Sunday, July 31, 2011

The debt ceiling:

Saturday, July 30, 2011

What does a successful fiscal adjustment in the Debt to GBP ratio of a country look like? Harvard’s Alberto Alesina and Silvia Ardagna examined efforts to reduce the debt in OECD nations over the last 40 years, classified them into successful and unsuccessful, and then measured the mix of spending reductions and revenue enhancements in each group. The results look like this:

The results are pretty clear. Unsuccessful attempts to cut debt tended to raise taxes significantly, accompanied by small spending cuts. Successful attempts did so by cutting spending by 2% and cutting taxes.

Veronique de Rugy at Reason adds:
remember that this research is consistent with the work of former Obama Council of Economic Advisers chairman Christina Romer and her economist husband, David Romer, which shows that increasing taxes by 1 percent of GDP for deficit-reduction purposes leads to a 3 percent reduction in GDP.

Friday, July 29, 2011

Volokh's Todd Zywicki notes that Harvard's Elizabeth Warren, the doyenne of dishonest academics, unwittingly serves up some very interesting data:
“big necessities: mortgages (up 76 percent), cars (up 52 percent), taxes (up 25 percent), and health insurance (up 74 percent).” The problem is that while it is an accurate representation for mortgages, cars, and health insurance, that the expenses increase by that percentage, it is not for taxes. For the other expenses it is the percentage increase in dollars spent on those expenses. For taxes, however, the 25% increase is actually the percentage increase in the percentage of income spent on taxes. So the 25% is not how many more dollars go to paying taxes, it represents the household’s change from paying 24% of its income in taxes to 33% of its income in taxes–a change of 25% in the percentage of income dedicated to taxes, not a change of 25% in spending on taxes.

What this means is that once taxes are converted to an apples-to-apples comparison–percentage change in dollars instead of percentage change in percentage–household spending on taxes actually increased 140%, not 25%. The entire two-income trap, therefore, is actually a two-income tax trap, as I noted in my Wall Street Journal commentary on this awhile back...

In fact, based on their data once the math is done the real conclusions of Warren and Tyagi are inescapable and in fact extremely conservative: the financial problems of the middle class are caused by an astonishing rise in the tax burden on middle class families over the past three decades. Nowhere, however, will one read Professor Warren advocating income and property tax cuts as the obvious policy implication of their book–although that is unambiguously the logical inference.

Thursday, July 28, 2011

The latest empirical data on climate change:
Study co-author Dr. Roy Spencer, a principal research scientist at the University of Alabama in Huntsville and U.S. Science Team Leader for the Advanced Microwave Scanning Radiometer flying on NASA's Aqua satellite, reports that real-world data from NASA's Terra satellite contradict multiple assumptions fed into alarmist computer models.

"The satellite observations suggest there is much more energy lost to space during and after warming than the climate models show," Spencer said in a July 26 University of Alabama press release. "There is a huge discrepancy between the data and the forecasts that is especially big over the oceans."

Sunday, July 24, 2011

The success of rail in Europe?

Proponents of high speed rail in the US frequently point to Europe and elsewhere for inspiration. However, they envision a Europe that doesn't exist. Britain's Commission for Integrated Transport shows, in the above graph from their 2007 comparative study on transport, that even in Europe, the overwhelming majority of passenger-miles occurs via cars, not train.

Wednesday, July 20, 2011

More from the War on Science:
The chief of the world’s leading physics lab at CERN in Geneva has prohibited scientists from drawing conclusions from a major experiment. The CLOUD (“Cosmics Leaving Outdoor Droplets”) experiment examines the role that energetic particles from deep space play in cloud formation. CLOUD uses CERN’s proton synchrotron to examine nucleation.

CERN Director General Rolf-Dieter Heuer told Welt Online that the scientists should refrain from drawing conclusions from the latest experiment.

“I have asked the colleagues to present the results clearly, but not to interpret them,” reports veteran science editor Nigel Calder on his blog. Why?

