January 2012

Yes, for three reasons.

(1) Companies in carbon-constrained countries will demand carbon tariffs to “level the playing field” vis-a-vis firms in non-carbon constrained countries.

(2) Cheating will be rampant unless deterred and punished by credible trade sanctions.

(3) The EU-IPCC-Al Gore goal of achieving a 50% reduction in global emissions by mid-century is impossible absent deep emission cuts in developing countries, which in turn won’t happen unless developing countries are bullied into limiting their consumption of coal and oil.

For further discussion, see my post on Masterresource.Org.

In today’s Guardian, Juliana Glover reports that carbon permit prices in Europe’s Emission Trading System (ETS) have crashed from €31 last summer to €8 today. This price is too low to create any incentive for covered entities to invest in ‘green’ technology. [click to continue…]

This week, host Cord Blomquist and co-host William Yeatman, along with guest commentator Ryan Young (Richard Morrison is off this week) take a whiff of the bank nationalizations floating through the air, and say they stink. Sen. Chris Dodd’s dodgy dealings in real estate come under scrutiny. Rep. John Murtha has a few multi-million dollar skeletons hiding in his own, heavily gilded, closet. Climate czar Carol Browner declares war on the economy. While favoring immigration in general, our hosts question the wisdom of “eco-migration.” Finally, we wish double-amputee Olympic hopeful Oscar Pistorius a speedy recovery.

Listen to Episode 31 of the LibertyWeek podcast here.

If you’ve followed my posts here at OpenMarket.org or at my personal site, you’re well aware of the fact that I have a soft place in my heart for jumping all over any attempts by government to regulate video game ratings or content.  I always emphasize that we already have a great system in place with the ESRB and that it should be up to parents to decide what is appropriate for their children. Parents should take advantage of parental controls on their kids’ gaming systems to lock out games that have content unsuitable for children.

That being said, I feel obliged to praise the story of an individual who has avoided simply taking a superficial glance at what his child is playing, and has instead taken an honest interest and engaged their child to broaden his horizons on a subject.

Such a story is that of Hugh Spencer, a friend of Boing-Boing writer Cory Doctorow.  Spencer describes a confrontation with his son’s love affair with Call of Duty.  Some of us in this very office share this love affair, so we know just where he is coming from.  Hugh was a little concerned with the first person shooter-aspect of Call of Duty, and he was a little concerned about the violence.  The game was given a T (or Teen) rating, and his son was just thirteen years old.  On the other hand, Hugh, as a museum exhibition designer, was familiar with the content and felt it was historically accurate.  And even though the shooting and explosions concerned, him he knew that was the reality of World War II.

So Hugh set down with his son.  He took the opportunity to talk to him about what was going on in the game and made an agreement with his son:

I asked Evan to google the Geneva Convention. Then he had to read it and then we had to discuss it. This we did. So the deal is that Evan has to fight according to the rules of the Geneva Convention. If his team-mates violate the Convention then play stops and Call of Duty goes away for a while.

What a fantastic example of using a video game for a teaching opportunity.  And this is likely just one of many instances of good parenting that we don’t hear enough of.  This is also evidence that the ESRB works for parents, who should take note of the ratings system and watch what their kids play. Who knows? This just might open up more learning opportunities outside of video games based on the content of the game.

Bravo, Hugh!

The ultra powerful enviro-lobby has a big problem: So far, it hasn’t been able to convince the Congress to enact energy-rationing policies to fight “global warming” (I am using quotation marks because it hasn’t warmed in 7 years, despite a steady increase in global greenhouse gas emissions).

Last year, a bi-partisan group of Senators spurned a cap-and-trade scheme written by California Senator Barbara Boxer’s staff because they couldn’t countenance imposing higher energy costs on their constituents at a time when gas cost $4/gallon. Given current economic woes, a cap-and-trade energy rationing scheme is even more unlikely to make it through the Congress.

Faced with this political and economic reality, the eviros have adopted a new strategy. They want to pull an end run around Congress by having the executive branch regulate green house gases without a legislative mandate.

It’s a complicated process, but here’s the gist: They are trying to get the Environmental Protection Agency to find that greenhouse gas emissions are “pollutants” that “endanger” public welfare, a ruling that automatically results in regulation under the Clean Air Act. This is not a good thing. As noted by my colleague Marlo Lewis, if the EPA were to regulate greenhouse gases under the Clean Air Act, it would result in a regulatory nightmare.

The EPA simply could declare that greenhouse gases endanger public welfare, but there are also a number of circuitous pathways by which the green lobby could force the EPA’s hand. In today’s DC Examiner, former CEI Warren Brooks Fellow Jeremy Lott and I have an opinion piece that explains one such round-about route to a regulatory nightmare-the California tailpipe emissions waiver.

