January 2012

Climate Alarm Declining – Gallup

by Marlo Lewis on March 11, 2010 · 1 comment

in Global Warming

Gallup’s annual update of Americans’ attitudes on things environmental found that 48% of Americans believe the seriousness of global warming is generally exaggerated, up from 41% in 2009, and 31% in 1997, when Gallup first posed the question.

Similarly, the percentage of those who believe global warming is going to affect them or their way of life in their lifetimes has dropped from 40% in 2008 to 32% today.

Among the causes for these changes in opinion, Gallup mentions, “publicity surrounding allegations of scientific fraud relating to global warming evidence.” I’d like to propose another, related factor: humor.

black-knight-climategate

Regulation of the Day 125: Salt

by Ryan Young on March 11, 2010

in Health and Illness, Healthcare, Nanny State, Personal Liberty, Regulation of the Day

Having eliminated all crime from New York’s streets, ended homelessness, rebuilt Ground Zero, and fixed the state’s ailing public schools, New York’s state legislature has set its sights on how much salt you eat.

New York City Mayor Michael Bloomberg already has a plan to reduce NYC residents’ salt intake by 25 percent over five years. But State Assemblyman Felix Ortiz (D-Brooklyn) thinks that doesn’t go nearly far enough. And it only covers New York City, for starters. The rest of the state’s salt intake would remain perilously unregulated under the Bloomberg plan.

That’s why Mr. Ortiz has introduced statewide legislation that would “make it illegal for restaurants to use salt in the preparation of food. Period.”

A $1,000 fine would accompany each violation.

Tom Colicchio, who owns a restaurant and has appeared on the television show Top Chef, is livid. He told the New York Daily News that “New York City is considered the restaurant capital of the world. If they banned salt, nobody would come here anymore… Anybody who wants to taste food with no salt, go to a hospital and taste that.”

He’s right; the salt ban does offend culinary decency. But there’s another angle that’s at least as important: personal responsibility.
If I want to pile on the salt, as Mayor Bloomberg famously does, that’s my right. But I also need to be liable for the consequences. If chronic salt over-consumption gives me high blood pressure and heart trouble, that’s my fault. I should pay the cost.

But that’s not how the current health care system works. We suffer from the 12-cent problem: on average, people only pay 12 cents for every dollar of health care they consume. Roughly 50 cents are picked up by the government, and insurers cover the rest.
That means people have less incentive to watch what they eat than under a more honest system. Why not rack up huge health care bills? Everyone else is paying for me. Health care on sale! 88 percent off!

Freedom cannot exist without responsibility. Decades of government encroachments in health care have taken away a lot of our responsibility for health care decisions. So it makes some sense that Mr. Ortiz would finish the job by taking away peoples’ freedom to eat what they want.

A better solution would be to have both freedom and responsibility, instead of neither. Ban the salt ban. Give people more control over their health care dollars. Let us be free. Let us be responsible. We’re all adults here. Treat us as such, Mr. Ortiz.

Kerry-Graham-Lieberman: The Tax Formerly Known As Cap-and-Trade

by Marlo Lewis on March 11, 2010 · 1 comment

in Global Warming

My colleague Julie Walsh flags a funny statement by Sen. Joe Lieberman (I-CT), quoted earlier this week (Mar. 9) in Greenwire (subscription required). Although Lieberman, Sen. John Kerry (D-MA), and Sen. Lindsey Graham (R-SC) want to include cap-and-trade in their draft climate and energy legislation, they are reluctant to use the term.

Greenwire reports:

Lieberman also downplayed the use of the term “cap and trade” when it comes to limiting emissions, even though that is generally the plan with their bill. “We don’t use that term anymore,” he said. “We’ll have pollution reduction targets. Remember the Artist Previously Known as Prince?”

According to earlier reports, Graham et al. may propose to combine an electric utility sector cap-and-trade program with carbon taxes on transportation fuels. If so, then Kyotoism is truly dead. Electric utilities are gung-ho for cap-and-trade only if it’s economy-wide, so they can sell the free emission permits they would get under a bill like Waxman-Markey to other sectors receiving fewer or zero freebies.

Also, Waxman-Markey is a non-starter in the Senate because millions of Americans now understand that cap-and-trade is a stealth tax on energy. Combining carbon taxes with cap-and-trade is hardly the bold alternative and fresh start Graham, Kerry, and Lieberman are promising. Indeed, if this is what’s on offer, it’s even more obviously a tax, and should be even easier to shoot down!

The Artist Formerly Known As Prince was still Prince even before he changed his name back to Prince! And an energy tax by any other name is just as foul.