Because, Heuer says, “That would go immediately into the highly political arena of the climate change debate. One has to make clear that cosmic radiation is only one of many parameters.”

Tuesday, July 19, 2011

The War on Science:
Opponents of global warming should be given less coverage by the BBC than the climate change lobby, the corporation will rule.

The BBC is set to publish a report tomorrow on its science output announcing changes to rules on impartiality.

Following the overhaul, programme makers and broadcasters will be compelled to give less prominence to those who oppose the scientific community's majority view.

According to the Daily Telegraph, the report draws heavily on an independent review of BBC coverage by Steve Jones, a professor of genetics at University College London.

Professor Jones is understood to have cleared the BBC of any suggestion of bias in its programming.

Thursday, July 7, 2011

Federal Revenue and Spending:

via Ed Morrissey

Tuesday, July 5, 2011

Scientific literacy and climate change:
The conventional explanation for controversy over climate change emphasizes impediments to public understanding: Limited popular knowledge of science, the inability of ordinary citizens to assess technical information, and the resulting widespread use of unreliable cognitive heuristics to assess risk. A large survey of U.S. adults (N = 1540) found little support for this account. On the whole, the most scientifically literate and numerate subjects were slightly less likely, not more, to see climate change as a serious threat than the least scientifically literate and numerate ones.

Monday, July 4, 2011

What was the point of the Constitution?
In a Time article on the Constitution, Richard Stengel writes: “If the Constitution was intended to limit the federal government, it sure doesn’t say so.”

Yes, it does. The Tenth Amendment says: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Even before the adoption of the Bill of Rights, James Madison explained the original understanding of the document in Federalist 45: “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.”

Saturday, July 2, 2011

Rehabilitating Lochner: How does Lochner v New York, on working conditions in bakeries compare to Plessy v. Ferguson which established "separate but equal"?
“The Lochner line of cases pioneered the protection of the right of women to compete with men for employment free from sex-based regulations, the right of African Americans to exercise liberty and property rights free from Jim Crow legislation, and civil liberties against the states ranging from freedom of expression to the right to choose a private school education for one’s children.”

Rather than being lumped together with the Plessy case, Bernstein argues, the Lochner ruling should be regarded as the anti-Plessy—a decision that refused to defer to stereotypes and self-dealing among the ruling class.

It is important to note that Lochner wasn't about just working conditions so much as an effort by large, politically connected groups to force out their small competitors:
As is often the case with regulation, large bakeries didn’t mind the law governing maximum hours because they could hire multiple shifts. Small bakeries, with their smaller workforces, found compliance far more difficult. Small bakers felt that the law was enforced much more vigorously where nonunion bakeries were concerned, and Lochner, an immigrant who had opened his own bakery in Utica in 1894 where he worked alongside his wife and employees, soon attracted official attention.

Elsewhere, as Bernstein recounts, advocates for African-Americans’ and women’s rights often made use of freedom of contract as a way to strike down laws limiting those groups’ economic freedom. Freedom of contract was a powerful weapon for dissolving the legal rules that, unsurprisingly, tended to work against those excluded from legislative power. Economic freedom, far from being a tool of the big bosses, was an important way for the underdogs to gain the freedom to compete, and to undermine the legal support that was essential to making Jim Crow and related laws work.

Friday, July 1, 2011

John Goodman highlight some reasons behind the recent prescription drug shortages:
The Federal Food and Drug Administration (FDA) has been stepping up its quality enforcement efforts — levying fines and forcing manufacturers to retool their facilities both here and abroad. Not only has this more rigorous regulatory oversight slowed down production, the FDA’s “zero tolerance” regime is forcing manufacturers to abide by rules that are rigid, inflexible and unforgiving. For example, a drug manufacturer must get approval for how much of a drug it plans to produce, as well as the timeframe. If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.

h/t: Marginal Revolution
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