January 2012

High-Speed Fail: Even Left-Leaning Washington Post Criticizes Obama Administration Rail Boondoggles in California and Elsewhere

by Hans Bader on November 16, 2011

in Labor, Mobility, Politics as Usual, Regulation

Even the left-leaning Washington Post, which has not endorsed a Republican for President since 1952, is getting fed up with the Obama administration’s desire to waste billions on impractical high-speed rail boondoogles that would transport few people at enormous cost (while providing work at inflated wages for politically-powerful unions). In an editorial entitled “California’s High-Speed Rail System Is Going Nowhere Fast,” the Post’s editorial board points out that

THINGS JUST WENT from bad to worse for high-speed passenger rail in California. After the Golden State’s voters approved a $9 billion bullet-train bond issue in 2008, officials said they could build an 800-mile system by 2020, for $35.7 billion. The cost projection now, as issued by the state Nov.?1: $98.5 billion, with a completion date of 2033.

Time to pull the plug, right? Not according to Gov. Jerry Brown (D). The new “business plan is solid and lays the foundation for a 21st-century transportation system,” he said. Equally upbeat, Transportation Secretary Ray LaHood offered Mr. Brown his congratulations on “a sound, step-by-step strategy for building a world-class high-speed rail network.”

This is unreal. Apart from the bond issue and $3.6 billion in federal funds already in hand, the cash-strapped state hasn’t credibly identified a source of funds for the system. The new report basically repeats previous assertions that, if California builds, federal and private-sector dollars will come. This is wishful thinking in an era of massive federal deficits, and if the opportunities for the private sector were really so great, where are the companies clamoring to invest?

Actually, the gigantic cost estimate amounts to an indirect confirmation of the doubts voiced in several independent analyses, which have focused on not only the rail plan’s mythical funding but also its high ridership projections — and the attendant risk that California will get stuck with expensive operating subsidies as well as billions in debt service. . .

As questionable as this project is, we would have less business objecting if the only money at risk was California’s. But the Obama and Brown administrations are talking about devoting the nation’s funds to what looks more and more like a boondoggle. If the president and governor won’t slam on the brakes, then Congress or the California legislature must find a way to prevent the spending. Somebody, please, stop this train.

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House Republicans’ Shortsighted Proposal to Fund Roads through More Drilling

by Marc Scribner on November 16, 2011 · 7 comments

in Energy, Features, Mobility, Natural Resources, Politics as Usual

Post image for House Republicans’ Shortsighted Proposal to Fund Roads through More Drilling

Recently, Republican members of the U.S. House of Representatives have proposed opening up more federal land and offshore areas to natural resource extraction. Such a move would both increase domestic energy production and raise government revenues through royalty payments. During the current economic slump and resulting fiscal crunch, anything that can increase the quantity of energy supplied and reduce government deficits should be lauded. But what some Republican members of Congress propose to spend these revenues on is far from laudable.

Led by House Speaker John Boehner, some in the Republican caucus wish to pour oil and natural gas lease revenues into the Highway Trust Fund, which has suffered from severe shortfalls for several years now. Right now, a six-year surface transportation reauthorization proposal (“the highway bill,” the previous multi-year reauthorization expired 777 days ago) from House Republicans needs to find an estimated $75-$100 billion in additional revenues in order to fully fund their bill, and proponents of such a funding mechanism argue that this will help close the gap. Many in the free market energy community are also applauding.

However, both groups fail to appreciate the long-run dangers of moving from the current (and longstanding) “user-pays” principle to a “taxpayer-pays” principle. They ought to pay more attention to the concerns of free market transportation scholars, such as the Reason Foundation’s Robert Poole and the Independent Institute’s Gabriel Roth. Since the Interstate program was established in 1956, federal highway spending relied on the “user-pays/user-benefits” principle. The idea was to tax road users (on fuel, tires, etc.) and then use the tax revenues to fund maintenance and capacity enhancements. This makes sense, as one would expect user tax revenue to approximately track user demand. Revenues were deposited into the Highway Trust Fund, which is partially shielded from the highly politicized appropriations battles that take place over most funding. This concept has long enjoyed broad bipartisan support.