Lagerfeld, Chanel – Jumping the Shark with Global Warming Fashion?

by Christine Hall on March 11, 2010

in Environment, Global Warming, Odds & Ends, Zeitgeist

Did Karl Lagerfeld jump the shark with his fall-winter 2010-11 ready-to-wear collection for Chanel?  The collection – by one of the most famous and historic design houses in the world – was described by the AP as global warming in theme, and subsequently scorned on Newsbusters.  The show featured icebergs reportedly flown in from Sweden (whoa! with the carbon footprint!) and some extreme costume elements – like an antler-and-ear headdress – that would only appeal as street-wear to a Lady Gaga or Bjork.  Ridiculous and unwearable?  Certainly.  Likely to be available for purchase in Saks Fifth Avenue?  Fear not.

The interesting aspect of Mr. Lagerfeld’s theatrical show is that the mastermind himself seems to show little concern, much less panic, over the purported danger of global warming.  Reuters reported Lagerfeld’s comments:

“‘Have you felt any warming this winter?” Lagerfeld, with trademark black sunglasses and white ponytail, told reporters after showing his autumn collection, referring to freezing cold weather outside. “Maybe that’s all nonsense, who knows.”

The online magazine Zimbio questions whether the Chanel show had anything to do with global warming in the first place.  The Cut reports that Lagerfeld was “inspired by the Ice Hotel in Sweden” – not politics or global warming, noting  that last season, he “put his Chanel models in a barn, with hay and everything, possibly even burrs.”

Personally, my great fear arising from the Chanel collection is that the furry mukluks will make it off the runway and into the real world.  Which might make me wish for  real-world global warming.

mukluks

(A bunch more photos from the Chanel show here.)

The Hayekian Approach to Health Care

by Ryan Young on March 11, 2010

in Economy, Healthcare

George Will has a good column today. He does a wonderful job contrasting Hayek’s philosophy of humility before complexity with the early 20th-century progressive mindset of planning and scientistic design. The framework applies surprisingly well to today’s health care debate, with President Obama playing the role of Woodrow Wilson. Very thought-provoking.

Human Achievement of the Day: Beam me up, Scotty?

by Michelle Minton on March 10, 2010

in Nano & Biotech, Odds & Ends, Privacy, Tech & Telecom

Today’s achievement doesn’t quite put us on the final frontier, but the successful transmission of atoms via teleportation by scientists at the University of Maryland is a quantum leap toward significant advancements in technology…maybe even human teleportation someday.

Brace yourselves; this post gets a little esoteric.

“For the first time, scientists have successfully teleported information between two separate atoms in unconnected enclosures a meter apart – a significant milestone in the global quest for practical quantum information processing.”

From what I’ve tried to learn, and I’m not pretending to understand all this, quantum physics theorizes that reality acts differently upon particles based on their size and that at the atomic and sub-atomic levels particles, such as photons, can simultaneously have properties of both energy and matter (armchair physicists: feel free to use the comment section to correct me).

Quantum information, such as the spin of a particle or the polarization of a photon, is transferred from one place to another, without traveling through any physical medium.

With the convergence of the principles of matter and energy, it makes sense that teleportation would be based on quantum mechanics…I think.

A team from the Joint Quantum Institute (JQI) at the University of Maryland and the University of Michigan has succeeded in teleporting a quantum state directly from one atom to another over a substantial distance…

Our system has the potential to form the basis for a large-scale ‘quantum repeater’ that can network quantum memories over vast distances, says group leader Christopher Monroe of the Joint Quantum Institute and the University of Maryland department of physics. Moreover, our methods can be used in conjunction with quantum bit operations to create a key component needed for quantum computation. A quantum computer could perform certain tasks, such as encryption-related calculations and searches of giant databases, considerably faster than conventional machines. The effort to devise a working model is a matter of intense interest worldwide.

I think the scientists here are being a little modest. More than just a “considerably faster” computer:

Development of a quantum computer , if practical, would mark a leap forward in computing capability far greater than that from the abacus to a modern day supercomputer , with performance gains in the billion-fold realm and beyond. The quantum computer, following the laws of quantum physics, would gain enormous processing power through the ability to be in multiple states, and to perform tasks using all possible permutations simultaneously.

aspirin

My brain hurts now. Somebody Wonka me a bottle of pain killers. Is it too late to change today’s Human Achievement of the Day to Aspirin?

FDIC Threatens Public Pensions

by Ivan Osorio on March 10, 2010

in Bailout Watch, Economy

The Federal Deposit Insurance Corporation (FDIC) is trying to get public pension funds to help prop up failed banks by buying into them, reports Bloomberg. Such a move would almost certainly run afoul of pension fund managers’ fiduciary duty, by investing in excessively risky assets. Indeed, the risks are obvious.

Oregon would invest in Community Bancorp LLC, a bank being formed by Sageview Capital LLC, according to the Oregon presentation. Sageview was founded by former Kohlberg Kravis Roberts & Co. executives Scott Stuart and Ned Gilhuly. Sageview is looking to raise about $1 billion from pension funds and similar investors, the presentation said.

