Power & Market
The 50-year US war on drugs has been a total failure, with hundreds of billions of dollars flushed down the drain and our civil liberties whittled away fighting a war that cannot be won. The 20 year “war on terror” has likewise been a gigantic US government disaster: hundreds of billions wasted, civil liberties scorched, and a world far more dangerous than when this war was launched after 9/11.
So what to do about two of the greatest policy failures in US history? According to President Trump and many in Washington, the answer is to combine them!
Last week Trump declared that, in light of an attack last month on US tourists in Mexico, he would be designating Mexican drug cartels as foreign terrorist organizations. Asked if he would send in drones to attack targets in Mexico, he responded, “I don't want to say what I'm going to do, but they will be designated.” The Mexican president was quick to pour cold water on the idea of US drones taking out Mexican targets, responding to Trump’s threats saying “cooperation, yes; interventionism, no.”
Trump is not alone in drawing the wrong conclusions from the increasing violence coming from the drug cartels south of the border. A group of US Senators sent a letter to Secretary of State Mike Pompeo urging that the US slap sanctions on the drug cartels in response to the killing of Americans.
Do these Senators really believe that facing US sanctions these drug cartels will close down and move into legitimate activities? Sanctions don’t work against countries and they sure won’t work against drug cartels.
A recent editorial in the conservative Federalist publication urges President Trump to launch “unilateral, no-permission special forces raids” into Mexico like the US did into Pakistan to fight ISIS and al-Qaeda!
I am sure the military-industrial complex loves this idea! Another big war to keep Washington rich at the expense of the rest of us. And the 2001 Authorization for the Use of Military Force can even be trotted out to fight this brand new “terror war”!
Perhaps unintentionally, however, this sudden push to look at the Mexican drug cartels as we did ISIS and al-Qaeda does make sense. After all, the rise of the drug cartels and the rise of the terror cartels have both been due to bad US policy. It was the US invasion of Iraq based on neocon lies that led to the creation of ISIS and expansion of al-Qaeda in the Middle East and it was the US war on drugs that led to the rise of the drug cartels in Mexico.
Here’s another suggestion: maybe instead of doing the same things that do not work we might look at the actual cause of the problems. The US war on drugs makes drugs enormously profitable to Mexican suppliers eager to satisfy a ravenous US market. A study last year by the CATO Institute found that with the steady decriminalization and legalization of marijuana across the United States, the average US Border Patrol agent seized 78 percent less marijuana in fiscal year 2018 than in FY 2013.
Instead of declaring war on Mexico, perhaps the answer to the drug cartel problem is to take away their incentives by ending the war on drugs. Why not try something that actually works?
For a variety of reasons, rich countries are more easily able to cut per capita carbon emissions. These include both better access to cleaner energy sources and the fact it is more politically feasible to cut emissions in a rich country than in a poor country. In poor and middle-income countries, voters and residents tend to live closer to subsistence levels and the cost of cutting emissions could be the difference between a steady food supply and malnutrition. It could mean a real cut to the availability of reliable medical services.
Proportionally speaking, a cut to carbon emissions in a wealthy country will rarely lead to such stark choices.
So, if we want to see where carbon emissions are likely to grow the most — or at least shrink the least — in coming decades we should be looking outside the wealthy West.
When it comes to total emissions, China has taken the top spot over the past decade, although as recently as 2000, China's total carbon emissions were lower than that of both the United States and the EU.
But Chinese carbon emissions are now double that of the US. As of 2014, China produced 10.2 billion metric tons, while the US produced 5.2 billion metric tons.
Source: CO2 emissions, (metric tons per capita) via the World Bank; totals calculated using population data via World Bank.
As astute readers are likely, to note, however, the US has far fewer people than does China. So, not surprisingly, we find that the US still leads in per capital carbon emissions:
Source: CO2 emissions, (metric tons per capita) via the World Bank.
The differences generally reflect the standard of living. For example, the US, Canada, and Australia, are among the countries with the highest number of vehicles per capita, and with the most living space per capita. The EU has noticeably lower carbon emissions because living standards are lower there, especially in Southern Europe and areas of central Europe that were once behind the Iron Curtain. Moreover, much of Europe has less extreme climate extremes as North America, meaning less of a need for cooling and heating.
However, because wealthier countries can more easily afford cleaner-burning fuels and alternative fuels, the largest decreases in carbon emissions (over this time frame) have come in the Wealthiest countries:
Source: CO2 emissions, (metric tons per capita) via the World Bank.
