Thursday, November 01, 2012

Big Storm Opportunism

Did you know Hurricane Sandy favors higher marginal tax rates?

Our former editor Robert Bartley once quipped (fondly) about the writer Jude Wanniski that he thought a capital-gains tax cut could intercept a Soviet SS-20 missile in mid-flight. We were reminded of that monomania Tuesday as the political left more or less declared in unison that the ravages of Hurricane Sandy prove that America needs bigger government.

We know liberals are worried that President Obama might lose next week, but are they so panicky that they want to suggest even before the storm has passed that Mitt Romney and Republicans are against disaster relief? Apparently so. It's an especially low-rent tactic, akin to blaming the tea party for Jared Lee Loughner's shooting of Gabby Giffords. But it's equally absurd to argue that a once-in-a-century storm means you can't block-grant Medicaid.

The rap on Mr. Romney seems to be that he once said emergency management could be done well and perhaps better at the state level, and he also endorsed Paul Ryan's House Republican budget.

Let's look at the record. Regarding the budget for FEMA (the Federal Emergency Management Agency), Mr. Obama's own fiscal 2013 budget sought $10.008 billion. That was a cut of $641.5 million, or 6.02%, from fiscal 2012. We couldn't find an apples-to-apples comparison in the Ryan budget resolution, because FEMA spending was part of a larger category and the Senate never did pass its budget. But if budget cuts to FEMA are the liberal standard, their beef is with Mr. Obama. By the way, Mr. Romney says he doesn't want to abolish FEMA.

None of which means that FEMA is above reform. Matt Mayer of the Heritage Foundation has found that annual FEMA disaster declarations have multiplied since the Clinton years and have reached a yearly average of 153 under Mr. Obama. That compares to 129.6 under George W. Bush, 89.5 under Mr. Clinton, and only 28 a year under Reagan. Mr. Mayer argues that taxpayers and storm victims would be better served if FEMA devoted itself to helping out in the biggest disasters, such as Sandy, and not dive in at every political request for assistance.

As for Mr. Romney and FEMA, the liberals are excavating remarks from one of the early GOP debates. CNN's John King asked if "the states should take on more" of a role in disaster relief as FEMA was running out of money.

Mr. Romney: "Absolutely. Every time you have an occasion to take something from the federal government and send it back to the states, that's the right direction. And if you can go even further and send it back to the private sector, that's even better.

"Instead of thinking in the federal budget, what we should cut—we should ask ourselves the opposite question. What should we keep? We should take all of what we're doing at the federal level and say, what are the things we're doing that we don't have to do? And those things we've got to stop doing, because we're borrowing $1.6 trillion more this year than we're taking in."

This isn't an argument for abolishing FEMA so much as it is for the traditional federalist view that the feds shouldn't supplant state action. As it happens, the response to Hurricane Sandy has been a model of such a division of responsibility.

Citizens in the Northeast aren't turning on their TVs, if they have electricity, to hear Mr. Obama opine about subway flooding. They're tuning in to hear Governor Chris Christie talk about the damage to the Jersey shore, Mayor Mike Bloomberg tell them when bus service might resume in New York City, and Connecticut Governor Dannel Malloy say when the state's highways might reopen.

Energetic governors and mayors are best equipped to handle disaster relief because they know their cities and neighborhoods far better than the feds ever will, and they know their citizens will hold them accountable. The feds can help with money and perhaps expertise.

The larger liberal fallacy here is that effective government requires bigger government. Americans expect a government, at whatever level, to do its core functions well. But the bigger and more costly the government, the more likely it is to do more things poorly.

The rush to use Hurricane Sandy to justify a bigger federal government makes us wonder if there's an excuse liberals won't use to grow Leviathan? The reality of the federal fisc is that whoever wins next Tuesday is going to have to choose between functions best done by the federal government and those that can be done better by others. A government that can't distinguish between a big storm and Big Bird is simply too big.


Hurricanes and Human Choice

Sandy was terrible, but we're currently in a relative hurricane 'drought.' Connecting energy policy and disasters makes little scientific sense

By Roger Pielke, professor of environmental studies at the University of Colorado.

