The kerfuffle over soft toilet paper has hit a new low. The NRDC’s Allen Hershkowitz is now saying that “People just don’t understand that softness equals ecological destruction.”
I had to chuckle after reading that last sentence (it is silly, is it not?). But then I decided to take Hershkowitz seriously. Hardcore environmentalists like the NRDC are sometimes loosey-goosey with the data; science and their religion rarely get along.
Let’s see how big the impact of softer toilet paper really is. Maybe, hyperbole aside, Hershkowitz has a point. Let’s look at the data and find out.
Despite the proliferation of tree-intensive soft toilet paper, forest area in the U.S. has remained almost unchanged over the last century. Right around 33% of total land area.
Over that same time period, U.S. population more than tripled. That’s a lot more bottoms, demanding ever softer toilet paper. And yet — no net deforestation.
That doesn’t sound like ecological destruction. To use one of the New Religion’s buzzwords, that sounds… sustainable.
Deforestation is happening on a worldwide scale, according to a handy table from the Earth Policy Institute (data from the UN). They try to make it sound scary, but it isn’t. I crunched the numbers. The decline amounts to roughly 0.2% per year. Not exactly a crisis. Even that slow rate appears to be in decline.
I’m going to go ahead and say that Hershkowitz and the NRDC are promoting a baseless scare story.
There is still a tremendous upside to all this hemming and hawing. If toilet paper is all that environmental activists have to get worked up over these days, it is a sign that, environmentally speaking, we live in good times.
CEI President Fred L. Smith, Jr. dropped by CPAC today to speak on a panel about government bailouts. He also made appearances on Radio Row at CPAC.
Yikes! In the last quarter 2008, according to the Commerce Department release today, U.S. GDP growth was minus 6.2 percent – far deeper than analysts expected.
Sounds like some of the expectations for GDP in President Obama’s$3.6 trillion 2010 Budget may need to be revised if this negative growth persists. For 2009, the 2010 budget assumed a 1.2 percent growth in GDP; for 2010, 1.1 percent, before a rise to 1.5 percent in 2011.
Doesn’t sound like the time to slap 3,800,000 taxpayers – the top 2 percent – with higher taxes. Not when lots of those “individuals” are really small businesses responsible for most job growth. According to the Wall Street Journal:
Mr. Obama is of course counting on an economic recovery. And he’s also assuming along with the new liberal economic consensus that taxes don’t matter to growth or job creation. The truth, though, is that they do. Small- and medium-sized businesses are the nation’s primary employers, and lower individual tax rates have induced thousands of them to shift from filing under the corporate tax system to the individual system, often as limited liability companies or Subchapter S corporations. The Tax Foundation calculates that merely restoring the higher, Clinton-era tax rates on the top two brackets would hit 45% to 55% of small-business income, depending on how inclusively “small business” is defined. These owners will find a way to declare less taxable income.
Plus, as my colleague Iain Murray pointed out, the budget’s cap-an-trade system for carbon emissions will “tax” everybody who uses fossil fuel energy – to the tune of “$510, $660, $870, $1125, and $1635” for each income quintile, respectively.
Sounds like an anti-stimulus budget to me.
In today’s Financial Times, Gillian Tett addresses the opaqueness of determining the “price” of collateralized debt obligations backed by mortgage loans and suggests an approach to gain some sense of the value of those asset-backed securities.
She points out that several banks have been sifting through the data on recovery rates after the CDOs had been liquidated. Tett notes:
The real shocker, though, is what has happened after those defaults. JPMorgan estimates that $102bn of CDOs has already been liquidated. The average recovery rate for super-senior tranches of debt – or the stuff that was supposed to be so ultra safe that it always carried a triple A tag – has been 32 per cent for the high grade CDOs. With mezzanine CDO’s, though, recovery rates on those AAA assets have been a mere 5 per cent.
An open auction, Tett offers, might bring some clarity to the pricing process and may attract investors:
But in a world where investors already feel utterly terrified by the inability to determine values – and the recovery rate on triple A assets has tumbled to just 5 per cent – conducting an open fire sale might now be the least bad of some terrible options.
After all, if an open auction ends up pricing mortgage-linked CDOs near zero, at least the capital hit to the banks and insurance companies will be clear; and if it is higher than zero, it might even cheer investors up.
Either way, until investors get some sense of what something might – or might not – be worth, it will be painfully hard to rebuild trust in capital markets and banks alike.
