Saturday, July 30, 2016

If the IKEA units were as safe as an average vehicle they would have caused 67,000 deaths, not six

See Wasting Resources in the Name of Protection. Letter to the editor of the WSJ by
"The July 22 letter from Nancy A. Cowles and Rachel Weintraub regarding an IKEA furniture recall shows the authors disturbingly unable to grasp the meaning of numbers. Numeracy is crucial to evaluating risk and danger—and that level of ignorance from two apparent professionals in consumer product safety is frightening.

Twenty-nine million IKEA units caused six child deaths over 27 years. If a single-unit recall costs a modest $25, that means $725 million is required upfront to prevent six deaths over the next 27 years (at 5% a year, a final cost of $450 million per death). That is surreal waste (if not to class-action lawyers). The authors assert, inanely: “the ‘millions were sold and only six children died’ argument is specious.” No, to the educated it is called “rational.” If the IKEA units were as safe as an average vehicle they would have caused 67,000 deaths, not six. As it is, a unit’s owner would wait on average 130 million years before a child death. Yet the Consumer Product Safety Commission director urged owners to respond quickly.

For decades the Journal has exposed frivolous tort litigation and warned about its consequences. Innumeracy, like junk science, is often crucial to such claims."

Andrew K. Gabriel, Ph.D.
South Pasadena, Calif."

Make America Grow Again:The economy is stuck on 1% growth as business investment stalls

From a WSJ editorial. Excerpts:
"since last September the economy has pumped the brakes from the 2.2% average from 2012-2015 into a near-stall speed of about 1%. Seven years after the recession ended, President Obama on Wednesday took credit for an economy that he called “stronger and more prosperous than it was when we started.”"

"The President didn’t mention that the current recovery, the one on his watch that began in June 2009, is easily the weakest since World War II."

"business investment fell at a 2.2% pace[in the 2nd quarter], and companies ran down inventories for the fifth consecutive quarter." 

"The investment plunge is a signal that business is on strike, or at least depressed by uncertainty. Most CEOs will be risk-averse and conservative with their balance sheets until they see signs of a growth rebound, even though they’re sitting atop piles of cash and the cost of capital is at all-time lows. They will also hold off investing until they have a better sense of the future tax and regulatory burdens they are likely to face next year.

They can’t be re-assured by what they heard in Philadelphia, where the Obama-Clinton Democrats promised more of the policies that have stifled growth the last eight years. “Wall Street, corporations and the super-rich are going to start paying their fair share of taxes,” Hillary Clinton declared.

Start? The richest 1% already pay about 38% of federal income tax revenue. And perhaps Mrs. Clinton will disclose which sage economic advisers have told her that raising taxes on business will yield more business investment. We were taught that if you tax something you get less of it. Mr. Obama’s unprecedented wave of regulatory costs is another main reason business isn’t investing. Yet Mrs. Clinton promised more costly rules on finance, health care, drug prices, mandated wages and benefits, and more."

Free tuition for most families could exacerbate existing inequalities and further stratify higher education

See Notable & Quotable: The ‘Free College’ Cascade from the WSJ.
"From “How Clinton’s ‘Free College’ Could Cause a Cascade of Problems,” July 27 in the Chronicle of Higher Education:
 
The first in line for harm, most experts agree, would be the private colleges. . . .


“You’re going to see a combination of dropping enrollments and skyrocketing tuition discounting,” [ Kent John Chabotar, a former president of Guilford College] says, “killing off the weaker, private, unendowed colleges.” The migration to public institutions wouldn’t have to be universal to be devastating, he says. Some institutions would have difficulty absorbing even a 5- to 10-percent drop in enrollment. . . .

So let’s say that migration happens, and a new crop of students chooses public institutions over the privates. Good news for the publics, right? Maybe not. It’s unclear that regional publics and community colleges have enough capacity. . . .

“Do we really think in this fiscal environment, if a state makes higher education free, they’ll increase funding that much?” [ Donald Hossler, a scholar at the USC Rossier School of Education] asks. Colleges, he says, would soon be expected to educate more people with fewer resources per student. The quality of public education could erode. . . .

