Whose Fossil Fuel Use Will G7 Leaders Reduce by 70%?



G7 leaders, led by German PM Angela Merkel (in blue) vowed this week to achieve aggressive cuts to global carbon emissions, although their plan was a bit lacking on details. [Image Source: EPA]

G7 leaders, led by German PM Angela Merkel (in blue) vowed this week to achieve aggressive cuts to global carbon emissions, although their plan was a bit lacking on details. [Image Source: EPA]

Our global political masters met in Germany this week: see how green they are? They’re walking ... in a field: can’t get any greener than that!

And, as usual, they are coming up with the definitive solutions to the greatest threats of today: the end of the use of fossil fuels—in 85 years.

No worries if that sounds a little pie-in-the-sky: they also promise to hit a 30-70% reduction by...2050!

The reduction certainly won’t come from the G7 leaders: no cutbacks in motorcades, fleets of presidential 747s, entourages of hundreds:

Obama’s one-night trip to Brussels last year entailed an entourage of 900, with 45 vehicles transported in three cargo planes (not to mention Air Force One and the Presidential Airlift Group), and his trip through Africa included hundreds of Secret Service agents, 56 support vehicles, including 14 limousines and three trucks, and fighter jets flying in shifts.

As also reported, last year’s UN summit on climate change held in Peru generated more CO2 than a small country.

So, if we can’t look to our “leaders” to set the example of conservation, just whose use of fossil fuels will Obama et al. restrict to achieve their lofty goals?

I’ll give you three guesses. (G7 leaders to their subjects: “Conservation for thee but not for me!”)

Then, start contemplating how a centrally mandated 70% reduction in today’s cheapest and most readily available energy will likely play out your daily life.

Meanwhile: these folks say no carbon use by 2100 is too late; while others point out there’s been no increase in warming in 18 years.

New TV Show Sparks Unnecessary Moral Outrage (and Proves People Don’t Understand Basic Economics)



12556986_SCBS recently released a new show titled, “The Briefcase.” Normally, I wouldn’t have given such a show a second glance...

But then I read reactions to the show on social media.

I found myself vaguely ashamed for [watching]...I kept reminding myself that I had to watch it in order to write about it.

[P]ossibly the most disgusting show on TV.

[The show] pits people in need against one another for entertainment.

[C]an we all agree that “The Briefcase” is an absolutely sickening premise for a reality TV show?

So what on Earth is the premise of this show?! Perhaps it’s a natural curiosity, perhaps I’m a genuinely terrible person, but I had to find out what lay behind what one writer called a “deviously surgical” premise for a show.

So I broke down and watched the first episode.

The basic plot is the following. A family experiencing financial hardship is given a briefcase with $101,000. The first $1,000 is theirs immediately to spend. Then comes “the twist.” The family is informed that there is another family, experiencing hardships that are either just as bad, or worse than their own. The family then has to decide over a period of several days how much of the remaining $100,000 to keep and how much to give to the other family. They can give away all of it, some of it, or none of it. Over the course of their decision-making process, they are offered more information about the other family, their circumstances, debts, and other details. In the final minutes of the show, the family is shocked to learn that the other family has also been given a briefcase and has been facing the same choice.

Call me a cold, calculated economist, but I fail to see the issue here—aside from the fact that the show just isn’t very good television.

Some people are claiming that the show exploits people—it’s “pitting poor people against each other.” The problem with this logic is that without a doubt this show is making its participants better off! The individuals are free to make their choice—regardless of whether they choose to keep all the money or give it away.

At a bare minimum, it makes their situation no worse. Consider the initial family given the briefcase. We’ll call them “Family A.” Family A has three options. They can keep all the money, give some of it away to “Family B,” or give all of it to Family B. For sake of simplicity, let’s assume that before the show, each family has $0.

Below are some of the possible outcomes (I assumed that “giving some away” meant half, though any distribution is viable).

Family A

Family B

$100,000

$0

$50,000

$50,000

$0

$100,000

What the chart above shows is what economists refer to as Pareto improvements. That is, in any of these scenarios, at least one person is made better off and no one is worse off as a result of the transaction. In the worst case, one of the parties ends up with $0—precisely what they had before the show started.

What about the “twist” at the end of the show—that the other family also has a briefcase?

In this case, taking both transactions into account, our outcomes look something like the following.

