally summoned to appear before the ABA in order for them to be pressured to maximize GMU’s racial quotas, have standing to sue over those quota mandates under Lutheran Church-Missouri Synod v. FCC, 141 F.3d 344 (D.C. Cir. 1998), which held that the Lutheran Church had standing to sue the FCC to keep the FCC from pressuring it to take race into account in hiring employees for its religious radio stations in order to satisfy a ”diversity” mandate. (Note that GMU is a state university).
Heritage Speech
I’ve just got back from delivering a speech at the Heritage Foundation on the subject of my book. I think it went well and the audience certainly seemed enthusiastic about it. You’ll be able to watch it here when the webcast gets properly archived within a day or so. Thanks to ever-excellent John Hilboldt and his team for putting it on and to Ben Lieberman for hosting it.
Supreme Court Upholds Voter ID Laws
The Supreme Court upheld Indiana’s voter ID law, which is tougher than many other voter ID laws, rejecting claims that it was unconstitutional or akin to a poll tax, and ruling that it was a rational way of preventing vote fraud. I earlier explained why the legal challenges to voter ID laws are based on bogus arguments. The case did not break down along ideological lines: while all the moderate and conservative justices voted to uphold the law, so did liberal Justice John Paul Stevens, who announced the court’s ruling. Law professor Jonathan Adler thinks that Stevens voted to uphold the law based on his knowledge of the rampant vote fraud in Chicago that occurred while he worked there as a lawyer and judge prior to being appointed to the Supreme Court.
Nothing Fair About the “Fair Pay Act”
The proposed “Lilly Ledbetter Fair Pay Act” would get rid of the short 180-day deadline for bringing pay discrimination claims that applies under some federal laws, like Title VII. As I point out in today’s New York Times, that’s unnecessary, since another law, the Equal Pay Act, has a longer 3-year deadline for bringing claims (and other discrimination laws like 42 USC 1981 often have even longer deadlines, like 4 years). My letter disagreeing with the New York Times’ editorial in support of the law also points out that the proposed “Fair Pay Act” would allow not just employees, but certain third parties, to sue over alleged pay discrimination, making it harder to negotiate settlements. (The EEOC can sue even if an employee chooses alternative means to settle the dispute, like arbitration. The bill would change current law to allow even some third parties other than the EEOC to sue).
In the Washington Post, David Drachsler, Vice Chair of the Virginia Council on Human Rights, debunks the Washington Post’s mistaken endorsement of the bill, noting that it would “permit an employee to file a pay discrimination lawsuit years after the pay decision was made, even if the employee was aware of that decision. Indeed, in Lilly Ledbetter’s case, her lower pay, compared with that of men doing similar work, was caused by low performance evaluations of which she was aware years before she filed her charge” of discrimination.
Effectively, the Fair Pay Act would abolish the statute of limitations, by potentially allowing an employee to sue forever as long as she receives a paycheck or pension payment that is supposedly affected by an alleged act of discrimination that occurred decades earlier. That would allow stale claims of discrimination to be brought long after the alleged discriminator has died, leaving the employer unable to defend itself through exculpatory evidence or rebuttal testimony.
I earlier discussed the bill, which has 56 supporters in the Senate, here, and the dishonest and sensationalistic way that reporters and editorial cartoonists are covering the issue here.
The Rhetorical Impact of the Global Warming Bandwagon
Cellulosic ethanol—derived from wood scraps and other forms of inedible plant mass– may or may not turn out to be a real technological breakthrough. On the one hand, it could reduce the ruinous impacts of grain-based ethanol on food prices. On the other hand, the extensive set of federal mandates and subsidies for cellulosic ethanol is not a good omen—good technologies rarely need federal help, and the existence of federal aid is often a tip-off that a new technology is a loser.
But here’s another question: if cellulosic ethanol does take off, what impact would that have on the clichés we use? Would we have to scrap the old saying about separating the wheat from the chaff, and instead talk about separating the chaff from the wheat?
Fat Discrimination Bills Lumber Forward
A Chicago Tribune story notes that a few jurisdictions now ban discrimination against fat people (generally as part of general bans on discrimination based on physical appearance), and that Massachusetts is now considering specifically banning discrimination against fat people (as some municipalities do). (The only federal law touching on the subject is the Americans with Disabilities Act, which some courts have said may cover “morbid obesity” (see Cook v. Rhode Island), but which does not cover ordinary fatness; moreover, some courts say that obesity is not a disability because it is a correctable condition, i.e., you can lose the weight if you try).
Quite apart from the fact that such legislation interferes with employers’ freedom of contract (is it really so unreasonable for a movie studio to cast a thin person rather than a fat person in certain roles, or for an airline to want a thin flight attendant who can move easily up and down the aisle and allow passengers to pass by rather than a fat flight attendant who will block the aisle?), it’s also not clear why such legislation should focus on fat people, who can often control their condition, rather than other people disadvantaged by mother nature, like short people. (I became fat in 1993, but then lost the weight by eliminating alcohol, butter, and extremely fatty foods from my diet. But short people cannot change the fact that they are short).
After all, most Americans are overweight, so it’s not as if fat people are a tiny minority. And being fat is not as disadvantageous (at least for men) as being short. For example, fat people of both sexes are more likely to get married than short men, and short people are less likely to get promotions than people of average height like me.
A women’s studies professor quoted in the article supports fat discrimination legislation as a way of destigmatizing fatness. (Some colleges now have “fat studies” programs, whose professors are often drawn from existing women’s studies programs). But even if that were truly possible, destigmatizing fatness might do more harm than good to public health. In my wife’s native France, obesity rates are lower than in the U.S., and lifespans are longer (despite all the cheese, foie gras, and red meat they eat). Part of the reason is that they simply eat less (not healthier). Why do they eat less? Partly due to the shame factor. My French-born wife’s (thin) best friend told me, with disapproval, that in France, “it is a shame to be fat.” Shame is not a pleasant emotion, but maybe it’s better to be shamed into losing weight than to be dead from obesity-related conditions, like diabetes, heart diseases, and weight-related cancers. Those obesity-related conditions are a legitimate cause for concern for the insurers and employers who end up paying for them.
Enforcing Unconstitutional University PC
One of the most tragic manifestations of past racial discrimination has been the creation of a government-enforced racial spoils system in the name of affirmative action. That has given rise to a professional class of racial profiteers, such as the late Ron Brown, who are ever ready to help whites win the financial benefit of regulations originally approved to aid minorities.
The demand on people and institutions to abandon the principle of nondiscrimination has been particularly strong in academia. Although the U.S. Supreme Court has limited the role of race in admissions, the American Bar Association is now pushing to institutionalize de facto quotas. University of San Diego law professor Gail Heriot writes about the plight of George Mason University law school, known for its more conservative political orientation:
If you have ever wondered why colleges and universities seem to march in lockstep on controversial issues like affirmative action, here is one reason: Overly politicized accrediting agencies often demand it.
Given that federal funding hinges on accreditation, schools are not in a position to argue. That is precisely why the U.S. Department of Education, which gives accreditors their authority, must sometimes take corrective action. George Mason University’s law school in northern Virginia is an example of why corrective action is needed now.
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