I should note, however, that the measures of decline in the rich world come out a little differently when we measure "decline from peak." In the US, emissions peaked in 1973 at 22.5 metric tons per capita. In Australia, emissions didn't peak until 2008 (at 18.2 per cap metric tons), and emissions have dropped 15 percent since then. In Canada, per cap emissions peaked in 2003 at 17.4 metric tons, and have fallen 12.3 percent since then. In the US, emissions peaked The EU's per cap emissions peaked in 1979 at 10.5, and have dropped 36 percent since then.
It a totally different story in the developing world, however, where carbon emissions increased 179 percent in China, and 77 percent in India.
As we saw above, because of its high population, China has already overtaken every other country in terms of total CO2 emissions. As a proportion of global carbon emissions, China is closing in on 30 percent of the global total, while the US has now dropped below fifteen percent:
Source: "Share of annual CO2 emissions" from Our World In Data.
Thus, the future is one in which talk about global-warming policy will only mean anything if it focuses on the developing world, and especially on China and India.
So far, however, these countries have shown little interest in abiding by the Rich World's proposed mandates for the developing world. China won't even talk about capping emissions before 2030, and as recently as 2015, India was saying it won't be cutting emissions for another thirty years. India has softened its predictions since then, but still refuses to commit to cutting use of coal, and won't accept legally-binding emissions goals.
The rich world has proposed sending the developing world huge subsidies for cutting emissions, but the developing world has learned from experience, and is unlikely to base national policy around a promise of future action from first-world regimes.
Thus, when asked about how to get China to commit to climate goals, activists like Michael Bloomberg appear to be at a loss .
.@MikeBloomberg tells @FiringLineShow that China's leader is addressing pollution to satisfy constituents & secure his political future.— Firing Line with Margaret Hoover (@FiringLineShow) September 27, 2019
"The Communist Party wants to stay in power in China and they listen to the public," he says. pic.twitter.com/B9SoAXJwrM
Bloomberg claims "the public" will demand changes, but as Foreign Policy magazine has recently reported: "There is almost no daily public concern about climate change in China. The issue is fairly muted in Chinese-language media beyond coverage of Beijing’s own programs, and there is little individual concern about electricity usage or air travel."
As mentioned by Bloomberg, the average Chinese person is concerned about air pollution in Chinese cities, which is quite bad by modern rich-world standards. The regime is more likely to take action in that regard, but that can be done with far less impact on total carbon emissions than the global climate planners would like to see.
But it's not nothing. After all, local concerns over air pollution do have a meaningful effect on carbon emissions over time, because cleaner burning fuel has the benefit of reducing the sort of "smog" that directly impacts daily lives.
The problem — from the climate activists' perspective — is that this is likely to take place over a time frame much longer than the next decade or so. This is because the Chinese also have to take into account the impact further environmental regulation has on standards of living. In China, where the standard of living is much lower, cuts to that standard of living are far painful than they are in the developed world.
Like everyone else, though, the Chinese and the Indians want a city skyline without smog, and they want clean rivers. But they also want abundant energy. The answer lies in technological progress, which also has the added benefit of bringing cleaner water and air.
But while standards of living in the developing world remain so far below those of the rich world, this is likely to pose a political problem for any efforts to impose emissions restrictions on countries that haven't yet had their chance to get rich, too.
The US Constitution never granted the federal government authority to create a central bank. The Founders, having lived through hyperinflation themselves, understood that government should never have a printing press at its disposal. But from the very beginning of America’s founding, the desire for a crony central bank was strong.
But, unfortunately, a third attempt was successful and the Federal Reserve was unconstitutionally created by Congress in 1913. Americans have been living under a corrupt and immoral monetary system ever since. The Federal Reserve is the printing press that has financed the creation of the largest government to ever exist. Endless welfare and endless military spending are both made possible by the Federal Reserve. The Fed can just print the money for whatever the US establishment wants, so those of us who long for a Constitutional and limited government have few tools at our disposal.
Despite all the propaganda claiming “independence,” the Fed has always been a deeply political institution. Because the Fed is a government-created monopoly with key government-appointed employees, its so-called “independence” is a mere fiction. However, the US Congress created the Fed with legislation; it can also abolish the Fed with legislation.