Hurricane Sandy left in its path some impressive statistics. Its central pressure was the lowest ever recorded for a storm north of North Carolina, breaking a record set by the devastating "Long Island Express" hurricane of 1938. Along the East Coast, Sandy led to more than 50 deaths, left millions without power and caused an estimated $20 billion or more in damage.

But to call Sandy a harbinger of a "new normal," in which unprecedented weather events cause unprecedented destruction, would be wrong. This historic storm should remind us that planet Earth is a dangerous place, where extreme events are commonplace and disasters are to be expected. In the proper context, Sandy is less an example of how bad things can get than a reminder that they could be much worse.

In studying hurricanes, we can make rough comparisons over time by adjusting past losses to account for inflation and the growth of coastal communities. If Sandy causes $20 billion in damage (in 2012 dollars), it would rank as the 17th most damaging hurricane or tropical storm (out of 242) to hit the U.S. since 1900—a significant event, but not close to the top 10. The Great Miami Hurricane of 1926 tops the list (according to estimates by the catastrophe-insurance provider ICAT), as it would cause $180 billion in damage if it were to strike today. Hurricane Katrina ranks fourth at $85 billion.

To put things into even starker perspective, consider that from August 1954 through August 1955, the East Coast saw three different storms make landfall—Carol, Hazel and Diane—that in 2012 each would have caused about twice as much damage as Sandy.

While it's hardly mentioned in the media, the U.S. is currently in an extended and intense hurricane "drought." The last Category 3 or stronger storm to make landfall was Wilma in 2005. The more than seven years since then is the longest such span in over a century.

Flood damage has decreased as a proportion of the economy since reliable records were first kept by the National Weather Service in the 1930s, and there is no evidence of increasing extreme river floods. Historic tornado damage (adjusted for changing levels of development) has decreased since 1950, paralleling a dramatic reduction in casualties. Although the tragic impacts of tornadoes in 2011 (including 553 confirmed deaths) were comparable only to those of 1953 and 1964, such tornado impacts were far more common in the first half of the 20th century.

The United Nations Intergovernmental Panel on Climate Change reports that drought in America's central plains has decreased in recent decades. And even when extensive drought occurs, we fare better. For example, the widespread 2012 drought was about 10% as costly to the U.S. economy as the multiyear 1988-89 drought, indicating greater resiliency of American agriculture.

There is therefore reason to believe we are living in an extended period of relatively good fortune with respect to disasters. A recurrence of the 1908 San Francisco earthquake today, for example, could cause more than $300 billion in damage and thousands of lives, according to a study I co-published in 2009.

So how can today's disasters, even if less physically powerful than previous ones, have such staggering financial costs? One reason: There are more people and more wealth in harm's way. Partly this is due to local land-use policies, partly to incentives such as government-subsidized insurance, but mostly to the simple fact that people like being on the coast and near rivers.

Even so, with respect to disasters we really do make our own luck. The relatively low number of casualties caused by Sandy is a testament to the success story that is the U.S. National Weather Service and parallel efforts of those who emphasize preparedness and emergency response in the public and private sectors. Everyone in the disaster-management community deserves thanks; the mitigation of the impacts from natural disasters has been a true national success story of the past century.

But continued success isn't guaranteed. The bungled response and tragic consequences associated with Hurricane Katrina tell us what can happen when we let our guard down.

And there are indications that we are setting the stage for making future disasters worse. For instance, a U.S. polar-satellite program crucial to weather forecasting has been described by the administrator of the federal agency that oversees it—the National Oceanic and Atmospheric Administration—as a "dysfunctional program that had become a national embarrassment due to chronic management problems." The lack of effective presidential and congressional oversight of this program over more than a decade can be blamed on both Republicans and Democrats. The program's mishandling may mean a gap in satellite coverage and a possible degradation in forecasts.

