January 2012

Obama Policies Fuel Global Food Crisis Through Ethanol Mandates, While Fostering Obesity in America

by Hans Bader on January 22, 2011

in Agriculture, Energy, Environment, Ethanol, International

Food prices are soaring all over the world. The global food chain is reportedly stretched to the limit, fueled by the fact “that more than a third of the corn produced in the U.S is now used to make ethanol.” As a result of such “bio-fuels” subsidies, one of the world’s largest food producers predicts a “global food crisis.”

Unfortunately, the Obama administration has long pushed ethanol subsidies, even though such subsidies have a history of spawning famines and food riots overseas. For example, the costly climate-change legislation backed by the administration contained massive ethanol subsidies.

The administration is now forcing up the ethanol content of gasoline through EPA regulations, heedless of the fact that ethanol makes gasoline costlier and dirtier, increases ozone pollution, and increases the death toll from smog and air pollution. Ethanol production also results in deforestation, soil erosion, and water pollution.

Back in 2008, leading environmentalists lamented the devastating impact of ethanol subsidies on the global environment and the world’s poor. They noted that thanks to ethanol, “deadly food riots” had already “broken out in dozens of nations,” such as “Haiti and Egypt.” And they pointed out that “food-to-fuel mandates are leading to increased environmental damage. First, producing ethanol requires huge amounts of energy — most of which comes from coal. Second, the production process creates a number of hazardous byproducts, and some production facilities are reportedly dumping these in local water sources. . .Most troubling, though, is that the higher food prices caused in large part by food-to-fuel mandates create incentives for global deforestation, including in the Amazon basin. . . huge swaths of forest are being cleared for agricultural development. The result is devastating: We lose an ecological treasure and critical habitat for endangered species, as well as the world’s largest ‘carbon sink.’ . . .the net impact of the food-to-fuel push will be an increase in global carbon emissions.”

By increasing world food prices, ethanol subsidies also fostered Islamic extremism in poor countries like Afghanistan that import much of their food.

Ethanol subsidies are not the only way that the Obama administration is harming poor people. The administration is also discouraging poor Americans from purchasing cheap, nutritious food. For example, it has also disparaged the consumption of potatoes, banning white potatoes from the federal WIC program, while allowing WIC money to be spent on far less nutritious things that are starchy, fatty or sugary (such as apple sauce, which has no nutrition unless vitamin C is artificially added to it).

The potato is superior to most foods in nutrients per dollar (and per acre of farmland), so much so that “in 2008, the United Nations declared it to be the ‘Year of the Potato.’” (Thank you again to the ancients of the Andes for this marvelous little food.)

“This was done to bring attention to the fact that the potato is one of the most efficient crops for developing nations to grow, as a way of delivering a high level of nutrition to growing populations, with fewer needed resources than other traditional crops. In the summer of 2010, China approved new government policies that positioned the potato as the key crop to feed its growing population.” Potatoes provided much of the agricultural surplus that made the Industrial Revolution possible.

Potatoes are more nutritious than other starchy foods like rice and bread, and “are a good source of vitamins.” They have a lot of vitamin C (much more than a banana or an apple), and potassium levels slightly higher than potassium-rich bananas). Potatoes also have all 8 essential amino acids, unlike most other staple foods like corn and beans.

The Obama administration is also using federal funds to subsidize the opening of an International House of Pancakes in Washington, D.C., despite its sugary and fattening entrees, and the development of high-calorie foods that benefit politically connected agribusinesses.

Afternoon Links: January 21, 2011

by Nicole Ciandella on January 21, 2011

in Odds & Ends

1. This Norwegian kid scared away a pack of threatening wolves by blasting Creed on his cellphone. (Apparently even wolves can’t stand listening to Creed.)

2. What does Justice look like?

3. The Vatican is asking Italian Prime Minister Silvio Berlusconi to show a more “robust morality.”

4. Nathan Harrington is “practically homeless” and has no computer–but he beat 3 million people to be No. 1 in fantasy football this year.

5. Three of the four British spies identified as having worked undercover in the eco-activist movement allegedly had sexual relationships with their targets. (Are eco-activist women that irresistible?)

Photo Credit: soldattnytt’s Flickr Photostream

Andrew Sullivan Blames Tea Party for Budget-Busting Deal That He, Not It, Supported

by Hans Bader on January 21, 2011

in Deregulate to Stimulate, Economy, Employment, Politics as Usual, Sanctimony

The deficit is largely the result of “feel-good” bipartisan policies supported by the political establishment. But rather than taking credit for the deficit it helped to create, the liberal establishment blames it on political outsiders like the Tea Party who have little influence over public policy. Sometimes, the Tea Party is accused of supporting policies it had nothing to do with.