Last week, the facade of Federal Reserve “independence” was dealt a severe blow. Ironically, the person who broadcast to the world that the Fed is anything but “independent” was ex-New York Fed President Bill Dudley. Dudley wrote that, “Trump’s re-election arguably presents a threat to the United States’ and global economy, and if the goal of monetary policy is to achieve the best long-term economic outcome, the Fed’s officials should consider how their decisions would affect the political outcome of 2020.”
The timing of Dudley’s threats to use Fed monetary policy to affect the outcome of a US election couldn’t come at a more striking time. After all, for more than two solid years Americans have been bombarded with fabricated stories about Russians rigging our elections. And yet here is a Federal Reserve official threatening to do the same exact thing - but this time for real!
Whether it’s the mainstream media, the CIA, the FBI, or now the Federal Reserve, more and more Americans are waking up to the fact that there is a Deep State in America and its interests have nothing to do with American liberty. In fact, our liberty is what the Deep State wants to abolish.
When it comes to the Federal Reserve, I stand firmly by my conviction that it needs to be audited and then ended as soon as possible.
Former Secretary of State George Schultz has an idea for dealing with increased immigration from the Northern Triangle region of Central America, which includes of El Salvador, Guatemala and Honduras: he wants to spend more money on foreign aid.
In yesterday's Wall Street Journal, Schultz writes that the countries of the Northern Triangle could "increase the 'supply' of good governance by us[ing] foreign aid to fund better policing, transparency and higher-quality services—and apply international pressure to root out corruption and encourage political reform."
And who could supply this foreign aid? According top Schultz, "the U.S. is the only nation with the economic, technological and political authority to lead," and "[t]he Inter-American Development Bank could do so by redirecting existing funds without new U.S. expenditures, and could get started with a phone call in Washington."
Schultz wisely doesn't mention any dollar amounts. How could he? His proposal is clearly meant to be a sort of trial balloon: demand more government spending now, and work out all the details in the back rooms later.
But we know how this sort of thing works. There is no real expectation that foreign aid would actually remake the economies of the Northern Triangle.
In reality, it will be yet another foreign aid boondoggle: friends of the US regime will receive funds. There will be little follow-up as to how the money is spent. The money may even go to fund despots who will use the funds to murder their enemies. George Schultz's personal friends and colleagues will no doubt get their cut. This is how the US foreign aid game is played.
It is interesting that Schultz doesn't mention something that does have the potential for revolutionizing the region's access to capital and its standard of living. It will do this while greatly lessening the incentive to emigrate from the region to the US: unrestricted trade with the United States.
To accomplish this, the US need not collect any new taxes. It need not impose any new regulations. It need not form any international "coalitions."
Instead, it only has to make the Northern Triangle a true Free Trade Zone with full access to US markets.
At this point, some observers may claims "the US already has a free trade agreement with Central America! In fact, the region is largely duty free!" But this objection helps to illustrate just how much the term "free trade" has been corrupted in the phrase "free trade agreement." In practice, only qualifying goods can be imported to the US from Central America duty free. In order to qualify, goods must meet a variety of bureaucratic requirements stemming from "rule of origin" requirements. These rules exist to prevent "trade diversion" and other types of trade in which a Central American country might import parts from outside the free trade zone, add only small amounts of value, and then export the finished product to the US. Thus, trade between Central America and the US is not really free, and the trade agreements specifically prevent Central American countries from becoming trade and shipping centers where goods and services can be freely imported and exported globally.1
If Central America had a true free trade agreement with the US, however, both US and foreign manufacturers would have an enormous incentive to set up shop in the region and produce goods there for the US market.
Over time, capital would flood into the region, greatly increasing the standard of living for Central Americans while providing new sources of goods and services for American entrepreneurs and consumers.
The success of such a plan, of course, is not guaranteed. The regimes of El Salvador, Guatemala, and Honduras could squander the opportunity. They could insist on high domestic taxes or an insecure legal environment in which private business owners would have reason to fear expropriation by the regime.
But when facing the possibility of true free trade with the US, the stakes would become very high indeed, and the regime could choose between guaranteed moderate levels of tax revenue, or the disastrous policies of expropriation.
But no matter how it turns out, the US taxpayer is not on the hook for anything. There is no risk of foreign aid flushed down the toilet. Instead, the upside is substantial: access to low-cost goods and services from American, Asian, and European firms all hungry to take advantage of this new "free trade zone" in the western hemisphere. American entrepreneurs would be able to provides goods and services at lower prices. They could hire more workers. They could invest more of their profits.