Family A

Family B

$200,000

$0

$100,000

$100,000

$0

$200,000

Once again, these are Pareto improvements. At least one family is better off than they were before and neither family is worse off. So while we may find the premise of this show to be in poor taste, or just plain stupid, let’s take a step back before we start making claims about exploitation. Without a doubt, the show is helping at least one family. Depending upon the decisions made by the participants, two families may wind up being significantly better off than they were at the start.

Health Jobs Double Growth in Jobs Report



Last Friday’s employment report was greeting as good news, with 280,000 jobs added in May. Health hiring doubled its April pace, adding 47,000 jobs (versus only 22,000 in the previous report), comprising about one of six nonfarm jobs. At a seasonally adjusted growth rate of 0.31 percent, health jobs are still growing faster than non-health jobs (0.18 percent).

As shown in Table 1, job growth continues to be concentrated in ambulatory settings, while nursing and residential care facilities added few jobs.

20150605 T1

Year-on-year growth is similar, as shown in Table 2, with jobs in ambulatory settings comprising two-thirds of health jobs, and jobs in nursing facilities effectively frozen. Health jobs grew at 2.79 percent versus 2.18 percent for non-health jobs.

20150605 T2

Technical note: In case it is not clear, these are jobs in health services, not in producers such as pharmaceutical or medical-device companies.

The Avengers of Civil Society?



avengers-age-of-ultron-alternateWhile watching the summer blockbuster Avengers: Age of Ultron, I had trouble shaking thoughts from two books not usually connected to action heroes, let alone movies: Adam Smith’s The Theory of Moral Sentiments and C.S. Lewis’s The Four Loves. I doubt writer/director Joss Whedon had these social philosophers in mind when he was writing the screenplay. But, then again, perhaps the principles underlying these books are not that far-fetched for the creator of such character-driven projects as Firefly and Buffy the Vampire Slayer.

In the 2015 film, Ultron uses each Avenger’s deepest and darkest personal fears to manipulate them and neutralize their effectiveness. Tony Stark’s (Ironman) hubris leads him to overreach in his ability to control and manipulate artificial intelligence, which becomes a professional and personal breaking point for the team. Natasha Romanova’s (Black Widow) personal brokenness from her training as an assassin and spy makes her vulnerable to manipulation that immobilizes her during a fight. Bruce Banner (The Hulk) becomes incapacitated through his fear over a lack of self-control and trust that others can rein him in. The Avengers are thus defeated by Ultron and forced to retreat to a safe house.

In their quest for personal redemption and world salvation, the Avengers can’t operate as solo heroes or even as just a team. They need to become a group that interjects different skills at tactically important times. They also must be strategic. This requires a deeper understanding and a more complete embracement of individual motivations, values, and priorities. The superheroes are forced to forge new bonds and develop new understandings among each other. Bruce Banner and Natasha Romanova bond over their inability to have children after Bruce sees that her relationship with Clint Barton (Hawkeye) is platonic. Trust destroyed by Tony Stark’s machinations with artificial intelligence (after fears instigated by the Scarlet Witch) is rebuilt as the Avengers recognize the necessity of mutual cooperation, accept the sincerity of their personal goals, validate the truth of their common objectives, and find pleasure in working with each other and achieving success.

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Racehorses and Circus Animals—Stifle Your Outrage



KY DerbyFlipping channels the other day, I came across an ad for SeaWorld. Instead of showing images of flipping dolphins, laughing children, and Shamu the killer whale, the commercial was more of a PSA. Instead of its typical advertising, the spot consisted of discussions about how the organization cares for its animals and their lifespans.

As it turns out, the ad campaign was a response to a documentary called “Blackfish,” a film that questioned SeaWorld’s treatment of its animals.

SeaWorld has long been fodder for animal-rights activists. (The mere mention of the name “SeaWorld” may make members of PETA foam at the mouth.)

It’s not just dolphins and killer whales, however, that make this and other animal groups upset.

I grew up in Louisville, Kentucky. Aside from being the home of Louisville Slugger baseball bats and a variety of bourbon (yes, all good bourbon comes from Kentucky), my home city is perhaps best known for the “fastest two minutes in sports.” The first Saturday in May, a field of three-year-old thoroughbred horses competes to win the Kentucky Derby.

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Net Neutrality Can Harm Your Health



health_informationLast November, Independent institute Senior Fellow William Shughart wrote a couple of blot posts (here and here) skeptical of President Obama’s intention to impose so-called net neutrality on the Internet. The Federal Communications Commission (FCC) finally imposed net neutrality with some 300 pages of rules last February.