Another danger: Public discussion of disasters risks being taken over by the climate lobby and its allies, who exploit every extreme event to argue for action on energy policy. In New York this week, Gov. Andrew Cuomo declared: "I think at this point it is undeniable but that we have a higher frequency of these extreme weather situations and we're going to have to deal with it." New York Mayor Michael Bloomberg spoke similarly.

Humans do affect the climate system, and it is indeed important to take action on energy policy—but to connect energy policy and disasters makes little scientific or policy sense. There are no signs that human-caused climate change has increased the toll of recent disasters, as even the most recent extreme-event report of the Intergovernmental Panel on Climate Change finds. And even under the assumptions of the IPCC, changes to energy policies wouldn't have a discernible impact on future disasters for the better part of a century or more.

The only strategies that will help us effectively prepare for future disasters are those that have succeeded in the past: strategic land use, structural protection, and effective forecasts, warnings and evacuations. That is the real lesson of Sandy.


Distorting the energy market

The government is hurting our ability to develop new sources of energy; and both the Republicans and Democrats are to blame.

In the most general terms, Republicans support continued tax breaks and subsidies for the oil and gas industry, and Democrats support grants, subsidies, and tax breaks for such new forms of energy as wind and solar. Neither party has a good energy policy. Both are blocking the path of innovation.

To create a fossil fuel alternative we must find an energy source that is cheaper, easier, and better than fossil fuel. But when government is picking which alternatives are worth pursuing, in addition to funding traditional energy sources, our view of what energy sources may work out becomes clouded. As long as government provides subsidies and tax loopholes to oil and gas

companies, they will hold an advantage in the market. Not only does government intervention in this manner make fossil fuels a highly lucrative industry, thus attracting many bright businesspeople, engineers, and scientists, but it makes the introduction of alternatives more difficult, since potential new competitors find working in an unbalanced market nearly impossible. Even if there were an energy alternative that consumers would want, the alternative would not be able to seize enough market share to turn a profit, because the coalition of government and big oil cannot be challenged by a newcomer.

With few exceptions, people agree we need to move away from burning fossil fuels if we want to meet future energy needs with as little disturbance to existing ecosystems as possible or beyond what we might consider desirable. And because oil and gas receive government benefits, the conventional thinking goes, so too should alternative energy exploration, in order to “level the playing field.” But what the best alternative might be is still unclear. One reason why it is unclear is that government involvement clouds the picture.

Think of ethanol. For years, because of Iowa's importance in the presidential nomination process, ethanol was highly subsidized by the government. Now we discover that it was not a workable, standalone alternative to fossil fuels. Consider all the resources that were misallocated because of this pursuit. Private resources, such as time and expertise, were focused on making ethanol work — in order to procure government money. If there had been no government money in ethanol research, engineers and scientists in the energy industry would have had a greater incentive to look elsewhere for a good alternative. But when the government creates a market there is no need to look elsewhere. The only problem is that the government lacks anything like a good record as a venture capitalist.

If it is true that necessity is the mother of invention, then the government is stripping us of that necessity. What is necessary for every company to operate is money, and if it doesn’t have a strong need for money, because government is supplying all it needs and then some, its incentive for invention is stripped away. If we want to find the best energy source, both long-term and short-term, the government needs to stop trying to control which sources come to market, or stay in the market.The government needs to divest itself of all financial interests in the energy industry.


Obama’s environmental policies extend to America’s oceans—and into the upcoming elections

By Rebekah Rast – You can definitely see a partisan line when it comes to environmental policies in this country.  One side thinks many related laws and regulations go too far; the other side thinks many of these laws don’t go far enough.

However, it seems this partisan line also stretches past the land of the U.S. and deep into its oceans.

In 2010, when President Obama passed his executive order “Stewardship of the Ocean, Our Coasts, and the Great Lakes,” he claimed it “strengthens ocean governance and coordination, establishes guiding principles for ocean management, and adopts a flexible framework for effective coastal and marine spatial planning to address conservation, economic activity, user conflict, and sustainable use of the ocean, our coasts and the Great Lakes.”