Moreover, the geo-political benefits would be substantial. The regimes of the Northern Triangle would become committed to maintaining friendly relations with the US, and the pressures of high levels of migration from the region would be lessened.
In his essay " The Case for Free Trade and Restricted Immigration ," Hans-Hermann Hoppe recognized the benefits of free trade in immigration policy:
The relationship between trade and migration is one of elastic substitutibility (rather than rigid exclusivity): the more (or less) you have of one, the less (or more) you need of the other . [Emphasis added.] Other things being equal, businesses move to low wage areas, and labor moves to high wage areas, thus effecting a tendency toward the equalization of wage rates (for the same kind of labor) as well as the optimal localization of capital. With political borders separating high- from low-wage areas, and with national (nation-wide) trade and immigration policies in effect, these normal tendencies—of immigration and capital export—are weakened with free trade and strengthened with protectionism. As long as Mexican products—the products of a low-wage area—can freely enter a high-wage area such as the U.S., the incentive for Mexican people to move to the U.S. is reduced. In contrast, if Mexican products are prevented from entering the American market, the attraction for Mexican workers to move to the U.S. is increased. Similarly, when U.S. producers are free to buy from and sell to Mexican producers and consumers, capital exports from the U.S. to Mexico will be reduced; however, when U.S. producers are prevented from doing so, the attraction of moving production from the U.S. to Mexico is increased.
Bizarrely, protectionists take the opposite self-defeating approach: they want to cut off trade with other nations, thus reducing the standard of living. This then increases the incentive for foreigners to emigrate to the United States. The protectionists then complain there's too much immigration and the government must intervene even more to control both trade and migration.
Not surprisingly, Ludwig von Mises saw the ridiculouslness of this position. As I noted in my article " If You Don't Like Immigration, You Should Love Free Trade ":
Opponents and proponents of immigration may argue endlessly about the potential downsides and upsides of immigration. (For an especially nuanced and insightful view of the downsides, see Ludwig von Mises's work on nationalism and immigration .)
With free trade, though, there is no downside, which is why Mises, who allowed for a number of caveats on immigration, made no exceptions for free trade.
For many modern protectionists, though, the desire to close off trade stems not just from economic ignorance, but from an emotional desire to actually harm other countries on nationalistic grounds. The economic implications of these policies then become secondary to other ideological agendas. Mises understood this well, and in Human Action concluded :
We may, for the sake of argument, disregard the fact that protectionism also hurts the interests of the nations which resort to it. But there can be no doubt that protectionism aims at damaging the interests of foreign peoples and really does damage them. ... The philosophy of protectionism is a philosophy of war.
George Schultz is correct in the sense that a prosperous Central America is a Central America with less incentive to send its workers and families to North America. But the real solution does not lie in throwing a few extra bucks at the central American regimes in hope they might build a couple of new highways. The real solution lies in expansion of trade, capital investment, and . Only then can a sustainable solution to the region's poverty be found.
- 1. It should also be noted that the burden of gaining "certification" for qualification under the free trade agreements place small companies at a relative disadvantage compared to larger companies. For more on how these rules affect trade flows, see: "Preferential Rules of Origin in Regional Trade Agreements." https://www.wto.org/english/res_e/reser_e/ersd201305_e.pdf
Bernie Sanders is a delusional hard-core statist, but that’s part of what makes him attractive for some voters.
Simply stated, they think he’s authentic rather than a finger-in-the-wind politician.
Related: Public School Teachers Are Not Underpaid by Zach Garris
But I’m not so sure that’s true.
I pointed out in 2015 that he’s not even true to his socialist ideology. Rather than promoting government ownership, central planning, and price controls, he has behaved like a conventional left-wing politician. Indeed, there was almost no difference between his voting record and those of Barack Obama and Hillary Clinton.
Whether that’s good or bad is a matter of judgement, of course.
Today, though, I want to highlight something that’s unambiguously bad. He’s decided that currying favor with union bosses at the National Education Association is so important that it’s okay to trap kids from poor families in failing schools. And that, to me, makes him a political hack rather than an honest leftist.
Check out these excerpts from a story in the New York Times.