A sample:

If the EPA allows California to regulate greenhouse gases from automobiles, it will tacitly acknowledge that greenhouse gases are “pollutants” — and under the Clean Air Act anything considered a pollutant is automatically subject to regulation. Environmental groups will be sure to have their lawyers sue the EPA to make this explicit.

Once greenhouse gases are classified as a “pollutant,” big construction projects (power plants, high schools, apartment buildings, hospitals) will be delayed and perhaps halted while federal regulators try to decide whether they comply with the Clean Air Act. New construction jobs? Forget about it.

Before the EPA takes this drastic step, shouldn’t our nation’s representatives in Congress debate and vote on whether to substitute this California regulation for federal law? Environmentalists don’t think so.

Rather than have Congress deliberate, the environmental groups want the courts to decide. The Environmental Defense Fund (EDF) and other well-funded, litigation-happy green groups think the California waiver is a dream come true.

Click here to read the rest.

The Small Business Administration’s Regulatory Review and Reform initiative (r3) has a new compilation of rules that need reform, according to small businesses across America who were asked to submit comments. The unpopular regulations come from all across the federal government’s swarm of agencies: IRS, Transportation, Labor, EPA. These are the kind of reforms that count as genuine stimulus,, and should be duplicated on a grand scale with a bipartisan “Regulatory Reduction Commission.” In any event, the small-business “Top Ten” will be selected in the Spring. During this economic crisis, Congress and the President should relentlessly be asked: “What are you doing to reduce the cost of employing workers and of investing?”

At the same time there has been so much talk of government nationalization of troubled big banks, a bill quickly snaking through Congress would allow the feds to expropriate cars, bicycles and other “vehicles and equipment” of everyone from amateur collectors of rocks to kids going on scavenger hunts.

In the Omnibus Public Land Management Act of 2009, which passed the Senate (S. 22) in January and is up for a vote in the House as early as this Wednesday, a “forfeiture” provision would let the government confiscate “all vehicles and equipment of any person” who disturbs a rock or a bone from federal land that meets the bill’s broad definition of “paleontological resource.” The seizures could take place even before a person and even if the person didn’t know they were taking or digging up a “paleontological resource.” And the bill specifically allows the “transfer of seized resources” to “federal or non-federal” institutions, giving the government and some private actors great incentive to egg on the takings.

Groups representing those from scientists to rock collectors to other fossil enthusiasts have warned of ominous consequences that could criminalize the exploration and learning about natural history ironically in the name of protecting nature. According to Tracie Bennitt, president of the Association of Applied Paleontological Sciences, the bill’s language is so vague and the penalties such as forfeiture so severe that it could allow the government to “put scientists in jail and confiscate university vans.” In a letter on the bill to members of Congress, Bennitt warns, “We can visualize now a group of students unknowingly crossing over an invisible line and ending up handcuffed and prosecuted.”

The area of concern is Subtitle D of the bill called the “Paleontological Resources Preservation Act.” The provisions in this subtitle make it illegal to “excavate, remove, damage, or otherwise alter or deface or attempt to excavate, remove, damage, or otherwise alter or deface any paleontological resources located on Federal land” without special permission from the government.

A “paleontological resource” is broadly defined in the bill as “any fossilized remains, traces, or imprints of organisms, preserved in or on the earth’s crust, that are of paleontological interest and that provide information about the history of life on earth.” Penalities for violations include up to five years in jail, and, as previously stated, all vehicles and equipment “used in connection with the violation” are subject even before trial “to civil forfeiture, or upon conviction, to criminal forfeiture.”

Among the problems, critics explain, is that the language is so broad that merely picking up rocks under this bill could be found guilty of “excavating” or “removing” a “paleontological resource.” There are numerous rocks, stones, and other objects of nature that contain fossilized imprints and, in the bill’s language, “are of paleontological interest and that provide information about the history of life on earth.” In fact, it is likely the most rocks that people pick up would meet this definition.

So people from mining companies to amateur geologists known as “rockhounds” to children gathering stones on field trips could be at risk for unintentionally violating this bill should it become law. The law does purport to allow an exception for a “resonable amount” of “casual collecting,” but then practically negates that excepion by saying that the “reasonable amount” shall be enitirely “determined by the Secretary” of Interior or Agriculture.

In an analysis of a similar bill in previous session of Congress, the policy group Partnership for America noted this scenario, “If a person were to be out hiking and picked up a rock as a souvenir, an enforcement officer who discovers this situation, at his or her discretion, could seize the equipment and the vehicle in use by the person or family at the time of the ‘offense.’” The analysis concluded, “The legislation may sound benign on its surface, yet it could have very dire unintended consequences for mining companies, rock hounds (geology enthusiasts) and average citizens who enjoy our national forests.”

