The Wrong Tools for the Job

Whatever you read today, you’ll find writers marking Earth Day by taking stock of environmental progress. Some will celebrate how far we have come in the last 41 years: no burning rivers, bald eagles are back, etc. Others will stress how far we have to go, citing biodiversity loss, water crises, and above all climate change. (And if your reading habits are sufficiently diverse, others will argue we’ve gone too far, and that environmental rules are hurting our economy). All of these (yes, even sometimes the third) are partly right, but arguing over which frame is “right,” if any can be, is not that illuminating.

A better way to take stock of environmental progress is to look at the tools we are using. And unfortunately doing that leaves me profoundly depressed. For almost every environmental problem, the best, most cost-effective solutions are rejected in favor of second-bests, hopeful handouts, or inaction. To give just a few examples:

Transportation: With vehicle emissions dirtying city air and contributing to climate change, inadequate investment in road infrastructure, and a strategically costly dependence on foreign oil, the US could increase gas taxes, which are lower than those in almost every other developed economy. Instead, we use some policies that give no incentive to reduce driving while at the same time restricting consumers’ choice of cars (CAFE standards) and others that cost billions while driving up global food prices (ethanol subsidies).

Smog and Acid Rain: For a beautiful moment, from 1990 through 2010, we did it right: we had a nationwide cap-and-trade program for sulfur dioxide emissions that caused smog and acid rain. The program resulted in huge health benefits at far less cost than even EPA estimated. But that program is or will soon be dead. New EPA rules are set to end interstate trading for most of the country and will impose other restrictions that mean allowances now have almost no value. EPA doesn’t deserve all the blame—courts rejection of flexible tools and Congress’ failure to act are the true sources of this problem. But it’s just crazy to kill the best environmental program this country has ever had.

Climate: Despite the Senate’s failure to even consider a single climate bill last year, we do (to the surprise of some) have an American climate policy. States and EPA are leading the way, but even if they are both bold and smart, the patchwork of carbon markets, emissions standards, and energy subsidies that emerges will surely be less efficient overall. Emissions reductions will be less, and those we do get will cost more. How is that a good deal?

I could go on. Everywhere you look, even when we deal with environmental problems, we consistently choose ways to deal with them that are costly, ineffective, or even counterproductive. It would be one thing if the best ways to solve these problems—cap-and-trade, taxing externalities—were untested ideas. But of course they are not. They are well understood, and as close to dogma as is possible among economists. Most damning of all, we used to understand this, across the political spectrum. As the sulfur dioxide story illustrates, even if we are making some environmental progress we are getting worse as a country at dealing with these issues effectively.

There is a political story here, of course. There was a time when many on the left rejected efficiency as a goal of environmental policy. The right pushed for a role for markets, and eventually a grand compromise emerged in the 1990s. Efficiency was understood to be a universally valuable goal: more effective policies meant lower costs or more environmental benefits at the same cost. Politics was about making this tradeoff, as it should be.

But somehow cap-and-trade became cap-and-tax, and a large section of the right seems opposed to any environmental policy, whether efficient or not. They’ve moved the goalposts. This about-face is particularly ironic since it leaves government handouts like nuclear subsidies and inflexible restrictions like renewable portfolio standards as the only politically plausible energy policies. How is that pro-market or anti-big government? (The left is not without some blame too: to see that, just look at how fringe groups have recently derailed California’s cap-and-trade program).

But there’s more to this story than just party politics. Efficient environmental policy simply has not caught on with the American public. Sticker shock (like gas taxes) trumps long-term efficiency every time. Hiding costs through subsidies (like ethanol or nuclear) is always more popular than showing them up front by pricing externalities. Defending or securing benefits to the few is always easier than minimizing costs to the many. With environmental problems, costs are often distant in time or diffuse, or benefits are small but widespread. This exacerbates all these problems—that’s what makes them hard.

To some extent our failure to make good policy is a failure of leadership: hiding costs is classic politics, and tearing down those who ask us to make hard choices is easy. We see this in almost all issues, not just environmental policy. But leaders can’t carry all the blame, not least because we choose them.

So is there anything to be hopeful about on Earth Day? If so, it’s hard to find. The trend is in the wrong direction—it is as if we are forgetting everything we’ve learned about dealing with environmental problems. But eventually the biggest such problems—among them water, energy, and climate—will become too large to ignore (arguably, they are already there). When they do, efficient policies for dealing with them will be available. When we are ready, we can do this.

 

Why the U.S. is No Longer a Leader in Environmental Policy

The past decade has been extremely depressing for the U.S. environmental community. Rather than lead the world on climate and energy policy, the U.S. has fallen further behind our developed-world allies, and now even lags behind rising powers such as China and Brazil.

The question arises: Why has America not been able to muster the political will to usher in a clean energy future and join forces with the other rich (and not so rich) nations of the world to combat climate change?

The answer is, of course, complex. Institutional barriers in the American political system favor rural states over urban ones and demand super-majorities that are almost impossible to muster; powerful industrial interests continue to disproportionately sway politicians while funding vast networks of misinformation; and one of our two major parties has embraced a virulently anti-science position that is unprecedented in modern history.