Senator Bernie Sanders took aim at charter schools on Saturday… In a 10-point plan, Mr. Sanders…said that, if elected, he would…forbid…federal spending on new charter schools as well as…ban…for-profit charter schools — which account for a small proportion of existing charters. “The proliferation of charter schools has disproportionately affected communities of color,” Mr. Sanders wrote… Mr. Sanders of Vermont would also require that charter schools be subject to the same oversight as public schools… Parts of the plan focused on educators, declaring Mr. Sanders’s support for a $60,000 baseline for teachers’ starting salaries as well as unionization efforts by charter schoolteachers.
By the way, I’m not a big fan of charter schools. It would be far better to have true school choice and allow parents to pick high-performing private schools.
Related: We Need More Tax Breaks for Education by Ron Paul
But charter schools are definitely a better option if the only other choice is a failing government school. Especially since pouring more money into a broken system doesn’t work. Regardless of whether it’s a Democrat plan to waste money or a Republican plan to waste money.
This assumes, however, that the goal is to help children get a good education so they have a better chance for a good life.
That’s not what motivates Bernie Sanders. Like many Democrats, his main goal is to appease the teacher unions. And that means protecting and preserving the privileges and perks of union members and the government’s education monopoly.
P.P.S. Just like it’s disgusting that Obama’s Secretary of Education chose private schools for his kids (as did Obama) while fighting against school choice for poor families.
P.P.S. On an uplifting note, Fran Tarkenton, the former Georgia Bulldog (he also played a bit in the NFL) used a sports analogy to explain the benefits of school choice.
P.P.P.S. It’s also uplifting to see very successful school choice systems operate in nations such as Canada, Sweden, Chile, and the Netherlands. And India doesn’t have school choice, but it’s a remarkable example of how private schools are the only good option for poor families that want upward mobility.
P.P.P.P.S. The Washington Post provides an example of honest and decent leftism, having editorialized in favor of poor children over teacher unions.
Originally published at International Liberty
Since when are industriousness and hard work criticized? The New York Times op-ed page. Alissa Quart complains,
this nouveau moonlighting continues to be exalted as cool, empowering or freeing. This mantra is false: Side hustles are not simply a new version of working as a “wage slave” so that we can do what we love in our off hours. Instead, far more often, people take on second or third side hustles because of wage stagnation or low pay at their full-time jobs.
So, what’s another word for wage stagnation but inflation. However, Ms. Quart, the author of Squeezed: Why Our Families Can’t Afford America, doesn’t mention the Federal Reserve or increases in the supply of money.
Quart’s Sunday Times piece is entitled “The Con of the Side Hustle.” People taking on multiple jobs refer to them as “side hustles.” Which is kind of cute. Uber is recruiting online, not with the tagline “do you have to have a second job to pay your bills” but rather something cool, like, “Get your side hustle on.”
It just so happens I’ve had occasion to use Uber lately and usually engage the driver in conversation. None were complaining about making a little money on the side even though they have “day jobs.” One was a blackjack dealer who said he made $47,000 last year dealing. When he gets off work he’s bored, so he drives and makes extra money.
Another was a financial planner whose wife just had a baby. He said he was driving to cover the new baby expenses but also to meet potential clients. My favorite driver is a Vice President of Player Development at a large local casino. He was driving his wife’s “shift” because he lost a bet between them. His wife drives because she’s home with their toddler and likes to drive a few hours both for the money but also for adult conversation.
Ms. Quart is far more exercised about these guy’s side hustles than they appeared to be.
Later in her piece, Ms. Quart really cranks up her ire,
Yet this sales pitch for the “side hustle” takes what we once called, more drably, another job and gives it a gloss, with a tiny shot of Superfly, disguising unstable working hours and a lack of bargaining power as liberation. You can see the twisted alchemy of what Reddit’s founder Alexis Ohanian has called “ hustle porn. ”
All this hand wringing is about prices rising faster than incomes and people having the time and willingness to pursue work and pay for more goods and services rather than live with less and enjoy more leisure time. Murray Rothbard wrote in the “Mystery of Banking,”
The essence of inflation is the process by which a large and hidden tax is imposed on much of society for the benefit of government and the early receivers of the new money. Inflationary increases of the money supply are pernicious forms of tax because they are covert, and few people are able to understand why prices are rising. Direct, overt taxation raises hackles and can cause revolution; inflationary increases of the money supply can fool the public — its victims — for centuries.
Of course, Ms. Quart casts no stones at the government or the central bank. It’s private businesses that are to blame. She implores us to never use the words “side hustle,” be more truthful, and most importantly, “we can agitate to raise wages. If we do that, we won’t need cute euphemisms to cloak the chaotic truth of working life in today’s America.”