In fact, some experts worry that free tuition for most families could exacerbate existing inequalities and further stratify higher education. While poor students would attend crowded, lower-tier public colleges at no cost, affluent students could buy their way into elite colleges—public or private—where they might get a different kind of education from everyone else."

Friday, July 29, 2016

As Corn Devours U.S. Prairies, Greens Reconsider Biofuel Mandate

By Jennifer A Dlouhy of Bloomberg. Excerpt:
"Environmentalists who once championed biofuels as a way to cut pollution are now turning against a U.S. program that puts renewable fuels in cars, citing higher-than-expected carbon dioxide emissions and reduced wildlife habitat.

More than a decade after conservationists helped persuade Congress to require adding corn-based ethanol and other biofuels to gasoline, some groups regret the resulting agricultural runoff in waterways and conversion of prairies to cropland -- improving the odds that lawmakers might seek changes to the program next year.

"The big green groups that got invested in biofuels are tacitly realizing the blunder," said John DeCicco, a research professor at the University of Michigan Energy Institute who previously focused on automotive strategies at the Environmental Defense Fund. "It’s really hard for the people who really -- shall we say -- hate oil viscerally, to think that this alternative that we’ve been promoting is today worse than oil."

The green backlash could give a boost to long-stalled congressional efforts to overhaul the Renewable Fuel Standard, including proposals to limit the amount of traditional, corn-based ethanol that counts toward the mandate, as environmentalists side with anti-hunger groups and even the oil industry in calling for change. The RFS forces refiners to blend steadily escalating amounts of biofuel into the gas supply. Most of the mandate is currently fulfilled by corn-based ethanol, which makes up nearly 10 percent of U.S. gasoline and provides oxygen that helps the fuel burn cleaner.

Broken Promise

The Natural Resources Defense Council used a 96-page report in 2004 to proclaim boundless biofuel benefits: slashed global warming emissions, improved air quality and more wildlife habitat.

Instead, farmers plowed millions of acres of prairie grasses to grow corn for making ethanol, with fertilizer runoff contributing to a dead zone in the Gulf of Mexico. Scientists warned that carbon dioxide emissions associated with corn-based ethanol were higher than expected. And alternatives using switchgrass, algae and other non-edible plant materials have been slow to penetrate the market.

"The ethanol policy was sold to environmentalists as something that was going to clean up the environment, and it’s done anything but," said Democratic Representative Peter Welch of Vermont, who is co-sponsoring legislation to revamp the RFS. "It’s truly been a flop. The environmental promise has been transformed into an environmental detriment."

‘Unintended Consequences’

The Environmental Working Group, Clean Air Task Force and Friends of the Earth argue that the program has propelled corn-based ethanol without delivering a similar boost to advanced biofuels with potentially bigger climate benefits.

Collin O’Mara, president of the National Wildlife Federation, told a House committee last month that the RFS program, created with "good intentions," has instead wreaked "severe, unintended consequences," including the loss of prairie land and water-supply damage that threatens wildlife.
Even the NRDC that once lobbied for the RFS bemoans that "the bulk of today’s conventional corn ethanol carries grave risks to the climate, wildlife, waterways and food security." In NRDC’s "OnEarth" magazine, an essay headlined "Played for a Fuel" argues that corn-based ethanol isn’t sustainable because it requires "huge amounts" of water, fertilizer and land.

NRDC spokesman Ed Chen said the group continues to monitor the RFS "because low-carbon cellulosic biofuels can play an important role in reducing transportation pollution,” but added that the organization is “far more focused” on other carbon-cutting strategies with more immediate climate payoffs."

Are Libertarians Anti-Government?

By David Boaz in 1998.
"For the past several years, especially since the Oklahoma City bombing, the national media have focused a lot of attention on “anti-government” extremists. Libertarians, who are critical of a great deal that government does, have unfortunately but perhaps understandably been tossed into the “anti-government” camp by many journalists.