While the structure makes sense, pension funds would be better off investing in existing banks, said Chris Whalen, managing director of Institutional Risk Analytics of Torrance, California. At those lenders, management will oversee details of buying failed lenders and save pension funds the time and effort needed to launch a new bank, he said.

“If they are really interested in playing this area, they should put their money into a larger bank that’s already playing here,” Whalen said. “If you look at the risk-reward and the distraction involved, it’s not worth it” to back a new bank, he said.

Investing in distressed banks doesn’t always pay off, as the U.S. Treasury Department learned with the Troubled Asset Relief Program. At least 60 lenders skipped some of their promised dividends to the TARP fund, according to SNL Financial, and a $2.33 billion stake in CIT Group Inc. was wiped out last year when the lender went bankrupt.

And who will then be on the hook when such investments go south?

FDIC guarantees may soften the risk of investing public pension money in distressed banks, Whalen said. When the FDIC sells a failed bank, it typically shares a portion of the loan losses.

This perfect storm of moral hazard and excessive risk cannot end well. Moreover, as former Labor Department official F. Vincent Vernuccio notes, some public pension funds already suffer from under-performance due to politicized investment strategies adopted by their managers.

[I]n June 2009, 41 signatories representing some of the nation’s largest public pension funds and others with approximately $1.4 trillion in assets wrote to the Securities and Exchange Commission, asking the agency “to improve disclosure of climate change-related risks, and material environmental, social and governance risks, in securities filings.” California State Treasurer Bill Lockyer, who serves on the governing boards of the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), put climate change on par with protecting retirement funds, saying, “Pension fundsprotect workers’ retirement benefits, and they need to ensure their portfolios reflect the risks and benefits related to climate change.”

Lockyer’s endorsement of using pension funds for anything other than retirement security is particularly brazen considering the huge losses that CalPERS and CalSTRS have sustained in recent years due to PTI investments. In 2000, then-California State Treasurer Philip Angelides launched his “Double Bottom Line” initiative to adopt certain social and tobacco-free investment policies—including using the pension funds in CalPERS and CalSTRS for local economic investments. The divestment of tobacco was a costly mistake. CalSTRS revealed that its tobacco investment ban lost the plan $1 billion in gains, and in 2008 conceded that they “could no longer justify” avoiding tobacco stocks.

For more on public employee pensions, see here and here.

For more on pension fund activism, see here and here.

Thursday Immigration Meeting: Will Immigration Reform Be a Boon or Bust?

by Alex Nowrasteh on March 10, 2010 · 4 comments

in Deregulate to Stimulate, Employment, Labor, Legal, Mobility, Regulation

When Senators Graham (R-SC) and Chucky “I know nothing about business” Schumer (D-NY) come to a compromise on comprehensive immigration reform, the only things that gets compromised are our freedoms and prosperity. Tomorrow will be no different when they meet with President Obama at the White House to discuss immigration reform.

Here’s what they will likely agree on:

1. A national biometric identity card. As I discussed here, a biometric ID will dissipate all of the gains from immigration reform. Eventually the ID card, like our Social Security numbers, will be a vital part of daily life. Losing it would force millions of Americans to be fired from their jobs, lose their apartments, and operate in the black market. A benefit appeals process for the Social Security Administration takes 1153 days to sort out. While that is a different issue from sorting out identification disputes, it gives you an idea of the difficulty in fixing errors in government databases.

2. Electronic employment verification for all workers. This will delay hiring, training, and cause millions of Americans real anguish when system errors reject them from employment. The current version of this, E-Verify, is a catastrophic and expensive boondoggle, failing to identify undocumented workers 54% of the time.

3. Subsidies. Everything from social programs to ESL to border crossing points will be subsidized further to cope with the “strain” of immigration.

What Chucky and the rest of these guys don’t understand is that immigration is not a charity. Immigration is massively beneficial to the economy, both nationally and globally. But Chucky, Graham, and many others think of it as a charity. Modern immigrants are, in most ways, better suited to assimilation and success in America than immigrants from generations past. Our ancestors did it without any help from the government and modern immigrants can do it too. By all means, open the border to massive legal immigration, but build a high wall around the welfare state. Extending immigration does not necessarily mean extending welfare.

Of course there is a much more beneficial immigration compromise that will eliminate illegal immigration, free up border resources to deal with real threats (terrorism, slave trade), and dramatically cut down on cross-border crime: Create legal pathways for massive immigration to the United States.

1. Massively increase the quotas for immigration or eliminate them altogether. Provide a legal pathway for the massive majority of immigrants who just want to legally enter the United States, work, and raise a law-abiding family.