Writing at his blog at The Atlantic, liberal journalist Andrew Sullivan recently faulted the “Tea Party” for the recent budget-busting deal between Obama and congressional leaders that exploded the deficit by extending tax cuts, unemployment benefits, and government handouts: “immediately after the election, moreover, they did a deal borrowing a huge amount more and adding $700 billion to the debt.”

The irony is that Sullivan, one of Obama’s biggest cheerleaders, had earlier endorsed that very deal, a deal also endorsed by other liberal media like the Washington Post because of the government handouts it contained. In an explanation that was hard to follow, Sullivan said that this new “stimulus package financed by borrowing” would somehow create “the best context for serious reform” of the nation’s finances, providing a “big new stimulus” that would help Obama “as he moves toward re-election.”

By contrast, some Tea Partiers publicly opposed the deal. A Wall Street Journal article quotes a Tea Party activist and Senate candidate saying that “she decided to run after watching Congress pass legislation during this month’s lame duck session, including a package of tax cuts, that added to the national debt.”

Most Tea Party bloggers took no position on the deal. The few that did either opposed it or reluctantly supported it as the best one could expect from a government that would still be dominated by liberals in the next Congress (with Democrats controlling both the White House and the Senate).

I criticized the deal in a blog post that was reproduced at a blog called “Freedom Action“” that includes many Tea Party members. It drew no objections from any blogger or reader at that site (which has more than 300 members). I noted that the billions it will spend on extending unemployment benefits won’t stimulate the economy, but will financially burden states. 30-40 state unemployment funds are already insolvent or teetering on the edge, thanks to past federal extensions of unemployment benefits. Giving people unemployment benefits for years on end discourages people from taking lower-paying jobs, and results in some recipients gaming the system. It encourages people not to relocate in search of work, and not to take productive jobs that they think are beneath them, even if those jobs are the only jobs that they will realistically find once their jobless benefits come to an end, because of the disappearance of the type of job they once performed.

As the Heritage Foundation notes, “The consequences of extended unemployment benefits are some of the most conclusively established results in labor economic research. Extending either the amount or the duration of UI benefits increases the length of time that workers remain unemployed. UI benefits subsidize unemployment. They reduce the incentive unemployed workers have to search for new work and to make difficult choices–such as moving or switching industries–to begin a new job.” (The deal also contains other disincentives to work.)

Admittedly, the deal is not as economically-destructive as some of the measures that Obama previously pushed through Congress on party-line votes, such as the $800 billion stimulus package, which actually shrank the economy in several ways. (The stimulus used “green-jobs” subsidies to send American jobs overseas. 79 percent of those subsidies went to foreign firms, such as an Australian firm that imported Japanese wind turbines, effectively outsourcing American jobs. It also wiped out jobs in America’s export sector.)

EPA Approves Increased Ethanol Blend

by Brian McGraw on January 21, 2011

in Energy, Ethanol

Today the EPA gave initial approval of E15 blends for use in vehicles made in or after 2001, an extension of an initial ruling in October of 2010 that granted approval of E15 in vehicles model year 2007-2011. Predictable cheer-leading erupted from Growth Energy:

The EPA’s long awaited decision came in response to Growth Energy’s Green Jobs Waiver, a petition we filed in March of 2009 to raise the “blend wall”—the artificial limit on the ethanol market—and create new market opportunity for the industry.

Let us never forget the delicious irony of an ethanol trade association whining about the unfair government regulations that impede the development of their industry, when the majority of ethanol production in the United States is due solely to the ethanol mandates in the Renewable Fuel Standard.

All is not finished in the battle to force consumers to buy E15. The EPA has yet to finalize a number of regulatory decisions regarding potential mis-fueling of E15, and there are numerous state-level regulatory issues:

On January 21, 2011, EPA granted a partial waiver for E15 for use in MY2001-2006 light-duty motor vehicles. These decisions were based on test results provided by the U.S. Department of Energy (DOE) and other information regarding the potential effect of E15 on vehicle emissions. Taken together, the two actions allow, but do not require, E15 to be introduced into commerce for use in MY2001 and newer light-duty motor vehicles if conditions for mitigating misfueling and ensuring fuel quality are met. EPA is in the process of completing work on regulations that would provide a more practical means of meeting the conditions.

The partial waiver will introduce a number of complicated problems in 2011/2012 as refiners struggle to meet ethanol mandates while fueling stations are not legally compelled to sell E15. Given the price of ethanol isn’t sufficiently lower than gasoline (once you consider that it only provides ?66% of the fuel economy of gasoline), demand for E15 will be minimal outside of the mandate.