There are two problems with this identification. The first and most obvious is that many of the so-called anti-government groups are racist or violent or both, and being identified with them verges on libel.

The second and ultimately more important problem is that libertarians are not, in any serious sense, “anti-government.” It’s understandable that journalists might refer to people who often criticize both incumbent officeholders and government programs as “anti-government,” but the term is misleading.

A government is a set of institutions through which we adjudicate our disputes, defend our rights, and provide for certain common needs. It derives its authority, at some level and in some way, from the consent of the governed.

Libertarians want people to be able to live peacefully together in civil society. Cooperation is better than coercion. Peaceful coexistence and voluntary cooperation require an institution to protect us from outside threats, deter or punish criminals, and settle the disputes that will inevitably arise among neighbors— a government, in short. Thus, to criticize a wide range of the activities undertaken by federal and state governments—from Social Security to drug prohibition to out-of-control taxation—is not to be “anti-government.” It is simply to insist that what we want is a limited government that attends to its necessary and proper functions.

But if libertarians are not “anti-government,” then how do we describe the kind of government that libertarians support? One formulation found in the media is that “libertarians support weak government.” That has a certain appeal. But consider a prominent case of “weak government.”

Numerous reports have told us recently about the weakness of the Russian government. Not only does it have trouble raising taxes and paying its still numerous employees, it has trouble deterring or punishing criminals. It is in fact too weak to carry out its legitimate functions. The Russian government is a failure on two counts: it is massive, clumsy, overextended, and virtually unconstrained in scope, yet too weak to perform its essential job. (Residents of many American cities may find that description a bit too close for comfort.)

Not “weak government,” then. How about “small government”? Lots of people, including many libertarians, like that phrase to describe libertarian views. And it has a certain plausibility. We rail against “big government,” so we must prefer small government, or “less government.” Of course, we wouldn’t want a government too small to deter military threats or apprehend criminals. And Washington Post columnist E. J. Dionne, Jr., offers us this comparison: “a dictatorship in which the government provides no social security, health, welfare or pension programs of any kind” and “levies relatively low taxes that go almost entirely toward the support of large military and secret police forces that regularly kill or jail people for their political or religious views” or “a democracy with open elections and full freedom of speech and religion [which] levies higher taxes than the dictatorship to support an extensive welfare state.”

“The first country might technically have a ‘smaller government,’” Dionne writes, “but it undoubtedly is not a free society. The second country would have a ‘bigger government,’ but it is indeed a free society.”

Now there are several problems with this comparison, not least Dionne’s apparent view that high taxes don’t limit the freedom of those forced to pay them. But our concern here is the term “smaller government.” Measured as a percentage of GDP or by the number of employees, the second government may well be larger than the first. Measured by its power and control over individuals and society, however, the first government is doubtless larger. Thus, as long as the term is properly understood, it’s reasonable for libertarians to endorse “smaller government.” But Dionne’s criticism should remind us that the term may not be well understood.

So if we’re not anti-government, and not really for weak or small government, how should we describe the libertarian position? To answer that question, we need to go back to the Declaration of Independence and the Constitution. Libertarians generally support a government formed by the consent of the governed and designed to achieve certain limited purposes. Both the form of government and the limits on its powers should be specified in a constitution, and the challenge in any society is to keep government constrained and limited so that individuals can prosper and solve problems in a free and civil society.

Thus libertarians are not “anti-government.” Libertarians support limited, constitutional government—limited not just in size but, of far greater importance, in the scope of its powers."