Not everyone agrees with his claim and now this oceans and lakes power play has sparked quite a partisan fight going into this election year.

Many Republicans see this Executive Order as nothing more than an absurd power grab by the Obama administration.  To control the country’s lakes, oceans and coastlands by issuing strict usage regulations and restrictions will only hurt such livelihoods as farming, fishing and logging.

Many Democrats and environmental allies see this as a positive step forward that will protect the nation’s oceans and also limit the number of conflicts over how the waters are used.

The Washington Post cites a recent study where Boston University biologist Les Kaufman was a contributor.  The study shows “that using ocean zoning to help design wind farms in Massachusetts Bay could prevent more than $1 million in losses to local fishery and whale-watching operators while allowing wind producers to reap $10 billion in added profits by placing the turbines in the best locations.”

Kaufman responds to the study saying, “The whole concept of national ocean policy is to maximize the benefit and minimize the damage. What’s not to love?”

Meanwhile, Florida Republican Rep. Steve Southerland II, who is in a tight reelection race, says this ocean policy was “like air traffic control helping coordinate an air invasion on our freedoms,” as quoted by the Washington Post.

Despite its lack of support from many Republican members of Congress, it is the process by which this policy was put into place—through Executive Order – that is most puzzling and troublesome to some.

In 2007, a similar bill was proposed in Congress, which at that time was controlled by Democrats in both chambers, called OCEANS-21.  It would have established a comprehensive National Oceans Policy, very similar to what the president is working on today.  The bill never became law.  In spite of having an overwhelming partisan Democrat majority in his first two years in office, Obama chose to ignore the will of Congress altogether, by mandating the policy into existence with a overly broad use of his powers to issue an Executive Order—involving only a small team of White House staff.

As Rep. Southerland compares this ocean policy to a rogue traffic control operation, all would agree that traffic control is a good operation to have.

However, it is not an uncommon practice of government, when it is given a little jurisdiction, to take much more.  This is exactly what concerns Rep. Doc Hastings (R-Wash.), the House Natural Resources Committee Chairman.  The Washington Post summarizes his thoughts as not being opposed to a national ocean policy, per se, but concerned about the administration’s vague and broad definition of what “ocean” means exactly.  If it includes runoff from land in its jurisdiction then it could open the door to regulating all inland activities, because “all water going downhill goes into the ocean…  That potential could be there,” Rep. Hastings said.

Out of concern for the thousands of American jobs that rely on America’s Great Lakes and oceans, the House voted in May to block the federal government from spending money on implementing the policy, though the amendment has not passed the Senate.

In an interview with Americans for Limited Government (ALG) earlier this year, Jim Donofrio, executive director of the Recreational Fishing Alliance, took Chairman Hastings’ comments even farther and said that this ocean policy is nothing more than private property theft.  “This is a government takeover of every piece of water that drains into the Atlantic, Pacific and Gulf of Mexico,” he says.  “This is taking state’s rights away, land rights and personal property rights.”

As this ocean policy becomes a more contentious battle for various campaigns it could also become one for voters whose livelihoods could very well be impacted as this policy moves forward.

Bill Wilson, president ALG, expressed outrage at the decision voters are facing, “Law abiding Americans should not be forced to choose between their livelihoods and following an Executive Order that has not passed Congress and is not being funded by Congress. This is the ultimate thug government mentality that has become all too prevalent with this Administration.”

Will voters decide on Nov. 6 that this administration’s environmental policies, land and sea, have gone too far? America will have its answer soon.


British Minister signals end of the wind farm: We can't pepper turbines across the country - enough is enough, declares energy minister

The relentless march of onshore wind farms is at an end, a minister declared last night.

Insisting ‘enough is enough’, John Hayes said turbines had been ‘peppered around the country’ with little or no regard for local opinion.  He said existing sites and those in the pipeline would be enough to meet green commitments with no need for more.  ‘Even if a minority of what’s in the system is built we are going to reach our 2020 target,’ he said. ‘I’m saying enough is enough.’

Mr Hayes told the Mail he had commissioned research on the impact of wind turbines on the landscape and whether they drive down house prices.