I learned from Roslyn Layton of the American Enterprise Institute that the net-neutrality rule threatens one of the most promising areas of innovation in health care—using mobile devices to maintain and improve people’s health.

An example of this is an arrangement between UnitedHealth Group and AT&T launched last year. UnitedHealth Group wanted to incentivize low-income pregnant women to watch prenatal care videos on their mobile phones without deducting the usage from their mobile account balance. Unfortunately, advocates for net neutrality mischaracterize this program, called “sponsored data,” as discriminatory, and FCC’s new rule gives the agency the power to regulate this kind of preventive health care out of existence.

The principle that the FCC can prevent a health plan or provider from sponsoring data over the Internet to a patient (at no marginal price to the user) that will prevent illness and future health costs, just because the government does not want a “two-speed Internet,” is a grotesque abuse of power.

Health Spending Unscathed in Shrinking Economy



a_better_choice_180x270Last Friday’s terrible revision to first quarter GDP—from an initial estimate of 0.2 percent real growth to a real loss of 0.7 percent—confirms that health spending stands over our weak economy like a colossus.

In the initial estimate, personal consumption spending on health services increased by $23 billion (chained 2009 dollars). Today’s second estimate sets that at $24.2 billion (Table 3, line 17). So, we can be pretty confident that the folks at the Bureau of Economic Analysis who do this good work have mastered how to measure spending on health services.

Significant revisions to GDP between the initial and second estimates are common. However, this emphasizes how much of our prosperity is being devoured by a health system that is still driving everyone crazy, post-Obamacare. The real drop in GDP was a loss of $30.6 billion.

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Impacts of Sexual Assault on Civil Society Go Beyond Statistics



Today’s article is a qualified mae culpa. One of the first comments on an earlier post on campus rape and sexual assault challenged the veracity of a datapoint used frequently by anti-sexual assault advocates: one in four women will be sexually assaulted by the time they leave college. It’s a number I’ve referenced in my own writings. Christina Hoff Sommers does a nice job of dismantling this number, and she accomplishes this in part by deconstructing the 20% figure in light of the newest data from a recent (December 2014) Bureau of Justice Statistics (BJS) report.

stayingsafe-cover-frontThe BJS report is probably the best available data examining trends in rape and sexual assault victimizations between 1995 and 2013 for women aged 18 to 24. The key data points are 6.1 per 1,000 female college students report being victims of sexual assault or rape, significantly lower than the 20% figured used by many advocates and advocacy groups. Moreover, 2.0 per 1,000 report being victims of completed rape, and 1.5 per 1,000 report being victims of attempted rape. While these numbers are substantially below the higher estimates, the BJS report is careful to note that the higher figures are from studies that use different methodologies and different definitions of rape and sexual assault.

If these numbers–6.1 per 1,000 for sexual assault victimations and 3.5 per 1,000 for completed and/or attempted rape–are the “true” representation of sexual assault and rape prevalence on American college campuses, even though they are much lower than previous estimates, what does this mean for women and freedom on campus? More than one might think, and this is why I believe libertarians should engage on this issue and why this article is a “qualified” mae culpa.

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Maybe the Government Just Shouldn’t Ask People if They’re Uninsured



a_better_choice_180x270Sir John Cowperthwaite was the Financial Secretary of the British Colony of Hong Kong when it began to boom in the 1960s:

Asked what is the key thing poor countries should do, Cowperthwaite once remarked: “They should abolish the Office of National Statistics.” In Hong Kong, he refused to collect all but the most superficial statistics, believing that statistics were dangerous: they would led the state to to fiddle about remedying perceived ills, simultaneously hindering the ability of the market economy to work. This caused consternation in Whitehall: a delegation of civil servants were sent to Hong Kong to find out why employment statistics were not being collected; Cowperthwaite literally sent them home on the next plane back. (Alex Singleton, The Guardian)

What does this have to do with health insurance? The Wall Street Journal’s Jo Craven McGinty reports on the Census Bureau’s rejigging of its measurement of how many Americans are without health insurance:

Sometimes, fixing one statistical problem creates a new one.

For years, the Current Population Survey conducted by the U.S. Census Bureau overestimated the number of people without health insurance. Last year, the Census Bureau revised the survey to correct the error, which was likely caused by the way the government asked Americans about their coverage.

Part of the problem was the CPS intended to count people as uninsured only if they were without health insurance for an entire calendar year, while other surveys generally measure coverage at the time of the interview.

