The Only Republican in San Francisco

Environmental heresies

An environmentalist (and SF legend) named Stewart Brand is beginning to imbue some rationalism into his environmental politics.

Stewart Brand has become a heretic to environmentalism, a movement he helped found, but he doesn’t plan to be isolated for long. He expects that environmentalists will soon share his affection for nuclear power. They’ll lose their fear of population growth and start appreciating sprawling megacities. They’ll stop worrying about “frankenfoods” and embrace genetic engineering.

My biggest fear about environmentalism is what I see as a certain Luddism -- that problems are best solved by moving to old ways. Organic farming is one example, resistance to nuclear power, empowering government to make more economic decisions. What all these have in common is a strong traditionalism and change aversion. They show a lack of confidence in humanity's ability to adapt and make choices.

It is very much the opposite of my view of the world. I think that humanity's prospects are greatly improved by people making more of their own decisions, especially economic ones.

Mr. Brand seems to understand this. He almost sounds libertarian, not by having moved across the spectrum from left to right, but perhaps by wrapping around the back. After all, "left" at one time was a position of rationalism -- not so these days, of course. But guys like Brand are hoping to reclaim the mantle and righties should welcome it.

Some examples of Mr. Brand's new rationalism:

“Sure, nuclear waste is a problem, but the great thing about it is you know where it is and you can guard it. The bad thing about coal waste is that you don’t know where it is and you don’t know what it’s doing. The carbon dioxide is in everybody’s atmosphere.” [...]

He sees genetic engineering as a tool for environmental protection: crops designed to grow on less land with less pesticide; new microbes that protect ecosystems against invasive species, produce new fuels and maybe sequester carbon. [...]

He now looks at the rapidly growing megacities of the third world not as a crisis but as good news: as villagers move to town, they find new opportunities and leave behind farms that can revert to forests and nature preserves. Instead of worrying about population growth, he’s afraid birth rates are declining too quickly, leaving future societies with a shortage of young people. [...]

Give the whole thing a read.

Trading gas taxes for income taxes

Greg Mankiw takes a look at a new CBO report, and notes that:

... we could increase the gasoline tax by $1 [...] and reduce all ordinary income tax rates, AMT rates, and dividend and capital gains rates by 2 percentage points [...] to produce an approximately revenue-neutral tax reform.

This is the sort of trade that I would be happy to support, as it would not represent an overall increase in taxes, but would align them more closely with certain goals. In this case, the goals are to reduce gasoline consumption, and therefore CO2 production, while also reducing revenues to countries that are, shall we say, troublesome.

It is critical that any new carbon tax is balanced with other tax reductions. The biggest barrier to reducing carbon production is humanity's desire to increase its standard of living -- especially in places like China and India where poverty is high and such standards are growing by leaps and bounds.

If we align our desire to reduce carbon with our desire to move up the ladder, we are more likely to succeed. If we take the hairshirt approach, our environmental goals become the enemy of humanity's goals.

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But a gas tax is not without problems. For one thing, it is regressive, which means that it would impact poorer people more than richer people. A person making twice as much money does not (on average) use twice as much gasoline. Gas is therefore a larger proportion of income for those who make less money, and an increase in the price of gas would represent a greater relative expense.

Add to this a more anecdotal idea: wealthy people are more likely to be able to live near where they work (i.e., in the cities and nearby suburbs), pushing their gas consumption even lower. Those in the more affordable outlying areas will have longer commutes, thereby spending more. And, lest we minimize this, keep in mind that one's ability to commute is a primary factor in finding a job.

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On the upside, an increase of $1 on a gas tax does not mean that consumers will actually pay $1 more over the long term.

Let's say that the base retail price of gasoline is $2.50/gallon. We add a $1 tax on top of that, and consumers therefore see a price of $3.50. Of course, this will reduce demand for gasoline, which will drive down the $2.50 base price over time, to, let's say, $2.25. The outcome for consumers, then, is an effective increase of 75 cents on the dollar.

The net outcome is that gas revenues are effectively redirected away from producers of petroleum and to the US treasury.

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Update [26 Feb]: Welcome Instapundit readers. A number of commenters are making excellent points that this is not a very free-market approach, and I don't disagree.

My argument is that we need to look at pragmatism as much as ideology here. I am not crazy about redirecting money toward the government. Keeping this revenue-neutral is key. Also, understand that when I say "producers" of petroleum, we are talking largely about governments and cartels (Russia, Venezuela, OPEC).

More importantly, it's about getting in front of the environmental hysteria that drives much of this discussion. We on the right can imagine we are taking the high road, while lefties set the agenda, the outcome of which will be highly detrimental taxes and much larger government, both at home and abroad.

Or, we can engage and put economics (read: logic) front and center. The idea that we will avoid a carbon tax is a bit head-in-the-sand, from my vantage point. I don't like it any more than you do. The question is, what form will it take, and who makes the call?

Boutique farming

An article in the Independent points out that organic farming is in many cases worse for the environment than conventional methods. This is primarily due to the fact that organic methods are much less efficient, and therefore consume more energy and land:

Similar findings were recorded with organic chickens, where the longer growing time means it has a higher impact on all levels, including producing nearly double the amount of potentially polluting by-products and consuming 25 per cent more energy.

Vegetable production was also highlighted as a source of increased use of resources. Organic vine tomatoes require almost 10 times the amount of land needed for conventional tomatoes and nearly double the amount of energy.

It is important to understand that buying organic foods is not a choice of greater morality. Rather, it is a decision to buy a nicer product at a premium price. It is a boutique product for people of means.

Which I think is a fine thing, but it should not be conflated with making a moral decision. I can afford to buy a nice suit. I can drink single malt Scotch. I can buy a tricked out computer. And I can buy organic tomatoes. None of these makes me a better person.

In the rich West, we've moved far enough up Maslow's hierarchy that we can eat not just for sustenance, but for self-esteem.

If we do want to imbue morality into our food choices, we should should be doing everything we can to improve the efficiency of food production to bring down the price. Between 1 and 2 billion people on the planet still do not have enough to eat, which is an economic problem. The problem exists in places where agriculture is difficult and/or where economic systems do not reward production.

Put it this way: to those for whom money is an object, an affordable, conventionally grown green pepper provides a lot more value than an unaffordable, organic one.

Penn & Teller do an excellent job making this point, with a guy named Norman Borlaug:

(h/t Instapundit and Memeorandum)

The Politico falls for Mitt

Terry Michael, who describes himself as a libertarian Democrat (the what now?) is quite smitten with Mitt Romney, having seen his web videos:

For the past year, I have been haranguing the college political journalists I teach with the prediction that Romney is going to get the Republican nomination and will likely be the next president, because Democrats have no farm team of successful governors. And America almost never elects a sitting member of Congress president [...] because voters intuitively know the difference between a legislator and a leader.

...and...

No one else in either party’s field of presidential wannabes comes close to Romney’s communication skill and executive presence. He makes Sen. Barack Obama, D-Ill., look like just another charming candidate for high school class president. [...]

Mitt Romney is Bill Clinton with his pants up.

Yeah, I've seen the potential for a while. Mostly I am interested in Romney's records of measurable success in running government and business. He understands wonky stuff, metrics, and real economics, things that are not necessary found in a career politician.

(His video site is pretty slick, btw.)

He's still my fave pick for the Republicans, because the 'Pubs biggest issue is not ideology, it's competence. Unfortunately, Romney on the ticket would not leave room for Giuliani, as they are both northeasterners.

McCain, though he is technically southern, is increasingly less attractive to folks like me. Better potential running mates are dark horses like Mike Huckabee of Arkansas -- popular, good human interest story -- and Haley Barbour, who has succeeded in cleaning up Mississippi while Louisiana has struggled.

US broadband mythology

Cynthia over at IP Democracy has an analysis (of an analysis) of US broadband in comparison with the world, to which I will add an analysis.

She contends that the US is falling behind in broadband and implies that we are in bad shape and need more government involvement. She makes some cogent points, but doesn't dig deep enough.

The first and most predictable example she points to is South Korea, and she claims that they have 100Mb/s upload and download speeds. I will make the equally predictable point that population density does matter (scroll down), but the real question is: how does she know that they actually get 100Mb up and down? She doesn't, and the original article doesn't -- it's just a meme that gets reported a lot.

An outfit called Analysys looked at actual network performance vs advertised performance [pdf], and found that South Koreans only get around 40% of what they pay for, at least for the "fast" plans, while the US gets over 90%. Their actual bandwidth is around 20Mb on the high end, while in the US we get around 13Mb.

Yes, Korea is still faster, but with 10 times the population density and the drum beat of a Korean miracle, shouldn't we expect something more miraculous?

Due to this inefficiency, the South Koreans pay around $3/Mb for connectivity vs around $5/Mb in the US. Since laying a mile of fiber will reach 10x as many people in Korea, shouldn't their prices be around 10x lower? Or even 5x? In fact, it sounds like the Koreans are getting ripped off, considering the efficiencies available to them.

Further, our actual throughput is well ahead of all of the European countries included in the Analysys survey. In working with colleagues at my company's European offices, I know this to be the case. I will take real bandwidth over advertised bandwidth any day.

Richard Hoffman (author of the original analysis) attempts to take apart the population density argument by pointing to countries with lower densities than ours who have better broadband penetration:

That argument falters, however, when one considers that five of the 11 nations that lead the U.S. in per capita broadband penetration, including Iceland, Finland, Norway, Sweden, and Canada, have significantly lower population densities than the U.S.

...and that's fine. But notice that four of these five countries are Scandinavian welfare states. Really, he is offering a single counter-example with a number of different names.

These countries do not refute the population density argument. Rather, they illuminate what I have said before: that socialism can only succeed in a homogeneous population. These countries are among the least diverse in the world -- so much so that the Human Genome Project chose Scandinavia because of its limited gene pool.

If the goal is broadband penetration in a non-diverse economy, Scandinavia offers a good example. The government can make spending decisions with which a majority of the population will agree. The rest of world, especially the US, requires a little more diversity of opinion and priorities.

In fact, we can combine all of Scandinavia, call it a country and still be smaller than a single US state --  say, Florida, which is a leader in broadband. In just one year, the US added more new broadband users (24 million) than the total populations of Richard's Scandinavian examples. So what are we comparing, exactly?

So while Cynthia's and Richard's articles offer some interesting insights, they are not blowing the lid off of any broadband myths. In fact, they are often simply repeating them.

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Look, we can consider broadband policy to be about keeping up with some mythical Joneses, or we can consider broadband policy to be about making the best choices for our citizens and our economy.

The idea that our state of broadband is hurting our economy is betrayed by the facts: a look at our job creation, unemployment, per capita incomes and growth rates tell a very different story. None of this should be taken for granted, of course, but the "broadband = competitiveness" meme is not borne out. How many jobs is Iceland creating, by the way?

If broadband penetration in the US is relatively low, we might consider the possibility that citizens have given it a certain priority in their lives. We'll get higher rates over time -- Richard notes 24 million new US broadband users over the course of a year, a 40% increase. But to have the government setting policy on this is to impose a priority on citizens that they have not chosen for themselves.

Of course I would like to see more and faster broadband. We are building a lot of it in this country, and broadband use and availability are growing apace. Let's focus on doing the right thing, instead of making a superficial top-10 list.

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Related: Martin Geddes asks us not to panic:

If we separately ranked US states, or divided the UK up into regions, the picture would change radically. London and southeast England would look great. So would a few US states like Virginia.

Some of those little regions with greater connectivity have familiar name tags. Like ‘Norway’, and ‘Luxembourg’. Yes, they’re real countries. [...] Yet their position in the rankings is an artificial by-product of how we divide up the statistics. It means nothing to the median European or North American.

If North and South Korea had a massive reconcilliation tomorrow, and thus the Unified Korean Republic plummeted to #102 in the world, do you think things are getting better, or worse? (Hint: begins with ‘b’.)

That's the question. We can easily point out that California and Florida have broadband rates that exceed those of the cited "leaders", with similar populations. So aren't they on the list?

If we want a meaningful list, let's talk apples to apples: compare actual, usable broadband across a number of large and diverse economies. How about North America vs the Euro area? Or versus the greater Far East?

The vagina epilogues

Looks like John Edwards' two definitely-not-bigoted bloggers have "volunteered" to step down from their posts on his campaign. It's a smart and necessary move by Edwards, though of course he's trying to have it both ways: unburden himself from having to answer for the bloggers' statements on "Christofascists" (and their own vaginas), while at the same time trying not to incur the wrath of the Tourettic left which bore them in the first place.

But he had to let them go. While it's a big buzz in the blogosphere, it is still a vagina-in-a-teacup, which is to say, the majority of voters have no vagina what it's about. Best for Edwards to get out now.

These bloggers -- at least one of whom thinks herself a "twat" -- are careening through their 14th minute of fame this week, and as of next, you won't remember their ... names.

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PS, I intended to title this "The vagina demagogues" but someone beat me to it. I did manage to find that Ms. Marcotte has mentioned her own and other people's vaginas over 300 times in the last year or so. Just sayin'.

Romney to announce tomorrow

To the surprise of precisely no one, Mitt Romney will officially announce his presidential campaign tomorrow. Here is the webcast.

Minimum wage begins to bite in the AZ

Arizona has recently instituted a 30% raise in the minimum wage, and they are already beginning to see the effects:

Oh, for the days when Arizona's high school students could roll pizza dough, sweep up sticky floors in theaters or scoop ice cream without worrying about ballot initiatives affecting their earning power.

That's certainly not the case under the state's new minimum-wage law that went into effect last month.

Some Valley employers, especially those in the food industry, say payroll budgets have risen so much that they're cutting hours, instituting hiring freezes and laying off employees.

This stands to reason, of course. For a business that depends on minimum-wage labor, a 30% spike in costs can only result in efforts to reduce those costs. There is no magic way for a company, especially a small one, to spend that much more money and expect to stay in business.

(Unless, of course, they magically become 30% more profitable -- but if that were possible, wouldn't they have done so already? :)

What is especially pernicious about the minimum wage is that it is younger people being put out of work. Besides the social strains that come from young people being idle, this sort of unemployment delays a kid's ability to gain work experience for use later in life. A study by David Neumark indicates that the effect is measurable 10 years later:

The evidence indicates that even as individuals reach their late 20's, they work less and earn less the longer they were exposed to a higher minimum wage, especially as a teenager. The adverse longer-run effects of facing high minimum wages as a teenager are stronger for blacks.

Put bluntly, a higher minimum wage is a force toward perpetuating an underclass.

I don't dispute that there are beneficiaries of a higher minimum wage -- many Arizonans will see their wages rise by up to 30%. However, many peoples' wages will drop by approximately 100%, as jobs disappear. And those who are hurt in this way are the ones we will never hear about.

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How about a few more implications. Both Wal-Mart and CostCo have come out in favor of a higher federal minimum wage. Why would they do that? That is, besides scoring the obvious PR points...

Well, these companies already pay above the proposed minimum wage, for the most part, and so will not be affected in a major way by the change. The businesses they compete with -- Mom and Pops in myriad towns around the country -- often do. So a higher minimum wage really just puts weaker competitors in a more difficult position. Expect big-box dominance to accelerate after the federal mandate passes.

(Not that I object to the big-boxes, I think they provide a substantial net benefit to our standard of living. It's just that a feel-good idea like the minimum wage might not comport well with other ideological goals.)

Esther Dyson, dynamist

Net doyenne Esther Dyson has a thoughtful piece on net neutrality over at the Puffington Host. She does a nice job of avoiding rhetoric and makes what I think are the sensible points on the subject:

[...] the paternalists and free-loaders who want to keep the Net the way it (supposedly) always was, open and "free" (for themselves as well as for consumers)? They want to make it illegal for certain (big bad) companies to offer too much in the way of network-based enhancements and charge for them. They are generally suspicious of business and even of consumers making their own choices. [...]

Perhaps the consumers should be able to decide for themselves, but amidst all the rhetoric they have a hard time figuring out what to ask for....

There are real issues here, but legislation isn't gong to solve them. Antitrust enforcement is probably the best solution.

To which I say, hallelujah. As much as I am willing to employ snark in this debate, my position comes down to the simple idea of avoiding new laws where they are not necessary. Remember, laws can only impede — they can't effectively compel you (or an organization or an industry) to do things. They can only specify what you cannot do.

We cannot legislate new bandwidth into existence. All we can do is to provide as free a playing field as possible, with basic protections (such as property rights and antitrust) at the outer margins.

Especially in the case of the technology industry, keeping all possibilities open is the way to maximize progress and truly measure public demand. Prophylactic new laws — beyond the myriad ones we already have — can only slow this down.

Dyson proves herself a dynamist on this point, in that she believes that our priorities should be based around making changes — and choices — possible. Net neutrality is the opposite of this: it is an attempt to lock in the current technological tradition at the expense of future possibilities.

New Deal back-and-forth

Here is an interesting back-and-forth between Arnold Kling and Brad DeLong, a couple of econ bloggers I read with some regularity. They discuss the New Deal, and while I am tempted to make some ideological points here, these two guys are far more expert than I will ever be, so I suggest you just click through.

DeLong is one of the few lefty bloggers that I take seriously, even though I rarely agree with him. And by serious, I think he believes what he does for real, logical, empirical reasons. Economics, like medicine, is at its heart both prescriptive and speculative, and so while we can agree on basic science, informed people can disagree on the way forward.