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My Job Creation Proposal

by Ryan Young on November 16, 2011

in Deregulate to Stimulate, Economy, Employment, Regulation

Over at The American Spectator, I break down the debate over regulation’s impact on the job market and propose one regulation that could create countless jobs:

As everyone knows, winter is coming. And many of the nation’s least-employed states will see a lot of snow this year. Already, giant snowplows are beginning to traverse the highways and byways of Michigan, Ohio, and other states going through hard times. With these plows, one man can do the work of a hundred.

I say we ban snowplows and hand out some shovels.

Think about it for a minute. In Michigan alone, nearly 520,000 people are looking for a job and can’t find one. Tens of thousands of miles of roads zig and zag across the state. If this winter lives up to lofty Midwestern standards, it’s possible that every last one of those 520,000 could work at least part time clearing the way for their fellow citizens. And all because of regulation!

I do enjoy economic humor. Read the whole thing here.

Farm Bill Negotiated In Secrecy

by Daniel Rivera Greenwood on November 15, 2011

in Agriculture, Trade

The Hill reports that a new “secret Farm Bill” will be included with the super committee’s debt deal. As The Hill points out, legislators are “using the super committee to avoid what would be a more public, election-year debate in 2012, when the current farm bill expires and new legislation would be scheduled for writing.”

As mentioned on OpenMarket before, this presents a big moral hazard problem. Legislators are using the secrecy and lack of accountability present in super committee deliberations and adding legislation beneficial only to narrow sectors of the economy. In the farm bill’s case, the super committee asked members of the Agriculture Committee to come up with $23 billion in cuts by November 1, and although the deadline has passed, the Agriculture Committee is still working on the proposal. Beyond these details, information is difficult to obtain.

Under “normal” farm bill negotiations, input from farmers, communities and advocacy groups would be accounted for, and negotiations would be made public. With the super committee, the bill is being negotiated behind closed doors, and would be passed as part of the debt reduction deal, not as a stand-alone bill.

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Debating Return-Free Taxes: Rep. Jim Cooper Responds

by Ryan Young on November 15, 2011

in Economy

Last week, I made the case against return-free taxes in an op-ed in The Hill. Under such a system, the IRS would prepare your taxes for you.

Rep. Jim Cooper (D-Tenn.) is the sponsor of a bill that would institute a return-free program. He responded to my criticisms in a letter to the editor that ran yesterday. He explains his position, and for some reason also throws an ad hominem my way. I’ve met Rep. Cooper and have worked with him and his staff on several occasions. We disagree on this issue, but overall I have a positive opinion of him. He is more philosophical and better-read than the average congressman, but he doesn’t seem to quite understand my position. Rep. Cooper argues:

Arguments that a Simple Return is a regressive tax on the poor assume the government will take advantage of those who file basic returns by consistently erring in its own interest and hoping filers don’t notice. There are no facts to support this claim.

Actually, there are. I share one of them in my article:

That is exactly the case in the U.K., which uses a return-free system. The government has a 15 percent error rate, overwhelmingly in the government’s favor. In 2009, British taxpayers were overcharged the equivalent of $370 million. Those lucky enough to underpay still didn’t get a good deal. They are held liable for the government’s mistakes. Today, 1.4 million people are on the hook for an average of $2,200 each — a month’s pay for many people.

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Penny-Wise, Pound-Foolish on NASA

by Rand Simberg on November 15, 2011 · 1 comment

in Features, Space

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On Sunday, flights to the ISS resumed for the first time since the retirement of the Shuttle last summer. As I’ve discussed here in the past, NASA is now paying Russia $62M per ticket to deliver astronauts to the space station (included in that price is the use of the Soyuz spacecraft as a three-person “lifeboat” for the station while docked to it, a function that the Shuttle never served because it could only stay in orbit for a couple weeks). Given that the Russians are now monopoly providers for both these services, the price is likely to go up with any renewed contracts in future years. The only realistic solution to this problem is to get multiple competitive domestic providers on line as soon as possible, which NASA is attempting to do with its commercial crew program. They requested a budget for it of $850M for 2012. A few weeks ago, both Lori Garver, the NASA deputy administrator and George Nield, the head of the FAA’s office of commercial space transportation warned that if NASA didn’t get its full budget request, it would either delay the program, or reduce the number of competitors, or both. According to Ms. Garver, a one-year delay would result in an additional cost of at least $450M for continued purchase of space transportation services from the Russians.