2. Build a wall around the welfare state, not around our country. I’d prefer to eliminate the welfare state altogether but means testing and further limits should be imposed in the mean time. For instance, legal immigrants can’t get most Federal benefits for the first 5 years of their residency. We should increase that to 15 years with an eye on making it unavailable permanently.

3. Focus all border and immigration resources on making sure that terrorists or criminals don’t enter the U.S. Instead of doing surprise workplace raids on busboys, fruit pickers, and computer programmers, we should focus our limited security resources on real threats.

These three commonsense reforms would save the government billions of dollars a year, generate additional billions in tax revenue, be a boon to existing businesses in these tough economic times, and result in the creation of hundreds of thousands of new enterprises.

At Obama’s Thursday meeting there will be a lot of talk about what the government can do to “help” immigrants and the American worker. All of their ideas, however, will ossify labor markets, impoverish workers, and create enormous black markets. The simplest and best thing for the government to do here is to legalize the market and then leave it alone.

Obama Administration Rewards Corrupt Mortgage Giants, Punishes Productive Private Banks, Fleeces Taxpayers and Responsible Credit Cardholders

by Hans Bader on March 10, 2010 · 3 comments

in Bailout Watch, Deregulate to Stimulate, Economy, Energy, Environment, Labor, Mobility, Natural Resources, Politics as Usual, Precaution & Risk, Regulation, Sanctimony

The Obama administration wants to increase taxes on productive banks that are self-supporting, while exempting the mortgage giants and other companies that got massive taxpayer bailouts.  For more details, click on this graph, “Bank-robbing tax lets ‘bad guys’ go free,” courtesy of a Washington think-tank, the Heritage Foundation.  It shows that the mortgage giants Fannie Mae and Freddie Mac are exempt and will never have to pay a dime, despite being bailed out by taxpayers at a cost of more than $200 billion, while Bank of America and Wells Fargo, which are solvent and returned all their TARP money, would be forced to pay billions under the administration’s proposed tax.

General Motors and Chrysler won’t have to pay a dime, either, even though the government claimed they were “financial institutions” just like banks in order to use bank bailout money to bail them out at a cost of at least $70 billion (a bailout that would not even have been needed to save the companies if they had simply been reformed to make them competitive, and received relief from burdensome red tape, like poorly-drafted CAFE and global-warming regulations that may backfire.  Instead, the Obama administration effectively gave the companies, at taxpayer expense, to the UAW, a powerful union opposed to much-needed reforms).

In other news, economists and real estate experts say that a mortgage bailout program the Obama administration spent $75 billion on has backfired and harmed the real estate market.

Obama recently expanded the bailout of mortgage giants Fannie Mae and Freddie Mac and lavished money ($42 million) on their CEOs.

Under the Bush administration, federal regulators took over Fannie and Freddie in the name of stopping their risky practices. But the Obama administration has increased their purchases of risky mortgages in a vain attempt to inflate the economy. Worse, it forced them to run up to tens of billions in losses to bail out deadbeat and at-risk mortgage borrowers, and then tried to conceal those losses, in conduct reminiscent of Enron.  But their management hasn’t objected, because the costly requirements are accompanied by massive taxpayer bailouts and lavish pay for the mortgage giants’ CEOs.

Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”

Why did they buy these risky loans?  They put up with Clinton-era affordable-housing regulations that required them to buy up lots of risky loans, in order to curry favor on Capitol Hill and thus retain their annual $10 billion in tax and other special privileges (which they possessed owing to their status as “Government-Sponsored Enterprises” or GSEs). They paid their CEOs millions in the process, and engaged in massive accounting fraud — $6.3 billion at Fannie Mae alone — to increase the size of their managers’ bonuses.  As GSEs, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

At the direction of the Obama administration, Freddie Mac is now running up $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.

Under Obama’s proposed financial “reforms,” banks will be pressured to make even more risky, low-income loans. Obama has sent to Congress his proposal to create a politically correct entity called the Consumer Financial Protection Agency, tasked with enforcing the Community Reinvestment Act. Government pressure on banks to make low-income loans was a key reason for the mortgage meltdown and the financial crisis. Yet Obama’s proposals would empower the new agency to enforce the Community Reinvestment Act, which was a key contributor to the financial crisis, without regard for banks’ financial safety and soundness.

Moreover, Obama’s proposed financial rules do absolutely nothing to reform Fannie Mae and Freddie Mac, admits Treasury Secretary Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.”

Meanwhile, a new law backed by the Obama administration, the CARD Act of 2009, has effectively forced responsible credit-cardholders to subsidize irresponsible people, leading to the return of annual fees on many credit cards, and the elimination of many cash-back and rewards programs.  My wife, who has an excellent credit rating, was recently informed that one of her cards will now have an annual fee — of $60!  (She promptly canceled the card.)

Chris Horner Debates IMF Climate Fund

by Richard Morrison on March 10, 2010

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=nll-tVIlKj0 285 234]

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