And as the American Petroleum Institute has noted, the mandate effectively gives EPA the ability to levy taxes on the oil industry in the form of non-compliance fines if oil refiners are unable to meet required mandates. The case linked to deals with cellulosic ethanol, but the same would apply if refiners were unable to sell sufficient E15 to meet the mandate.

Here is an interview (.mp3) with Bob Dineen, chief cheerleader lobbyist for Growth Energy.

How to Cop Proof Your Cell Phone

by Marc Scribner on January 21, 2011 · 4 comments

in Privacy, Tech & Telecom, Video

[youtube:http://www.youtube.com/watch?v=vVCROjpgCB0 285 234]

Students Learn Less in College, Even As Education Spending Skyrockets

by Hans Bader on January 21, 2011

in Culture, Economy, Employment

“Nearly half of the nation’s undergraduates show almost no gains in learning in their first two years of college, in large part because colleges don’t make academics a priority,” according to a new study discussed in USA Today. “36% showed little” gain after four years. Although education spending has exploded in recent years, students “spent 50% less time studying compared with students a few decades ago, the research shows.” “32% never took a course in a typical semester where they read more than 40 pages per week.”

Students are learning so little, and borrowing so much to attend college, that some are predicting massive defaults on student loans.

America spends far more on education than most other countries. Yet despite this lavish government support for education (which rewards colleges for increasing tuition), college tuition in the U.S. is skyrocketing. Americans can’t read or do math as well as the Japanese, even though America spends way more on education than Japan does, as a percentage of income.

K-12 education is better in Japan because teachers there learn through apprenticeships and on-the-job training, rather than taking useless classes filled with psychobabble at education school, as George Leef points out in “Nurturing the Dumbest Generation.” “In Japan, there are no education schools at all. Those who wish to become teachers first earn degrees in some academic discipline and some of them are then accepted as apprentices who learn teaching by assisting veterans in the classroom.”

States spend hundreds of millions of dollars operating colleges that are worthless diploma mills, yet manage to graduate almost no one – like Chicago State, “which has just a 12.8 percent six-year graduation rate,” or a college in El Paso that graduated only “1 out of 25 students in a timely manner.”

Some education experts are calling for “draconian education cuts” to eliminate harmful spending. Law professor Glenn Reynolds notes that “some spending on educational institutions” may actually have a “negative” effect on education. People endure useless college courses to get paper credentials, but they get their actual education through internships and work.

College tuition is often a rip-off, since most people who went to college because of rising college-attendance rates in recent years wound up in unskilled jobs (including 5,057 janitors who have Ph.Ds or other advanced degrees), and tuition is skyrocketing faster than housing costs did during the real estate bubble. (100 colleges charge at least $50,000 a year, compared to five in 2008-09.) Bush increased federal education spending 58 percent faster than inflation, while Obama seeks to double it. Spending has exploded at the K-12 level: per-pupil spending in the U.S. is among the highest in the world, and “inflation-adjusted K-12 spending tripled over the last 40 years.”

Image credit: Honeywell-Nobel Initiative’s flickr photostream.

Remember: Envy is a Deadly Sin

by Jacqueline Otto on January 21, 2011 · 3 comments

in Economy, Personal Liberty

This morning, The Economist led with an interesting article about global income inequality.  The article discusses the prevalent view that income inequality is bad for society. This view is broken down into the following three theories:

1. Countries with greater disparities of income fare worse on all manner of social indicators, from higher murder rates to lower life expectancy.

2. Inequality was a root cause of the financial crisis [because] politicians tried to counter the growing gap between rich and poor by encouraging poorer folk to take on more credit.

3. Inequality perverts politics, with Wall Street’s influence in Washington often cited as exhibit A of the unhealthy clout of a plutocratic elite.

The authors (correctly) identified these theories as wrong. By calling them “sloppy thinking,” they came short of calling this mindset what it deserves to be called — ignorant and, at time, willfully misleading.

One of their proposals is that,

Governments need to keep their focus on pushing up the bottom and middle rather than dragging down the top: investing in (and removing barriers to) education, abolishing rules that prevent the able from getting ahead and refocusing government spending on those that need it most.

While the idea of raising the floor instead of lowering the ceiling is on the right track, there is virtually no manner of government spending through which that can be achieved.  The same government programs that work to artificially “push” the bottom up, through regulation and spending, simultaneously “drag” the top down, and vise versa. The only way for the income floor to rise is by allowing the free market to function naturally.

But, the critics argue, if you allow the market to function naturally, we end up with significant income inequality and we are back to the original problems (see the above three theories).