The truth of the matter is, the Fed makes most all of us poorer, including businesses, while enriching the government. Bravo to those with the gumption to have a side hustle.
The Federal Reserve Board of Governors today released a new report today noting changes in net worth for households and nonprofit organizations.
As a result, the Drudge Report featured, at the page top, the headline " Households see biggest decline in net worth since the financial crisis... "
The placement and asserted urgency of the headline may overstate things. This number could potentially signal a brewing recession, although, since the data is highly aggregated, it tells us little about how a sizable number of households are actually affected.
Using the Fed's data, we find that net worth dropped quarter-to-quarter by 3.45 percent. That's the largest drop since the fourth quarter of 2008, when it dropped 5.87 percent.
Taking the numbers year-over-year, growth in the fourth quarter was slightly positive, increasing 0.8 percent, which, however, is the smallest growth rate since the third quarter of 2009.
The drop was due to the fourth quarter's sizable drop in the stock markets. For households with heads not near retirement age, this isn't much of a problem. For older household heads, however, the drops could serve as a wake-up call. If the stock market does enter a short-term down cycle this could be a problem for those who won't have time to wait around for stocks to recover their value again following another recession.
President Trump’s frustration with the Federal Reserve’s (minuscule) interest rate increases that he blames for the downturn in the stock market has reportedly led him to inquire if he has the authority to remove Fed Chairman Jerome Powell. Chairman Powell has stated that he would not comply with a presidential request for his resignation, meaning President Trump would have to fire Powell if Trump was serious about removing him.
The law creating the Federal Reserve gives the president power to remove members of the Federal Reserve Board — including the chairman — “for cause.” The law is silent on what does, and does not, constitute a justifiable cause for removal. So, President Trump may be able to fire Powell for not tailoring monetary policy to the president’s liking.
By firing Powell, President Trump would once and for all dispel the myth that the Federal Reserve is free from political interference. All modern presidents have tried to influence the Federal Reserve’s policies. Is Trump’s threatening to fire Powell worse than President Lyndon Johnson shoving a Fed chairman against a wall after the Federal Reserve increased interest rates? Or worse than President Carter “promoting” an uncooperative Fed chairman to Treasury secretary?
Yet, until President Trump began attacking the Fed on Twitter, the only individuals expressing concerns about political interference with the Federal Reserve in recent years were those claiming the Audit the Fed bill politicizes monetary policy. The truth is that the audit bill, which was recently reintroduced in the House of Representatives by Rep. Thomas Massie (R-KY) and will soon be reintroduced in the Senate by Sen. Rand Paul (R-KY), does not in any way expand Congress’ authority over the Fed. The bill simply authorizes the General Accountability Office to perform a full audit of the Fed’s conduct of monetary policy, including the Fed’s dealings with Wall Street and foreign central banks and governments.
Many Audit the Fed supporters have no desire to give Congress or the president authority over any aspect of monetary policy, including the ability to set interest rates. Interest rates are the price of money. Like all prices, interest rates should be set by the market, not by central planners. It is amazing that even many economists who generally support free markets and oppose central planning support allowing a government-created central bank to influence something as fundamental as the price of money.
Those who claim that auditing the Fed will jeopardize the economy are implicitly saying that the current system is flawed. After all, how stable can a system be if it is threatened by transparency?
Auditing the Fed is supported by nearly 75 percent of Americans. In Congress, the bill has been supported not just by conservatives and libertarians, but by progressives in Congress like Dennis Kucinich, Bernie Sanders, and Peter DeFazio. President Trump championed auditing the Federal Reserve during his 2016 campaign. But, despite his recent criticism of the Fed, he has not promoted the legislation since his election.
As the US economy falls into another Federal Reserve-caused economic downturn, support for auditing the Fed will grow among Americans of all political ideologies. Congress and the president can and must come together to tear down the wall of secrecy around the central bank. Auditing the Fed is the first step in changing the monetary policy that has created a debt-and-bubble-based economy; facilitated the rise of the welfare-warfare state; and burdened Americans with a hidden, constantly increasing, and regressive inflation tax.
[Editors Note: After days of rioting in the streets of Paris, French President Emmanuel Macron was forced to backtrack today on proposed gas taxes. While this episode demonstrated the unpopularity of trying to raise taxes in the name of fighting climate change, Mises Institute Senior Fellow Robert Murphy recently noted at IER that this is only the start for "climate interventionists."]