He has also asked scientists to examine noise complaints and more sinister suggestions that the turbines endanger military aircraft by blocking radar signals.

The intervention by Mr Hayes, who became energy minister in last month’s reshuffle, will delight 100-plus fellow Tory MPs who have urged David Cameron to take a more sceptical approach to onshore wind power.  It does however risk a clash with the Liberal Democrats, who are enthusiastic advocates of renewable energy.

Mr Hayes suggested the controversy over turbines was giving other sources of renewable power – such as offshore wind, solar and tidal power – a bad name.

‘The onshore wind debate is skewing the whole debate, which is not good for the Government, not good for people and not good for the renewables lobby,’he told the Mail.

‘We can no longer have wind turbines imposed on communities. I can’t single-handedly build a new Jerusalem but I can protect our green and pleasant land.

‘Firstly, I have asked the planning minister to look again at the relationship between these turbines and the landscape.  ‘It seems extraordinary to have allowed them to be peppered around the country without due regard for the interests of the local community or their wishes.

‘We have issued a call for evidence on wind. That is about cost but also about community buy-in. We need to understand communities’ genuine desires.’

Mr Hayes said policy should not be based on some ‘bourgeois left article of faith’.  ‘These things are about the people and I am the people’s minister,’ he added.  ‘I want to look at a broader analysis of the effects – I mean house price values, and other quality of life issues. I want to look particularly at noise, so I have asked the Institute of Acoustics to look at the noise issue from a completely independent perspective.

‘There is a case where people had to move from their family farm because of noise. It is very often the case that local authorities don’t have the wherewithal to address these planning issues.’

Mr Hayes said defence ministers had agreed to investigate claims of radar interference from the spinning blades.

The Government has set a target of increasing the amount of power generated by onshore wind farms to 13 gigawatts by 2020.

But in an indication of a shift in Government policy, ministers announced this summer that the subsidy for onshore wind power generation would be cut by 10 per cent this year.

Approvals for onshore wind farms – around 3,800 turbines are in operation – have however reached record levels, according to figures published yesterday.

RenewableUK, the wind industry trade body, said in a statement: ‘For the first time in five years, the UK is seeing a rise in the amount of UK capacity approved at a local level.’
Controversial: The Energy Minister said onshore wind farms are turning people against other sources of renewable energy such as offshore alternatives and solar power

There was a 15 per cent increase in approval rates for smaller onshore projects with capacity of less than 50 megawatts last year compared with the previous year, it said.

Applications for new wind farms have to be made to councils, and around a half are refused. But under the existing system, energy companies often win on appeal to the planning inspectorate.

Campaigners took heart from a court ruling in May, in which villagers in Hemsby, on the edge of the Norfolk Broads, succeeded in blocking four 350ft turbines after a judge agreed their right to preserve their landscape was more important than renewable energy targets.

Tory MP Chris Heaton Harris, who has led calls for a rethink on wind power, said of Mr Hayes’s remarks: ‘This is a huge step forward. These awful turbines do nothing for the environment – they barely reduce CO2 – they force up energy bills and put more people into fuel poverty.

‘It’s about time the Government listened in this way. Communities will be delighted that they may now be spared the torment they have seen others go through when turbines go up.’

Former Conservative Chancellor Lord Lawson, an arch-sceptic on climate change, said: ‘I would welcome the minister’s statements. I would hope they would translate into a moratorium. An additional problem is that wind power is one of the most expensive forms of generating electricity there is.

‘At a time when there is so much concern both from households and industry about the cost of energy, that too should be a decisive argument against going this way.’


Decency demands an end to all ethanol fuel requirements now

Last year six million children starved to death around the world — again.  On top of this, reports that 925 million people went hungry in 2010 worldwide.

Anyone who has watched television late at night has seen the commercials for charity organizations showing starving and malnourished children struggling to survive another day in a plea for money to help alleviate their plight.