One of those consequences is the civil forfeiture provision in Section 6308, which would leave those accused without their cars or other property until the trial was completed — basically the property would be guilty until proven innocent. As described by the Partnership for America analysis: “Even if a person eventually prevails in their case should they be prosecuted under this Act, their family would be without the use of the equipment and vehicle until the case is adjudicated, which could be months or even years, creating an extreme hardship in many cases. The government would likely try to obtain a guilty plea in exchange for a reduced penalty or the return of some of the personal property, which many innocent citizens would accept to avoid the cost and inconvenience of a trial.”

In fact, civil forfeiture had been so abused in drug cases — with reports of cops driving around Porsches of suspected drug offenders –that a group of conservative and liberal congressmen drafted a bill to reform the process. The late House Judiciary Committe Chairman Henry Hyde, R-Ill. and then-Rep. Bob Barr, R-Ga., joined with Rep. (and current Judiciary Committee Chairman) John Conyers, D-Mich., and Rep. Barney Frank, D-Mass., to sponsor the Asset Forfeiture Reform Act that was signed into law in 2000. The law increased the government’s burden of proof before it could engage in the pre-trial confiscation of the property of the accused.

Describing the situation before the law was passed, Hyde wrote in his Cato Institute book Forfeiting Our Property Rights, “Civil asset forfeiture has allowed police to view all of America as some giant national K-Mart, where prices are not just lower, but non-existent — a sort of law enforcement ‘pick-and-don’t-pay.”

But the pending Omnibus bill would unfortunatley take U.S. civil liberties a big step back to the situation before the 2000 reforms passed. And as Bennitt of the Association of Applied Paleontological Sciences points out in her letter, it also creates the vaguely defined crime of “submit[ting] any false record, account, or label for, or any false identification of, any paleontological resource excavated or removed from Federal land.”

But in geology, false records can be unintentional and are often unavoidable. As Bennitt notes, honest errors in labeling fossils are almost inevitable even for the top museums. She writes: “Paleontology is a field that is not set in stone. What you find and label in the field may not be what you find as preparation is undertaken in the lab.”

She adds that “penalties for misidentification of fossils will place every museum in jeopardy,” because “there is not one museum that is free from labeling errors on specimens” in some of its exhibits or collections.

Bennitt concludes that the bill would have the perverse effect of limiting scientific inquiry and knowledge of natural history. She notes that “museums and universities collecting on public land do not have the time, money or staff to collect everything they see. These specimens end up as dust as they erode away.” Amateur and professional fossil collectors have helped scientists piece together natural history, and this bill may lock thier skill out of the process.

At a time when the federal government should be busy catching and jailing the Madoffs, Stanfords, and other alleged fraudsters who swindled Americans out of billions, it seems a particular waste of time to hunt down nature enthusiasts who may have inadvertently disturbed a “palentological resource.” And it would indeed be a tragedy if a rock hunter’s bike or car were “nationalized” before the first bad bank was even laid a finger on.

The House will like be voting this week on the bill as S. 22, the exact same “Omnibus Public Land Management Act of 2009″ that passed the Senate with these provisions. Some reports have the bill being scheduled for a Wednesday vote, but it may also be Thursday or Friday. If it passed the House, it will likely go straight for signature to President Obama, so this may be the last chance to get changes to the bill.

To express your views to your Representative or Senator in Congress, you can call the Capitol switchboard at (202) 224-3121 or 225-3121. Ask the operator to connect you to the office of your member of Congress.

Gold prices are skyrocketing—recently closing at over $1,000 an ounce, the highest in almost a year—while inflation fears continue rising and the dollar weakens.  This is the news that the media is echoing, quoting several analysts.  Many are blaming President Obama’s stimulus package for amplifying investors’ fears that his spending plan will only push the country deeper into recession.

Analysts’ forecasts, nonetheless, are a mixed bag.  Some analysts are calling the gold rush a bubble that can burst, as the dot-com and housing bubbles did, while others believe it can continue upward.

“Currencies are losing value and holders of currencies are losing confidence.  Gold may break through $1,000 and not look back,” says Ron Goodis, retail trading director at Equidex Brokerage Group Inc. in Closter, New Jersey, according to Bloomberg.  Read Gold Tops $1,000, Highest Since March, as Global Equities Slide

On the other hand, Przemyslaw Radomski, editor of Sunshine Profits, warns that Precious Metals and Corresponding Stocks may Fall in a Few Days.

“Since my previous essay on market timing was posted [Feb. 11], gold gained over $100 and silver gained over $2. These levels are substantially higher than when I suggested getting back on the long side of the precious metals market.  This rally has taken gold almost $200 higher within one month, so it is natural for one to expect at least a modest pullback from here,” Radomski said.