The real problem, however, is that these critics are teaching people to look at the differences between their income and the ceiling and be envious of those at the top, instead of looking at the difference between their income and the floor and be grateful. Class envy has historically been a greater social ill than anything these critics have complained about.

Why would anyone wish class envy upon our society, instead of fostering a free market economy where hard work propels one to the top? Well, they really should not.

Income inequity is not a sin, but envy is. In fact, it’s a deadly one.

CEI Weekly: CEI’s Agenda for the New Congress

by Charles Huang on January 21, 2011

in Features

CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.

CEI Weekly
January 21, 2011

>>Featured Story

This week, as President Obama attempted to defend his plan for regulatory reform in The Wall Street Journal, CEI released its own set of recommendations for the new Congress. Liberate to Stimulate is a “bipartisan agenda to restore limited government and revive America’s economy.” The Agenda includes a list of specific steps President Obama and Congress should take to achieve lasting, enduring reforms. Read the full Agenda for Congress here.



>>Shaping the Debate

6 Painless Ways to Cut Federal Red Tape
Wayne Crews and Ryan Young’s op-ed in AOL News

Why You Should Always Encrypt Your Smartphone
Ryan Radia’s article in Ars Technica

Obama Needs to Confront Regulation
Wayne Crews’ column in Forbes

Not All Public-Private Partnerships Are Created Equal
Marc Scribner’s op-ed in Multihousing News

Politicized Science Costs Us All
Iain Murray’s op-ed in The Washington Times

No Call to Arms in Fight Against Health Care Reform
Hans Bader’s letter to the editor in The Boston Globe

Ex-Congressman Gets Soapbox for Violent Remarks
Hans Bader’s letter to the editor in The Washington Examiner

>>Best of the Blogs

Repeal Senseless and Job-Destroying Volcker Rule from Dodd-Frank
By John Berlau

How the President Can Foster the “Civil and Honest” Debate He Called For
By Hans Bader

Harper’s v. UAW
By Ivan Osorio

New York City Taxi Alliance Opposes Competition
By Brian McGraw

>> CEI Podcast:

January 20, 2011: The Future of Space Policy

CEI Adjunct Scholar and space policy expert Rand Simberg explains why NASA stagnated after its early success in bringing man to the moon. Fortunately, the future of private exploration is looking brighter every year. Private exploration’s increasing viability means that it is time to reevaluate NASA’s role in future space travel.

Tim Carney Knows How Washington Works

by Ryan Young on January 21, 2011

in Deregulate to Stimulate, Economy, Politics as Usual, Regulation

Former Warren Brookes Fellow Tim Carney’s latest Washington Examiner column, “Bail them out, regulate them, then work for them,” is a must-read.

Amy Friend, a former staffer for Sen. Chris Dodd, played a large role in writing the Dodd-Frank financial regulation bill. And she just got a new job at a lobbying firm. Tim explains:

There are two types of people on K Street: access people, who can get you in the door; and policy people, who know what’s on every page of every relevant bill and regulation. Friend is the latter. While business will dry up for other Dodd alumni on K Street, Friend is valuable because — to quote one Republican lobbyist — “she knows what’s on page twenty-three-[bleep]ing-hundred of that bill,” and every other page, too.

In other words, Friend didn’t just write a landmark piece of legislation — she wrote her meal ticket.

Tim doubts that Friend is corrupt. But her story is very common in Washington. Lobbying wouldn’t be such a booming business if regulation wasn’t too. And the revolving door between the Hill and K Street can be very profitable, even when no corruption is involved. Most people forget that regulators act just as self-interestedly as the people they regulate.

The Economics of Toilet Seats

by Ryan Young on January 21, 2011 · 1 comment

in Culture, Odds & Ends

Up or down? The debate is as old as the toilet itself. An enterprising young economist named Jay Pil Choi wrote a working paper titled “Up or Down? A Male Economist’s Manifesto on the Toilet Seat Etiquette,” and it turns out the correct answer is neither.

If the seat is always left down, men incur an inconvenience cost of 2: 1 to lift the seat, and 1 to lower it. Women incur a cost of 0. This is hardly fair.

Leaving the seat up is no better. The costs are the same. They just switch gender. This isn’t fair for women, who must lower the seat and raise it every time they use the loo.

Choi’s paper suggests a third way: leave the seat as you left it. As he explains:

With either up or down rule, each member of one gender group has to incur the inconvenience costs two times with each usage… This inefficiency can be avoided by using the selfish rule since the inconvenience costs are incurred only when the consecutive users are from different genders.

Quite clever. The highest possible inconvenience cost is 1. And if consecutive users are of the same gender, inconvenience costs are 0.

Unfortunately, this writer must continue to follow the down rule because his cats are too thirsty for their own good.

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