The more stringent standard should produce a lower estimate. Instead, the CPS estimates were often somewhat higher than other surveys, causing researchers to suspect the numbers were wrong, probably because some respondents answered incorrectly.

Who wouldn’t be confused, answering a question about our fragmented, government-heavy, health insurance. There is a big difference between being uninsured for one week and being uninsured for one year, but the surveys have bigger problems. Most importantly, they include Medicaid—a welfare program—as health insurance.

Government’s relentless obsession with mandating that everyone has health insurance, instead of protecting our liberty to acquire health goods and services of our own informed choice, has led to much mischief.

I expect that if Sir John Cowperthwaite were alive to advise Americans which statistics our government should be forbidden from collecting and analyzing, he might start with health insurance.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s new book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.

What Abercrombie and Fitch Can Teach Us about the Same-Sex Marriage Controversy



male modelWhen I was a young teenager, Abercrombie & Fitch was one of the “it” brands. Everyone in school wanted to wear it, and it was absolutely used to signal that one was up-to-date on recent trends. As the child of two schoolteachers, I learned very early in my life that paying $50 for a t-shirt I’d grow out of in six months was an absurd expense that would not be paid (you can imagine how well this line went over with a 12-year-old girl).

A few years ago, former Abercrombie & Fitch CEO Mike Jeffries and the company came under fire when Business Insider published a piece containing comments Jeffries had made in 2006. In the interview, Jeffries stated that he didn’t want fat or “uncool” people wearing the brand. In fact, the store carried ladies pants only up to size 10 and didn’t carry any women’s sizes above a “large.” Jeffries stated,

[W]e hire good-looking people in our stores. Because good-looking people attract good-looking people, and we want to market to cool, good-looking people. We don’t want to market to anyone other than that.

In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and lots of friends. A lot of people don’t belong, and they can’t belong. Are we exclusionary? Absolutely.

The company came under scrutiny once again after a lawsuit regarding its aesthetic guidelines, or “look policy,” for its employees, dictating everything from hair color to nail length. The outrage was immediate and intense. A variety of celebrities and talk shows discussed the story and called for a boycott of the brand. Another group began giving Abercrombie & Fitch shirts to homeless people.

Then, miraculously, something amazing happened. In 2013, Abercrombie & Fitch, in a complete departure from its standing practices, started stocking larger women’s clothing. Although the company continues to defend many of its policies for employees, it’s clear that Abercrombie has caved to the pressure and now encourages even “uncool” clientele to buy their products.

So why should we care about a change in policy for some clothing company?

We should care because it’s a marvelous example of market forces at work. The CEO of Abercrombie chose to indulge his preferences, what some have called “fat shaming” or “fat-bias.” He chose to restrict his company’s product to particular groups and exclude others. As a result, he not only eliminated a potentially large source of revenue, but turned many potential customers away from his brand as they found the policies offensive. Jeffries’ firm suffered the consequences as a result. Their popularity waned, their profits declined, and eventually Jeffries stepped down as CEO.

Often when discussing issues of discrimination and exclusion, there are immediately calls for government to “do something” to remedy it. “Congress should pass a law,” “government should ban,” “retailers should be required to...” The list goes on and on.

But note here that Congress didn’t have to pass a law stating that Abercrombie & Fitch had to create clothes for larger women or let chess-team captains shop in their stores. No committees needed to be formed. No bureaus were created to advance the cause of “ugly people.” Instead, it was individuals, their choices, and profit and loss incentives that put a check on poor business decisions. Jeffries and Abercrombie made choices that cut against many people’s ideals—and suffered the consequences.

Such a case and the logic behind it are important to remember when discussing a variety of current issues. Several weeks ago, I discussed one such issue surrounding same-sex marriage. In particular, I made the argument that businesses should be allowed to serve whatever clientele they wish. That is, if a bakery or photographer has moral or other qualms about providing their services to a same-sex couple, they should be allowed to decline their services. I made the case that vendors choosing not to serve same-sex couples would suffer the consequences of such a policy, whether positive or negative.

The case of Abercrombie & Fitch is one example of how the market enforces social norms. If people think discriminating against overweight, ugly, or “uncool” people is wrong, then letting a company like Abercrombie demonstrate its preferences against these groups unleashes the wrath of the consumer. In the same way, allowing vendors to openly indulge their preferences on same-sex marriage will let market forces work. Those who find such policies offensive won’t buy, and those who agree will continue to support the business.

So perhaps it’s time to stifle our moral outrage and quit calling on the government to “fix” these kinds of problems and instead let the market do its job.

  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org