But as everything in economics, gold prices in a free market follow the forces of supply and demand.

“In a free market, increasing demand and rising prices provide a significant incentive for producers to increase the supply of an item.  And that’s usually how it works.  But that’s not what is happening in the gold market.  Demand is certainly increasing.  According to the United States Geological Survey, the demand for gold reached 1,133 tons in 2008, an 18% increase from the previous year.  In dollar terms, this represented a 51% increase to an all-time record $31.8 billion, “writes Jon Herring in his article Peak Oil… What About Peak Gold?

Meanwhile, the global supply is limited.  The industry has only discovered one significant deposit in the last 15 years: that of Aurelian Resources—now owned by Kinross Gold Corporation (NYSE:KGC, TSX:K)—with its Fruta del Norte gold-silver discovery in the Cordillera del Condor, in Ecuador, also known as the “gold dinosaur.”  If investors deem gold to be king in this environment, then Ecuador may provide them with their T. Rex.

Skyrocketing gold prices have also ignited the stock values of the four largest gold producers at the time of today’s 4:00 p.m. close.  Newmont Mining Corporation (NYSE:NEM) gained 7.21%, Anglo Gold Ashanti Ltd. (NYSE:AU) was up 6.36%, Barrick Gold Corporation (NYSE:ABX) earned 1.23%, and Gold Fields Ltd. (NYSE:GFI), up 4.46%.

Another factor that can influence gold prices is that most new worldwide discoveries are made by junior exploration companies—those with funded through equity financing, sometimes with less than $50 million—that combined have poured $12.6 billion into global exploration activities in 2008, according to the Metals Economic Group.  42% of this investment was focused on gold discoveries.

We’ve talked a lot about the TARP or Troubled Assets Relief Program over the past several months here on OpenMarket.org.  But perhaps the entire thing can be summed up in this simple slide show.
[click to continue…]

I used to think that the groups and individuals that sat around eagerly anticipating the launch of a new Grand Theft Auto (GTA) game were the fans.  I was wrong.  I am now positive the people salivating over these releases are those that intend to create an uproar over the games content and how it ‘endangers our children.’

Most recently to the forefront is media watchdog Common Sense Media.  The group that stated that HALO 3 was less violent than other first person shooters because, “there’s something a bit less impactful about killing creatures that don’t really exist.”  Just a hint CSM, but the characters in GTA IV don’t really exist either.

CSM’s recent review of GTA IV: The Lost & the Damned—episodic downloadable content (DLC) available exclusively on Xbox Live—highlighted the newest GTA controversy: FULL FRONTAL NUDITY.  Full frontal male nudity, to be specific.  As the scene has been described by countless outlets, it involves a politician in a steam room having a meeting with associates.  At some point in the scene it is revealed to the player that he isn’t clothed.

Hide your sons and your daughters!  They may see a digitized, pixelated version of something they’ve seen a thousand times on themselves, in the boys locker room, or health class.

Once again, this is an issue of parental supervision.  If you don’t want your kid playing it, don’t allow them to play it.  The Entertainment Software Association, the predominant trade association of the video game industry, reported last year that 94% of gamers under 18 were accompanied by a parent when they purchased their video games. Additionally, and more specifically, GTA IV: The Lost & the Damned is DLC off of Xbox Live.  You can’t go and buy it in a store.  You have to download it on your Xbox 360.  To do so, a  credit card transaction has to take place to purchase credits that you can exchange for online content in the Xbox Live store.  Or you can purchase a points card in a store to redeem on the system.

The bottom line is the DLC expansion of GTA IV must be purchased on Xbox Live.  What’s the significance?  Well in the first scenario.  If you child is purchasing content on Xbox Live with an adults credit card, there should be supervision over their purchases.  Secondly, and more importantly is that games have built in coding indicating their rating to the game system.  A parent can go into the game consoles settings and tell the system that it is not allowed to play games of a certain rating.  Then when the child puts a game into their system or tries to play downloaded content of a rating they are not allowed to play, the system doesn’t allow it to be played.

When parents are involved in what their kids are playing and watching on tv, common sense just tells us, that the children are less likely to be involved in content their parents don’t want them to be witness to.  I believe this message is beginning to get out, especially when considering some of the figures the ESA released in their report.  So there is a good chance that the message of watch dog groups advising parents of game content like Common Sense Media, the ESRB, and whattheyplay.com is reaching its intended audience.

But at the same time, it seems like some groups are trying to use bigger shock value to get people to their site or talking about their work at the detriment to the software.  However, if that is the method in which we are able to keep the ratings board unregulated and maintained by an impartial committee, I don’t have that big of a problem with it.