Incredibly at the same time that millions of children are dying from malnutrition worldwide, the U.S. government in its war on fossil fuels has continued to push and promote the growing and burning of potential life-saving corn in our gas tanks.  When we pull up to the gas pump and see that the gas has been mixed with up to fifteen percent ethanol, that is corn converted to fuel for your car.

This federal government mandate for ethanol use is now coming under fire as politicians react to the rising corn prices resulting from this summer’s drought that wiped out one sixth of our nation’s corn crop.  Governors of seven states have already requested that the federal government’s Environmental Protection Agency (EPA) waive the ethanol mandate as the production of vehicle fuel consumes more and more of the corn crop at the expense of livestock and the hungry around the world.

As a recent commentary by Tim Worstall in Forbes points out, “In normal times, it’s said that up to 40 percent of the U.S. corn crop is converted into ethanol which is then fed into cars. When the crop slumps this proportion is likely to rise. For a drought and a shortage of corn is not going to do much to change driving habits. But still, despite that shortage of corn the gasoline allowable for sale has to be blended with ethanol.”

The insanity of our federal government continuing to demand that corn be turned into fuel is brought home even more directly when you consider that the head of the United Nation’s Food and Agriculture Organization argued that it is lifting the grain price worldwide even before the drought.   These price rises are particularly impactful in areas that depend upon grains for basic survival.

All courtesy of a big, all knowing U.S. government that for the past three decades has chosen to promote the burning of corn as a bio-fuel solution to our energy needs at a cost of $45 billion over the last 30 years.  In 2011 alone corn ethanol subsidies ate up $6 billion in taxpayer dollars.

Contrast this with Brazil, where it wasn’t the government which drove the bio-fuel industry, it was the private sector.  With abundant sugar cane to easily turn into bio-fuel, Brazilians drive flex fuel vehicles that burn both traditional oil or sugarcane ethanol.

Why did this occur in Brazil, but not in the United States?

First and foremost, sugar cane grows in abundance in Brazil, making it a readily available bio-fuel crop.

However, U.S. farmers grow energy sugar beets which the North Dakota Renewable Energy Council claims have the “power to produce double the amount of ethanol in one acre when compared to corn.”

Also, in contrast to either sugarcane or beets, corn is a starch which must be converted to sugar in order to become a bio-fuel.  Sugarcane or beets don’t need to undergo this process making it a much more efficient production process.  One study showed that in 2005 the cost of sugarcane ethanol in Brazil was 39 percent lower than for corn ethanol in the United States.

Add to this the fact that sugarcane yields between 600-750 gallons of ethanol compared to 400 gallons for corn, and it is not hard to see why corn makes a great food for both humans and livestock, but is a disastrously inefficient fuel.

And that is what government typically creates through attempts to intervene in markets.  Until this past year, tariffs on sugarcane ethanol combined with U.S. taxpayer subsidies for its production largely locked the import of the Brazilian bio-fuel out of the U.S. market.  Now, even with the tariffs dropped, Brazil is dealing with its own bureaucratic bungling and high taxes that are strangling ethanol production making any immediate impact of Brazilian sugarcane ethanol on the U.S. market unlikely.

As an increasing amount of U.S. corn is being used to meet government mandated rising ethanol demand, the United States — the world’s dominant producer and exporter of corn — is exporting less — increasing the likelihood of an international food crisis.

To avert this potential catastrophe, the Obama Administration should immediately rescind all ethanol fuel requirements, and Congress should deny any funding for government programs that pick winners and losers in alternative fuels production.

It is truly a sad legacy that after thirty years and 45 billion dollars, the only thing that has really been gained through the corn ethanol experiment are hundreds of millions of hungry people around the world, and the retardation in the development of alternative, more efficient, domestically grown bio-fuels.




Preserving the graphics:  Graphics hotlinked to this site sometimes have only a short life and if I host graphics with blogspot, the graphics sometimes get shrunk down to illegibility.  From January 2011 on, therefore, I have posted a monthly copy of everything on this blog to a separate site where I can host text and graphics together -- which should make the graphics available even if they are no longer coming up on this site.  See  here and here


No comments: