Who Rules America?

In America we are promised government “by the people, of the people, and for the people,” but an academic study released last year found that public opinion has virtually no influence on government policy. Instead, America is ruled by economic and political elites. Call them America’s Ruling Class.

“The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence.”

Researchers concluded that U.S. government policies rarely align with the preferences of the majority of Americans, but do favour special interests and lobbying organizations: “When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favour policy change, they generally do not get it.”

A vivid illustration of this study’s conclusions was just provided by the United States Senate. In an extraordinary Sunday session, the Senate’s Republican leadership engineered passage of a pork-laden highway bill which also included an amendment to revive the recently-expired Export-Import Bank. The Export-Import Bank is a corrupt institution that exists for the purpose of providing corporate welfare. Specifically, Ex-Im uses taxpayer money to subsidize loans to the export customers of American corporations. Our local TV news described Ex-Im in the most benign terms as just some institution that “helps American companies export their goods.”

Well, anybody can export goods. Somebody in Milan used Ebay recently to export some DVDs to us. But nobody on Ebay or any small company is helped by Ex-Im. The beneficiaries of Ex-Im’s largess include only giant corporations like Boeing. In fact, Boeing in particular soaks up such a large proportion of Ex-Im lending that the institution is sometimes referred to as “Boeing’s Bank.”

Now, the Senate at the moment is run by the Republicans, following the sweeping GOP electoral victory of just eight months ago. One might therefore reasonably expect that the Senate’s priorities might bear some resemblance to those of rank-and-file GOP voters. Yet this weekend’s Senate activity revealed no such concurrence.

One amendment on Sunday was brought forward to end federal subsidies to the abortion industry. Another amendment proposed to repeal Obamacare. Those are two positions that command widespread support, at least among GOP voters. But the Senate leadership would not even allow a vote on those two amendments for fear that attaching them to the highway bill would cause the bill to fail. Hence the Republican Senate chose to reject two policies with considerable popular support in order to protect highway pork and the Export-Import Bank–two measures that almost nobody cares about. Who exactly are these guys working for?

Well, for some insight on the answer to that question, consider the activities this very same weekend of a prominent presidential candidate. Jeb Bush attended a get together with his real constituency, and it wasn’t our local libertarian book club.

Behind a garden modeled on Monet’s, Jeb Bush addressed a lawn-full of chief executives and hedge-fund managers at an East Hampton, New York, estate Saturday morning. While the candidate is no stranger to courting wealthy donors, this time was different: about half the attendees were Democrats.

“This guy sells well,” said Kenneth Lipper, the money manager and registered Democrat who hosted the event, after Bush left. Virtually the only one who left without writing a check, Lipper said, was a buck deer that wandered past the group assembled on the wooded grounds.

[…]

The race for money adds to the importance of places like the Hamptons, Wall Street’s oceanside playground, where Lipper remarked that it’s become fashionable to spend more than $100 million on a vacation home. The entire annual income for the median U.S. household—$50,000—wouldn’t cover more than 900 of the summer rentals here listed on one brokerage’s website.

After answering questions for an hour at Lipper’s event, Bush left for two more gatherings at a pair of mansions near the beach.

[…]

Bush’s schedule took him to the six-bedroom beachside mansion of Clifford Sobel, a former ambassador and entrepreneur, who served crab cakes and bruschetta. Then there were cocktails at the home of Emil Henry, a former Treasury official and now the CEO of an infrastructure fund.

The Bush campaign wouldn’t comment on the events or say how much was raised, but Lipper said his event alone raised about $230,000.

Over a salad on the deck at the South Fork Country Club prior to attending two of the fundraisers, Sabin said donors appreciate the way Bush’s staff keeps in touch.

“We get a rundown every week—they’re very transparent,” said Sabin…

Indeed. This all appears very transparent to us as well.

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A’s Fan Sues MLB Over Seating Unprotected From Foul Balls

From the Belmont Patch:

An Oakland A’s fan, saying that she fears for her family’s safety, has sued Major League Baseball in federal court in Oakland in a bid to force the organization to require more safety netting to protect spectators from foul balls and shards of broken bats.

The lawsuit was filed in U.S. District Court on Monday by Gail Payne of Oakland, described in the suit as a “devout fan” of the A’s who has season tickets at the Coliseum in an area along the first-base line that is not protected by nets.

Payne says in the lawsuit that she hasn’t been hit by a foul ball, but “is constantly ducking and weaving to avoid getting hit by foul balls and shattered bats” and fears for the safety of herself, her husband and their daughter. The lawsuit seeks to be certified by a judge as a class action on behalf of all MLB spectators who have season tickets for seats located in an unprotected area between home plate and the right and left foul poles.

The lawsuit estimates the class would number in the hundreds.

It asks for an injunction requiring the MLB to mandate that all major and minor league ballparks must extend protective netting from foul pole to foul pole by the beginning of the 2016-2017 season.

About 1,750 spectators are injured at MLB games each year, according to the lawsuit, which names New York-based MLB and Commissioner Rob Manfred as defendants.

The suit says the risk of injury to spectators has increased in recent years because of greater velocity of pitches, the use of maple bats that break into shrapnel-like pieces when shattered, and distractions from electronic devices.

Hmm, Ms. Payne, on every level this is what’s sick and sad about some Americans today: THEY WILL NOT TAKE RESPONSIBILITY FOR THEMSELVES!!! You take a risk of having to deal with balls flying at 100 MPH in all directions when you enter a ballpark. Life is very risky.  Everyone is going to die.  Almost everyone will come down with cancer or heart disease or some other terminal illness.  Over 30,000 people a year in the US alone will die in an auto crash. Driving to the game is FAR more risky than getting hit with a foul ball. Our advice is to watch out for foul balls and get off your phone! Nobody has a right to baseball tickets. If you’re afraid to go to games, then don’t go instead of trying to ruin it for fans that bring their gloves in hopes of catching a foul ball.

Self-Defense is a Human Right

From USA Today:

President Obama says the biggest frustration of his tenure is the lack of new gun control laws.

The one area “where I feel that I’ve been most frustrated and most stymied” is the fact that the United States “is the one advanced nation on earth in which we do not have sufficient common-sense, gun safety laws,” Obama told the BBC in an interview.

Let’s be clear. Any president who is more concerned with me having a gun than with Iran having nuclear weapons is unfit for office.

Note also that this shyster didn’t bring up gun control in either of his presidential campaigns. Guess he was hoping to get elected without alerting the public to his true intentions. A real paragon of transparency and democratic virtue, this guy.

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The Animals in Gotham

It’s a little surprising that cats can cause so much trouble:

A runaway kitty caused rush-hour subway delays of up to 40 minutes for 10,000 commuters when he broke free from his owner’s grip and jumped onto a downtown station’s tracks, officials said. A total of 83 trains were stopped or rerouted along five lines while MTA workers and cops scrambled to get the black kitten out of harm’s way on Wednesday evening.

Whereas an alligator is just able to blend in with commuters walking the streets:

NEW YORK (AP) — An alligator that was caught crossing a New York City street during rush hour has died unexpectedly. A spokesman for Animal Care and Control of NYC says the 3-foot alligator died Friday morning. Police officers had discovered the creature crossing Ninth Avenue in Manhattan’s Inwood neighborhood Thursday evening.

Yet Another Bad Labor Regulation

As cities across the country propose jacking up minimum wages to $15 an hour, ostensibly to eliminate poverty, but perhaps moreso to keep their communities gentrified by pricing low-skilled workers out of the market, the Obama Administration recently imposed yet another wealth-destroying regulation on the labor market. Up until recently, salaried workers earning more than $23,660 were exempt from the rule that requires extra pay for overtime work. Obama just increased that threshold to $50,440.

People who don’t know how to do economic analysis see this change as having the desirable effect of increasing pay for workers earning between $23,660 and $50,440. But to borrow a term from economist Thomas Sowell, that is just the ‘stage one’ effect of the policy. Looking beyond stage one reveals a number of ‘unintended’ effects of the policy.

  • Employers will keep some employees exempt by boosting their pay above the $50,440 threshold, but recoup that extra pay by cutting employee benefits.
  • Other employees will be converted from salaried to non-exempt hourly workers, but with the hourly wage cut to offset the additional overtime pay.
  • Some of the converted hourly workers, however, will see no overtime as their hours will be limited to 38 per week. This group ends up unambiguously worse off as some of their hours are transferred to new part-time workers.

Economist Doug Holtz-Eakin relates the results of a simulation by Oxford Economics that was intended to predict the effects of an increase in the weekly threshold to $984, very close to the Obama Administration’s chosen threshold of $970. Here’s what Oxford Economics predicted.

For some workers to remain exempt, employers would raise their pay by an average $1,800, only to have their benefits cut by the same amount. Other workers would be converted to non-exempt hourly employees and would receive an average additional $11,700 per year in overtime. That seems great except their base hourly pay rate would be sliced by the same amount, leaving them no better off. Finally, some unlucky workers will move from salaried to hourly and see their hours fall to 38 per week. As a result, this group would lose about $2.73 billion total. To make up for the lost hours, employers would hire part-time workers.

Another effect of the policy will be to decrease the number of available lower and mid-level management positions that pay between $23,660 and $50,440. Their responsibilities will to some extent be taken up by more senior managers, making considerably more than $50,440. There will therefore be more jobs and pay for senior and high-ranking managers, thus potentially increasing inequality in the workplace. Why does the Obama Administration want to create more inequality?

Moreover, working long hours in lower-level management is how a lot of salaried employees work their way up to higher-level management positions. The new overtime rule threatens to foreclose that opportunity for many people.

If we take a look at Southern Europe–Spain, Italy, and Greece–a major reason for their economic struggles is lack of freedom in labor markets. The markets are hamstrung by innumerable laws and regulations governing employment. All of those regulations were enacted to ostensibly improve pay and security for workers, but the result is that labor markets become dysfunctional. And so, as just one appalling result, youth unemployment rates hover around 50%. The only way young Spanish workers can find jobs is by going to the UK, where labor markets are relatively freer.

Obama’s new rule won’t by itself make U.S. labor markets dysfunctional, but it’s part of a disturbing trend of increasing intervention in labor markets, including dramatically higher minimum wages, and onerous employer mandates such as Obamacare. If this keeps up, a lot of young people and other fools will be wondering where all the jobs and opportunities went.

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Technology is Rewilding the Environment

A huge and growing ‘sustainability’ movement obsesses over man’s use of natural resources. Oddly, this movement has grown despite the fact that resource use in advanced nations during recent decades has been leveling off or even declining. In a superb article at The Breakthrough Institute, Jesse H. Ausubel shows that the trend in diminishing resource use is driven by technology, and that the trend appears in most major resources, including timber, farmland, energy, and water.

[B]y about 1970 a great reversal had begun in America’s use of resources. Contrary to the expectations of many professors and preachers, America began to spare more resources for the rest of nature — first relatively, and then more recently in absolute amounts. A series of “decouplings” is occurring, so that our economy no longer advances in tandem with exploitation of land, forests, water, and minerals. American use of almost everything except information seems to be peaking. This is not because the resources are exhausted, but because consumers have changed consumption, and because producers changed production. These changes in behavior and technology are today liberating the environment.

In particular, improvements in agricultural productivity have freed millions of acres of farmland to be reclaimed by forests. Thus technology has obviated the famous concern of Teddy Roosevelt and the conservation movement of the early 20th century that the forests would disappear unless preserved in government-managed state and national parks.

[A]round 1900,…states such as Connecticut had almost no forest…. The thick green cover of New England, Pennsylvania, and New York today would be unrecognizable to Teddy Roosevelt, who knew them as wheat fields, pastures mown by sheep, and hillsides denuded by logging.

People often view technology as something that creates an artificial world, and thus alienates man from nature. To the contrary, however, technology is enabling a rewilding of the land, and bringing humans into contact with wildlife in ways that haven’t been experienced in more than 100 years.

Fox experts now estimate that about 10,000 foxes roam the city of London, more than the double-decker buses. Foxes ride the London Underground for free. The mayor of London, Boris Johnson, became enraged when his cat appeared to be mauled by a fox, and perhaps because of the fare-beating too. English snipers charge $120 to shoot a fox in your city garden. Meanwhile in rural England, badgers are causing an uncivil war between farmers and animal protection groups….

[T]he incipient rewilding of Europe and the United States is thrilling. Salmon have returned to the Seine and Rhine, lynx to several countries, and wolves to Italy. Reindeer herds have rebounded in Scandinavia. In Eastern Europe, bison have multiplied in Poland. The French film producer Jacques Perrin, who made the films Winged Migration about birds and Microcosmos about insects, is working on a film about rewilding. The new film, The Seasons, scheduled for release later this year, will open millions of eyes to Europe’s rewilding.

The image of a humpback whale in New York Bight with the Empire State Building in the background was the most significant environmental image of 2014. Humpback whales and other cetaceans, perhaps even blue whales, are returning in large numbers to New York Bight. Recall the whale despair of the 1970s and consider that the Bronx Zoo has just announced a program together with the Woods Hole Oceanographic Institution to monitor whale numbers and movements in sight of New York City. Many decades without hunting, and improved Hudson River water quality, have made a difference.

Whether into the woods or sea, the way is clear, the light is good, and the time is now. A large, prosperous, innovative humanity, producing and consuming wisely, might share the planet with many more companions, as nature rebounds.

We experienced firsthand this ‘backyard rewilding’ on a recent visit to Massachusetts. In one of the most densely populated of states, we were shocked to see huge wild turkeys running around suburban neighborhoods.

Wild turkeys – the official game bird of Massachusetts – are impressive animals that can grow to be roughly 20 pounds and 4 feet tall. By 1851, they had been eliminated from Massachusetts, a victim of hunting.

But now they’re back.

[T]oday’s turkey population in Massachusetts lingers around 20,000. But Marion Larson, an information and education biologist at MassWildlife, said officials had not counted on the turkey’s appetite for suburban – and even urban – living.

“That was something that surprised us,” Larson said. “Who knew? The last time there were turkeys in Massachusetts there weren’t a whole heck of a lot of suburbs.”

This time around, of course, that is not the case, and turkeys have proven especially adaptable to residential living. By his last count, Verrier said, there are at least two dozen wild turkeys living in Brookline, feeding off everything from bird seed to gutter trash and, sometimes, scaring the wits out of the townspeople.

New England wouldn’t just look different to Teddy Roosevelt; it even looks different from the New England in which we grew up.

Wild turkeys in Massachusetts

Wild turkeys in Massachusetts

In another encounter with suburban Mass wildlife, our dog got into a tussle with a skunk. As a result of that experience, we can report that the old folk remedy of dousing the dog with tomato juice does not get rid of skunk odor, and merely results in a dog that is both smelly and pink.

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The ‘socially responsible’ lifestyle: A chimera

Our post below about electric vs. internal combustion cars serves as a reminder of just how difficult it can be to correctly determine the social consequences of available choices. Most people would never even imagine that an electric car could produce more air pollution than a gasoline powered car. Yet that’s what the science indicates. It follows that someone interested in making the ‘socially responsible’ choice would generally make the wrong decision. Moreover, this dilemma is not unique; the overall social consequences of lifestyle choices are generally difficult or impossible to accurately determine.

As another example, consider the choice between two specific vehicle models: a Prius (hybrid, not strictly electric) and a Hummer. This choice involves two seeming extremes. The Prius is widely considered to be among the most environmentally-friendly vehicles on the road, whereas the Hummer is considered to be one of the most damaging to the environment. Indeed, the Hummer guzzles several times as much fuel per mile as does the Prius. From the point of view of protecting the environment, the Prius seems the obvious choice. And yet, several environmental factors weigh against the Prius and in favor of the Hummer.

  • People who drive a hummer, or any car with a very low mpg, will drive their car less since it is so expensive to do so.

  • Manufacturing costs are lower and not as energy intensive.

  • Lower routine maintenance costs.

  • The life span is longer lasting nearly 100,000 miles on average longer than a Prius before being scrapped.

  • Lower disposal costs, since there is no battery to worry about.

The question of whether the Hummer or the Prius is better for the environment hinges on whether the Hummer’s advantages listed above outweigh the adverse effects of its excessive fuel use. Accurately evaluating this trade-off is not easy. A 2006 study by CNW Marketing stirred controversy by concluding that the better vehicle was the Hummer. This result was contradicted by a 2007 study by the Pacific Institute that supported the Prius. The Hummer vs. Prius debate has now been raging for years.

So, which vehicle is better for the environment? Here at Yet, Freedom! our position is that we have no idea. We have never made a careful reading of the relevant studies. Doing so would require a considerable amount of time and effort. Moreover, investing all that time and effort might not clarify the issue very much. All studies rely on assumptions and tendentious claims that we cannot evaluate definitively, simply because we do not possess the necessary expertise. Deciding this issue with a considerable degree of confidence would be difficult or impossible.

But if the seemingly easy choice between the Prius and Hummer turns out to be unclear, the social consequences of other life choices are equally if not more unclear. For instance, would it be more socially responsible to work for a non-profit or a for-profit firm? Before you say non-profit, keep in mind that the pursuit of profit often has the unintended consequence of improving the well-being of society. Before Henry Ford revolutionized the auto industry, a car cost more than a house. After just a few years, Ford cut the price in half, making cars available to millions of people who previously could not afford them. Indeed, one would be hard pressed to find examples of non-profits providing as much value to society as was provided by profit-seeking entrepreneurs like Ford, Walt Disney, or Bill Gates.

Finally, consider the great diaper debate. Some people got the idea that cloth diapers, being reusable, might be better for the environment than disposable diapers. But while cloth diapers create less solid waste, they create more wastewater. So which is better, cloth or disposable?

A three-year study by the London-based Environmental Agency concluded that there was “no significant difference” between the environmental impact of cloth and disposable diaper.

This conclusion doesn’t mean that cloth and disposable had the same effects so much as that the uncertainties surrounding all the relevant costs gave no reason for preferring one diaper over the other. Again, these environmental questions are typically very difficult to answer definitively.

The bottom line is that trying to live a fully ‘socially responsible’ life is simply not practical. Almost any career or lifestyle choice involves innumerable and potentially far-reaching consequences that are difficult or impossible to identify and evaluate. Every decision would turn into a daunting research project, and time and effort devoted to gathering relevant information might do little to resolve uncertainty or to avoid mistakes. Hipsters who wash cloth diapers in organic soap and drive their Prius to their non-profit job might feel that they’ve attained the moral high ground, but that view is unsupported by the evidence. Life is not so simple as they imagine.

The following parody by College Humor underscores the hopelessness of trying to make personal choices on the basis of their social consequences.

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China’s official GDP charade is in—and, surprise! It’s 7%

A story from Reuters about China’s Madaoff- style economic track record:

Defying all expectations, China’s GDP grew 7% in the second quarter—at least according to the official charade.

[—]

It is an official charade because China’s GDP has long been recognized as a distorted measure of the country’s economic growth. The value “created” in the country’s economy is inflated by the fact that a good chunk of the stuff bought and built in China isn’t worth the official sticker price.

This is thanks to the government’s “implicit guarantee” of any investments that are political priorities. This gives investors, both corporate and individual, the confidence that the government will bail out any inconvenient losses. It encourages banks and individual savers alike to lend to wasteful projects, as long as an official imprimatur is looped in somewhere. It lets lenders accept these unprofitable projects at face value as collateral for more loans.

And thus, debt begets more debt—China’s nearly quadrupled from 2007 to mid-2014, to $28 trillion, McKinsey calculates. Outstanding loans using property as collateral now add up to 22 trillion yuan—about 40% of the total—according to Fitch, the ratings agency. That’s about five times what they were in 2008.

In a way, China’s quarterly GDP announcement is the meta-example of the implicit guarantee creating a moral hazard.

The Chinese government is the only major economy to set GDP growth targets each year. Throughout the year, government officials and the state press reiterate, or talk down, that GDP growth target depending on the political agenda. In decades past, these signals let local officials know how recklessly they should invest, or how brazenly they should lie about the results.

This illustrates that there is no sensible way to measure the value of output or growth in a quasi-command economy.  An old joke in China is that the government can hit whatever GDP number it wants by 1. Building a bridge and 2.knocking down the bridge, and 3.Building the bridge ……………..

Electric Cars: Are they really green?

According to a careful new study by the respected National Bureau of Economic Research, electric cars in most places produce more air pollution than do gasoline cars.

The idea that gasoline cars might cause less environmental harm than electric vehicles seems impossibly backwards. But consider the following thought experiment before you dismiss it out of hand.

A view from the tailpipe gives EVs a clear edge: no emissions, no pollution, no problem. Shift the view to that of a smokestack, though, and we get a much different picture. The EV that caused no environmental damage on the road during the day still needs to be charged at night. This requires a great deal of electricity generated by a power plant somewhere, and if that power plant runs on coal, it’s not hard to imagine it spewing more emissions from a smokestack than a comparable gas car coughed up from a tailpipe.

The study found that the cost of air pollution depends crucially on location. In parts of the country where the electric grid is powered by relatively dirty fuels like coal or oil, an electric car actually produces more air pollution. A gas powered car turns out to be cleaner in 38 out of 50 states–nearly everywhere east of the Rocky Mountains. The electric car wins in only 12 Western states.

Note also that this study looked only at air pollution created by operating the vehicle. The study did not consider the effects of manufacturing the vehicle. Electric cars cost more than gasoline cars because producing them uses more scarce resources. Many of these resources are non-renewable and significant sources of pollution. For instance, the electric car’s large battery requires mining nickel, which pollutes places like Russia and Lake Ontario. Taking into account the effects of manufacturing the vehicle would narrow or even undermine the electric vehicle’s advantage in the 12 Western states.

Next time you see some self-satisfied hipster douche getting out of his electric car, ask him why he hates the environment. And also why he’s OK with ripping off the taxpayer.

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