Tucked into the EPA budget proposal the Obama administration revealed yesterdays are plans to reinstate the Superfund taxes which expired in 1995 as a way to partially offset the $2.7 billion in increased spending at the EPA. The administration estimates that the taxes will generate more than $1 billion per year.
The original Superfund taxes were actually three different taxes, a petroleum tax of 9.7 cents per barrel, a tax on chemical feedstocks, and a so called Corporate Environmental Income Tax of 0.12% on corporate income in excess of $2 million. Historically 39% percent of the revenue came from the petroleum tax, 18% from the chemical feedstock tax, and 43% from the Corporate Environmental Income Tax.
Environmentalists like to tout that the Superfund taxes are an example of the “polluter pays” principle. However, the reality of the superfund program is that is supposed to clean up abandoned hazardous waste sites and companies paying the petroleum and chemical feedstock taxes now may have had nothing to do with an industrial site abandoned 20 years ago. Even more egregious is the Corporate Environmental Income Tax, which actual raises the most revenue, as it implicitly assumes that any company with enough income must be a polluter, and therefore should be forced to pay.
Apparently, Mayor Newsom–one of the first lawmakers to condemn bottled water and bar government agencies from buying it–has a separate standard for himself! A partially empty case of bottled water was recently discovered in his car. Supposedly, the water belonged to his security detail. But a spokesman for the Mayor admitted: “The mayor will be the first to admit that he occasionally indulges in bottled water .. . It’s not something he’s proud of.” Good grief. If he thinks it so bad that others should be denied access, the least he could do is not indulge! It just to goes to show, bottled water is valued even by those who condemn it. I just wish they valued our freedom as much.
[youtube:http://www.youtube.com/watch?v=a8oWwGqU4XY 283 234]
“Not one dime,” said President Obama in his address to Congress, referring to how much extra tax people earning under $250,000 a year will have to pay in his budget. Unfortunately, even if you don’t have to pay extra tax, you will have to pay extra fees for your energy, which are passed on to the government via energy companies. That’s the effect of the President’s cap-and-trade scheme for carbon emissions, an important part of his new budget. Energy companies will have to pay the government for permits for each ton of carbon dioxide or equivalent they emit in the generation of power. They will pass on these costs to the consumer, as has happened everywhere a cap-and-trade scheme has been tried. The Administration will split the revenues between $15bn for alternative energy pork and about $52 billion per year to help pay for the Making Work Pay tax cut/welfare check of $800 for “95 percent of all American workers.” By raising the price of fossil fuel energy and thereby making expensive alternative energy more competitive, the program is also aimed at reducing the amount of greenhouse gases emitted.
How much will cap and trade cost households in increased energy costs? Well, we know from a CBO study last year that a 15 percent reduction in emissions from 1998 levels would cost each household at least $660. That target is about 25 percent more stringent than the budget target, which is simply a return to 1990 emission levels by 2020 (far less than environmentalists demand). So we can apply simple arithmetic to estimate that the current budget cap and trade program will cost each income quintile $510, $660, $870, $1125 and $1635 (in 2006 dollars, slightly more in nominal values) respectively. This is a significant offset to the $800 “tax cut” per worker.
To those who might object that most households have two income earners these days, that’s not true. While the “traditional” family model of a husband supporting his family only accounts for 7 percent of householders now, dual-income families actually account for just 29 percent of households. Moreover, it is the bottom three quintiles that have on average just one earner, meaning that they suffer proportionally more from this energy tax increase.
Finally, for the highest quintile, the lower income limit is just $88,000. If you earn that amount, even if you have two income earners in the household, you will likely lose money from these stealth energy taxes. So will the average household earning between $35,000 and $55,000. So much for “not one dime.”
Wayne Crews, CEI’s Vice President of Policy, has an article at RealClearMarkets today, challenging the Obama administration to look at cutting mroe costs than just items in the budget.
Regulation aren’t as visible as taxes and big items on the federal budget but their effects are just as great. Just like taxes remove money from the economy, regulations weigh down productivity, often with very little benefit to show.
Wayne’s advice on how to fix this:
- Compile a periodic “report card” on the numbers and costs of regulations in each agency
- Establish a regulatory cost freeze
- Set up a Regulatory Reduction Commission to assemble a package of regulations to cut
- Employ separate budgets for economic regulation and environmental/social regulation
Read more at RealClearMarkets.com
lolprez and the “do-something-anything” Congress is at it again
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