But last summer, the House only appropriated about $300M, and earlier this month the Senate appropriated $500M, neither of which is near the $850M request. Unfortunately, as expected, as part of the “minibus” appropriations bill this week, they split the difference, and while this hasn’t been confirmed, it appears that NASA ends up with about $400M for commercial crew, less than half of the request, while continuing to fully fund Shuttlyndra. What this means for the program is unclear, but NASA will definitely have to replan and rescope. The result is unlikely to be good for either the taxpayers or space development.

[Update a few minutes after posting]

OK, it’s official. Over at Space Politics, Jeff Foust has the breakdown on the numbers, and some notes:

Commercial crew, as previously noted here, gets $406 million in the bill, $100 million of which is set aside until certain acquisition milestones for the human exploration program are achieved. The report notes that NASA’s plans for the program have assumed much higher funding levels than what Congress is provided, and thus “NASA is directed to work expeditiously to alter its management and acquisition strategy for the program as necessary to make the best use of available resources”. This approach, the report adds, could include “an accelerated down-select process that would concentrate and maximize the impact of each appropriated dollar.”

There are currently several players, some funded by NASA and others self-funding through what are called “Space Act Agreements.” NASA had hoped to keep several companies involved and to eventually narrow down to no fewer than two, to maintain competition and redundancy. This budget doesn’t prevent that, but as is suggested, it may not be possible to keep the broader competition going as long as had been originally hoped for. The biggest concern should be that Congress will continue to be penurious with this vital program while fully funding the unneeded pork of the heavy lifter, resulting in program delays (with associated costs, as described above) and perhaps only a single provider in the end.

Obama Administration Promotes Panic Over “Bullying” To Incite Attacks on Students’ Rights and Well-Being

by Hans Bader on November 15, 2011 · 7 comments

in Legal, Nanny State, Personal Liberty, Sanctimony

Obama administration officials call bullying an “epidemic” and a “pandemic.” But in reality, bullying and violence have steadily gone down in the nation’s schools, as studies funded by the Justice Department have shown.

 As the Associated Press noted in 2010, “There’s been a sharp drop in the percentage of America’s children being bullied or beaten up by their peers, according to a new national survey by experts . . . The study, funded by the U.S. Department of Justice, found that the percentage of children who reported being physically bullied over the past year had declined from nearly 22 percent in 2003 to under 15 percent in 2008.”

The myth that bullying has risen among girls was debunked in a 2010 New York Times column, “The Myth of Mean Girls.” As it noted, “this panic is a hoax. We have examined every major index of crime on which the authorities rely. None show a recent increase in girls’ violence; in fact, every reliable measure shows that violence by girls has been plummeting for years.”

If bullying has gone down, how can it be a pandemic?  By broadening the definition of bullying to include speech and vague power relationships.

The anti-bullying website nobully.com defines even “eye rolling” as bullying, so if you roll your eyes at a bully, you yourself can be accused of “bullying.” Its ridiculously-broad definition has been adopted by schools like Fox Hill and Alvarado Elementary, which define “eye rolling” and “staring” as “bullying.”  As a small middle-schooler, I rolled my eyes at bullies. A recent survey defined bullying to include “the use of one’s . . . popularity to . . . embarrass another person on purpose.”

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Cronyism: Obama Administration Showers Your Tax Dollars on Shifty Wall Street Operator and Liberal Donor

by Hans Bader on November 15, 2011

in Bailout Watch, Economy, Politics as Usual

In a corrupt deal, the Obama administration is paying a shifty Wall Street operator’s firm an extravagantly inflated price for an unneeded vaccine, at a cost to taxpayers of hundreds of millions of dollars.

The Los Angeles Times has taken note:

Over the last year, the Obama administration has aggressively pushed a $433-million plan to buy an experimental smallpox drug, despite uncertainty over whether it is needed or will work. Senior officials have taken unusual steps to secure the contract for New York-based Siga Technologies Inc., whose controlling shareholder is billionaire Ronald O. Perelman, one of the world’s richest men and a longtime Democratic Party donor. When Siga complained that contracting specialists at the Department of Health and Human Services were resisting the company’s financial demands, senior officials replaced the government’s lead negotiator for the deal, interviews and documents show. When Siga was in danger of losing its grip on the contract a year ago, the officials blocked other firms from competing. Siga was awarded the final contract in May through a “sole-source” procurement in which it was the only company asked to submit a proposal. The contract calls for Siga to deliver 1.7 million doses of the drug for the nation’s biodefense stockpile. The price of approximately $255 per dose is well above what the government’s specialists had earlier said was reasonable, according to internal documents and interviews.

This is insane. Smallpox was totally eradicated years ago. There are maybe two lab samples left in the world, and they are under high security in the U.S. and Russia. If someone can break U.S. or Russian security, why not steal a nuke instead? How would a terrorist weaponize it? Why would a sovereign state want to risk infecting itself along with others? So it makes little sense to waste money on this. Ron Perelman is a horribly shifty individual, who has made a lot of money at the expense of minority shareholders and credulous bondholders. His ability to get purportedly distinguished board members of his companies to approve rank abuse of stakeholders in his entities is amazing. This political payoff to Perelman can’t be explained by anything other than rank cronyism.

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What’s in My Makeup Bag? — Junkscience

by Angela Logomasini on November 14, 2011 · 1 comment

in Environment, Features, Health and Illness, Precaution & Risk, Regulation

Post image for What’s in My Makeup Bag? — Junkscience

The Oregon Environmental Council and the regional government for the Portland, Oregon, metropolitan area recently released a survey of young women regarding their personal care product use, entitled What’s in My Makeup Bag? This report suggests that the young women are uninformed about the chemical risks posed by their makeup. But rather than offer women and the public-at-large sound and balanced information about cosmetics and health, the survey authors push misinformation and junk science.

CEI has already debunked most of their points in various publications, with particular detail to the cosmetics industry in our recent paper on cosmetics: The True Story of Cosmetics: Exposing the Risks of the Smear Campaign. Our report includes information on chemicals that greens never mention. For example, greens never point out how the chemicals they want to eliminate are necessary to prevent the development of dangerous bacteria or other pathogens in consumer products. You can learn more about that in The True Story of Cosmetics.

Take a look at the key chemical “villains” in the What’s in My Makeup Bag? report, and you will see how misguided the activist claims really are:

Claim about Parabens: “They [parabens] can mimic the hormone estrogen, and in animal studies, they have been linked to cancer and shown to interfere with reproduction at high doses.”

Reality Check:  So what? Rodents get cancer from lots of things when administered high doses — including carrots, broccoli, and lots of other healthy foods. Rodent studies are of limited value because human metabolic processes differ from that of rodents, and our exposures to parabens are thousands of times lower. Check the chapter, “The True Causes of Cancer,” in our The Environmental Source, and see why you need not fear trace chemicals. As for mimicking hormones, consider the fact that the potency of these chemicals is too low to have any impacts. The CEI study, Nature’s Hormone Factory, demonstrates that we have more to fear from eating peas, which contain far more potent “endocrine mimicking” chemicals — complements of Mother Nature. Of note parabens are chemicals used to ward off the development of dangerous bacteria. For more information on parabens see: The True Story of Cosmetics.

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Today’s Links: November 14, 2011

by Nicole Ciandella on November 14, 2011

in Odds & Ends

OPINION

KATIE ROIPHE: “In Favor of Dirty Jokes and Risqué Remarks”
“Codes of sexual harassment imagine an entirely symmetrical universe, where people are never outrageous, rude, awkward, excessive or confused, where sexual interest is always absent or reciprocated, in other words a universe that does not entirely resemble our own. We don’t legislate against meanness, or power struggles, or political maneuvering, or manipulation in offices, and how could we? So should we be legislating against rogue flirtations, the floating out of invitations? Obviously there is a line, which if the allegations against Mr. Cain are true, he has crossed, but there are many behaviors loosely included under the creative, capacious rubric of sexual harassment that do not cross that line. ”

L. GORDON CROVITZ: “Technology Rewrites the Fourth Amendment”
“The Fourth Amendment is a rare part of the Constitution that explicitly requires judges to adjust standards to reflect changes in society. What was unreasonable before may be reasonable now. Most adults in the U.S. have created Facebook accounts, which disclose more information than the most avid gossip-monger could have produced in the days before social media.”

CBS NEWS: “Congress: Trading Stock on Inside Information?” (VIDEO)

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