Thursday, July 28, 2016

Nordic Socialism Isn't the Answer for America

By Nima Sanandaji writing for FEE. Nima Sanandaji is a research fellow at CPS,  and the author of Scandinavian Unexceptionalism available from the Institute of Economic Affairs. Excerpts:
"Will Americans benefit from longer life spans and lower poverty if they adapt Nordic-style welfare models? According to Bernie Sanders, Democrat activists, left-of center intellectuals, and journalists, the answer seems to be yes. However, as I show in my new book Debunking Utopia – Exposing they myth of Nordic socialism, much of this is built upon misconceptions about Nordic societies:
  • Yes, it is true that Nordic societies combine high living standards with large welfare states. However, numerous studies show that the high tax systems significantly impede the living standard in these countries. Nordic countries compensate for large public sectors by having strong working ethics and adapting market-friendly reforms in other fields. The lesson for America certainly isn’t that higher taxes will create more prosperity, but rather the opposite.
  • Nordic societies did not become successful after introducing large welfare states. They were economically and socially uniquely successful already in the mid-20th century, when they combined low taxes and small welfare states with free-market systems.
  • The root of the high levels of equality, the economic prosperity, the high levels of trust and other advantageous social features of the Nordics seem to be a unique culture rather than unique policies. After all, Spain, Italy, and France also have large welfare states, built upon the ideals of democratic socialism. Why doesn’t the American left believe that US society would evolve to resemble Southern Europe after introducing a large welfare state?
  • Over time, the generous welfare states of Nordic nations have created massive welfare dependency, gradually eroding the strong norms of responsibility that undermine the region's success. This, combined with the growth-reducing effects of a large state, explains why Nordic countries have gradually, over the past decades, moved towards less-generous welfare, market reforms, and tax cuts.
  • The combination of open borders, high taxes, and generous welfare systems has been anything but a success in Sweden. The open-border policies that Sweden experimented with in 2015 lead to a massive influx of new arrivals, who are finding it very difficult to integrate in the country. The result is massive social tension and increasing poverty. Countries such as the US, Canada, Australia, New Zealand, and even the UK are much better at integrating the foreign-born in their labor markets.
Lastly, while the idea of Nordic-style democratic socialism is all the rage among the left in the US and other countries, in the Nordic countries themselves social democracy has never been weaker than today. In Denmark, the social democrats themselves have introduced massive market reforms and called for a much slimmer welfare state. In Sweden, the only one of the Nordic countries to currently be led by a center-left government, the Social Democrats are polling their lowest support in modern times."

Lack of exercise costs world $67.5B and 5M lives a year

From Fox News.
"A study of one million people has found that physical inactivity costs the global economy $67.5 billion a year in healthcare and productivity losses, but an hour a day of exercise could eliminate most of that.

Sedentary lifestyles are linked to increased risks of heart disease, diabetes and cancer, researchers found, but activity - such as brisk walking - could counter the higher likelihood of early death linked with sitting for eight or more hours a day.

Such inactivity is estimated to cause more than 5 million deaths a year - almost as many as smoking, which the World Health Organization (WHO) says kills 6 million a year.

Giving details of their findings at a briefing in London, the international team of researchers warned there has been too little progress in tackling a "pandemic of physical inactivity".

Ulf Ekelund, a professor at the Norwegian School of Sports Sciences and Cambridge University, said that WHO recommendations for at least 150 minutes of moderate exercise a week was probably not enough. A quarter of adults worldwide do not meet even the WHO's recommendations.

"You don't need to do sport or go to the gym ... but you do need to do at least one hour a day," he said, giving walking at 5.6 km an hour (km/h) or cycling at 16 km/h as examples of what was needed.
People who sat for eight hours a day but were otherwise active had a lower risk of premature death than people who spent fewer hours sitting but were also less active, suggesting that exercise is particularly important, no matter how many hours a day are spent sitting.

The greatest risk of premature death was for people who sat for long periods of time and did not exercise, according to the findings, published in The Lancet on Wednesday.

In another of the series of four studies, researchers estimated healthcare costs and productivity losses for five major diseases linked to lack of exercise - heart disease, stroke, diabetes, breast cancer and colon cancer - cost $67.5 billion globally in 2013.

Melody Ding of the University of Sydney, who led this part of the research, said the costs occur largely in wealthier countries, but as poorer countries develop, so too will the economic burden of chronic diseases linked to inactivity."