Say what you will about the climate policy discussions at Vox, but they don’t mince words. They come right out and tell you how much they want to micromanage every last detail of your life. Vox’s resident expert, David Roberts, recently interviewed policy wonk and author Hal Harvey, to discuss which areas of society government should regulate in the name of slowing climate change. Everything was on the table—ranging from building codes to auto fuel efficiency to diet to family size—with the only debate being over the relative results from the various interventions.
Among other results, this peek into the interventionist mentality should serve as a wake-up call for the few writers who keep charmingly calling on libertarians and conservatives to strike a carbon tax deal with progressive leftists. As the Roberts/Harvey discussion says quite plainly, a carbon tax is just one arrow in the quiver of those championing aggressive government intervention to slow climate change.
A Carbon Tax Is Not Enough
Let me validate the carbon tax claim first. Here’s the key exchange from the Vox interview:
David Roberts: These days, people across the political spectrum are talking about carbon pricing. How does it fit into the larger effort?
Hal Harvey: The thing about carbon pricing is, it’s helpful, but it’s not dispositive. There are a number of sectors that are impervious to a carbon price, or close to impervious.
A carbon price works when it’s part of a package that includes R&D and performance standards. It does not work in isolation. It helps, but it doesn’t do nearly as much as is required.
Harvey elsewhere in the interview explicitly criticizes the standard “market solution” rhetoric behind a carbon tax when he says:
[Government-mandated performance standards] have a bad rep from an age-old and completely upside-down debate about “command-and-control” policy. But we use performance standards all the time, and they work really well. Our buildings don’t burn down very much; they used to burn down all the time. Our meat’s not poisoned; it used to be poisoned, or you couldn’t tell. And so forth. If you just tell somebody, this is the minimum performance required, guess what? Engineers are really good at meeting it cost-effectively.
In addition to their (naïve) promises of revenue neutrality, those pushing for a carbon tax swap deal also promise conservatives and libertarians that a “price on carbon” would allow for the dismantling of the existing top-down regulations. Yet we now have several lines of evidence to show just how naïve this hope is: (1) Harvey in the quotation above throws them under the bus. (2) The recent Curbelo carbon tax bill contained no *meaningful* regulatory relief. (3) Economist Paul Krugman is fine with outright bans on new (and existing?) coal-fired power plants, and (4) the people at Vox have said for yearsthat a carbon tax would only work in conjunction with other anti-emission government policies. Notice that I am not scouring obscure subreddit threads to find Marxists posting from a hipster café, I am quoting from quite mainstream sources who are openly declaring that putting “a price on carbon” will not do enough to reduce emissions.
The Interventionist Mentality
The reader should also realize that Roberts and Harvey don’t merely consider fuel economy standards and building efficiency codes when it comes to “command and control” regulations. Everything is on the table, and the only reason to refrain from pursuing certain strategies is the dilution of political capital. The following excerpt illustrates:
David Roberts: The book also has nothing about behavior change — no turning off lights or going vegetarian. Do you find that lever unrealistic?
Hal Harvey: It’s a policy design book, and there aren’t many policies that have people change their diet. Michael Bloomberg taxed sugar, so there’s one. But we’re not gonna have the tons-of-barbecue-per-capita tax in North Carolina…
We have limited political bandwidth. If you’re serious about change, you have to identify the decision makers that can innovate the most tons the fastest….There are 7.5 billion decision makers on diet. There are 250 utility commissioners in America — and utility commissioners control half the carbon in America.
Trying to invoke behavior change on something as personal as eating en masse is morally sound, it’s ecologically a good idea, but as a carbon strategy, it doesn’t scratch the surface.
Indeed, even when they give a nod to basic human rights, Roberts and Harvey sound creepy. Consider this exchange:
David Roberts: Paul Hawken’s Drawdown Project looked at options for reducing greenhouse gases and found that educating girls and family planning were the two most potent.
Hal Harvey: When I was at the Hewlett Foundation, we sponsored a study by the National Center for Atmospheric Research that asked the question: Globally, if you met unmet need for contraceptives — that is to say, no coercion whatsoever — what would it cost and what would the carbon impact be?
We found large-scale abatement at less than a dollar a ton. So I’m completely in favor of that. [Bold added.]
It’s the part in bold that is chilling. For starters, I point out that this is the one area of life—the decision on how many children to have—where Harvey apparently feels that the government should not be using coercion to alter people’s behavior; coercive interventions in every other arena—from building design to diet to urban transit—were only tempered by pragmatic considerations.
Beyond that, the reason Harvey had to stress that his approach would be voluntary is that historically, this wasn’t taken for granted. There is a long and sordid history of wiser-than-thou social planners forcibly restricting how many children others could have, all in the name of some higher social good.
Indeed, Vox’s founder—Ezra Klein—recently got himself into an awkward spot when the website originally promoted his discussion with Bill Gates using the following tweet:
Vox quickly deleted the tweet after outrage and advertised the interview in a more sensitive manner, but the whole episode offered another peek into the interventionist mindset.
On these pages I have tirelessly pushed back against the small but vocal group of pundits and scholars who call on conservatives and libertarians to accept a carbon “tax swap deal” with leftist progressives. Beyond their failure to appreciate some of the technical nuances in the tax literature, these pleas overlook the simple fact that the mainstream thought leaders among the wonkish progressives have long since moved beyond the idea of a simple “price on carbon.” Every aspect of our lives, from our cars to our meals to our family sizes, affects global emissions—and therefore the interventionists want every tool at their disposal to control others.
As an addendum to last week's article on the prominence of civilian-owned guns versus homicide rates, it may be interesting to look at the diversity in gun prominence across European countries.
Contrary to the broad generalizations and over-simplifications spread by US gun-control advocates about European gun control, there is actually quite a diverse range in gun prominence and gun control laws across Europe.
Returning to the Small Arms Survey data, released earlier this year, we see that gun prominence in Europe ranges from 2 per 100 people in Hungary to 39 per 100 in Serbia:
Comparing these numbers to homicide rates, however, we clearly don't find much of a relationship at all.
Homicide rates in nearly all cases are below 2 per 100,000 which is a very low rate by any global or historical standard.
But, as we can see, civilian guns in Austria, for instance, are six times more numerous what they are in the UK. But the homicide rate is lower in Austria. Similarly, there are twelve times more civilian guns in Switzerland than in the Netherlands. Yet both countries have about the same homicide rates.
Attempts at proving causality here then especially starts to go off the rails when we look at Russia. In Russia, there is a modest 12 guns per 100 people — which is about half the Swiss rate. And yet the country's homicide rate is 10.8 per 100,000.
What can explain these large differences?
In the case of Russia, at least, we certainly can't blame things on lax gun control laws. Gun ownership requires registration and licensing. Handguns and rifles with shorter barrels are tightly controlled.
By contrast, guns are easier to acquire in Switzerland, Finland, Serbia, and Austria — although we find registration and licensing requirements in most cases. Especially notable is the Czech Republic which, by European standards, has very lax gun laws. In fact, it is remarkably easy to acquire a conceal-carry permit in the country, and more than 200,000 such permits (in a country of fewer than 11,000,000 people) have been issued.
The Czech republic has also made headlines in recent years by additional legislative efforts to further ease gun restrictions in certain cases.
The Czech Republic, by the way, has one of the lowest homicide rates in Europe, at less than one per 100,000.
Household Gun Ownership vs. Gun Prevalence
It is helpful to remember, though, that even in cases where gun prevalence is high, gun ownership rates (on a household basis) might still be low. That is, it's entirely possible in some cases that only a small number of people own most of the civilian guns that the Small Arms Survey says exist. This could lead to a situation in which few people have guns in spite of there being a large number of guns overall. However, while this is theoretically possible, it has not been demonstrated to be a common occurrence. Moreover, this lopsided situation is more likely in poorer countries where the high cost of firearms, combined with government-mandated licenses, is prohibitive for much of the population, leaving ownership a realistic option open to only a relatively few wealthy residents.
International comparisons in gun ownership rates, however, are hard to find. Most articles that purport to make these comparisons are usually using the Small Arms Survey data, and are thus just comparing gun prevalence.
(At the very least, considering both high gun prevalence and relative ease of purchase in countries like Switzerland, Austria, and Serbia, we have good reason to believe that both gun ownership rates and prevalence are comparatively high in some areas of Europe.)
Few gun control advocates trouble themselves with these details, however. For many, it apparently remains good enough to simply conclude "more guns=more crime," even when the numbers fail to show much connection at all.