But there is something even more fundamental that the environmental community has failed to grasp. It’s not that Germans, Canadians, Norwegians, and French have a greater love for the environment, or that these countries lack parochial and special interests and powerful corporations. Above all else, what differentiates Americans from these other wealthy nations is our much greater degree of economic insecurity.

The reality is that a bold new energy and climate change policy would inevitably result in dislocations in certain industries and upset long-established ways of life in many regions; in addition, it would lead to higher prices for basic commodities such as gas, home heating oil, and food.

In societies where there are strong social safety nets―universal healthcare, universal preschool, strong support for new parents, significant investments in public transportation, and sustained support for higher education ―the changes wrought by a paradigm shift in energy will tend not to result in hugely destabilizing effects across whole towns and communities. In fact, with good planning and investments in critical infrastructure, strong environmental policies can result in overall improvements in the quality of life for nearly everyone.

Throughout much of the developed world, citizens are willing to pay prices for gasoline that would lead to riots in American streets, because they know that the government revenue raised by high gas taxes is used for programs that directly benefit them. In other words, ten-dollar a gallon gas isn’t such a big deal when everyone has great healthcare, great public transportation, and free high-quality schooling.

Many environmentalists criticized President Obama for using virtually all of his political capital to pass healthcare legislation before a comprehensive energy bill. Though many of the benefits of that healthcare bill won’t go into effect until years from now, and support for the legislation still suffers from the copious amounts of misinformation peddled by the bill’s detractors, the goal of universal healthcare will ultimately serve the environmental community. The question is whether it will be too late to matter.

 

The bottom line is that people are much more willing to support environmental policies that come with large risks and disruptions to their way of life when other policies are in place to shield them from excessive risk and instability. Progressive environmental policies must rest on a foundation of broader investments in social safety nets. One of the primary reasons that the U.S. has fallen behind the world on environmental policy is because we have fallen behind on virtually all measures of economic security; the two are intimately linked.

 

 

The Environment: What the Public Thinks

It’s Earth Day, but as far as problems go, the environment now ranks last among 15 issues that the public thinks Congress and the President should deal with this year. Only 24 percent of Americans think the environment is an “extremely important” issue. On this score, the environment comes in behind “the situation in Iraq” (27 percent), “taxes” (27 percent), and “illegal immigration” (30 percent) and “gas and home heating prices” (31 percent).

Moreover, when it comes to the trade-off between the economy and the environment, meanwhile, the economy now wins hands down: 54 percent to 36 percent. This is actually a relatively new development. Prior to 2008, the public had never prioritized the economy over the environment. As recently as 2007, the public supported giving the environment priority over the economy 55 percent to 37 percent, and throughout the 1980s and 1990s public opinion was consistently 65-to-25 in favor of environment over the economy, with slight dips in environmental friendliness during recessions.

Not surprisingly, the changes have been most pronounced among Republicans and conservatives. In 2000, conservatives prioritized the environment over the economy 62-to-33 percent; Now they prioritize the economy 70-to-22 percent – a remarkable 38 point shift. Similarly, Republicans overall went from 60-to-34 percent environment first to 55-to-35 economy first.

But even liberals have become less environment first. In 2000, they supported the environment over the economy 74 percent to 22 percent; now it’s 55 percent to 35 percent economy over environment. Same with Democrats overall: In 2000, they favored the environment 69 percent to 27 percent; now it’s just barely: 46 percent to 42 percent.

Certainly, a sluggish economy has something to do with things. When unemployment flirts with double-digits and the economy is in recession, it’s much easier to see the top priority as creating jobs. Moreover, the visible environment is in pretty decent shape these days. The skies and rivers are not brown, thanks to environmental regulations passed in the 1970s. Whatever environmental disasters might exist lurk in the hypotheticals of global warming.

As for the environmental problems that people care about, drinking water comes out first (51 percent care a great deal about it), followed closely by soil (48 percent), and rivers, lakes and reservoirs (46 percent).

But even on the these issues, the public is a lot less worried. In 1989, 72 percent of Americans cared a great deal about the pollution of rivers lakes and reservoirs, as opposed to 46 percent today. Similarly, in 1989, 63 percent cared a great deal about air pollution; today it’s 36 percent. This is a success story, because public opinion reflects the fact that these issues just aren’t the big deal they used to be.

What’s troubling, however, is the extent to which public opinion is becoming less concerned about global warming. Only one quarter of respondents care a great deal about global warming, ranking it last among eight environmental issues. That’s down from 41 percent as recently as 2007.

Similarly, as recently as July 2006, 79 percent of respondents thought that there was solid evidence that the earth is warming, and 50 percent believed it was because of human activity. Now only 59 percent believe the earth is warming, and just 32 percent think it’s because of human activity.

What’s emerged is a partisan divide on the issue. Whereas Democrats have been largely consistent in believing the earth is warming, Republicans have increasingly become convinced that global warming is not a problem.

All of this, however, is too bad for Obama, because environmental stewardship is one of the issues the President polls best on: 55 percent of Americans think he is doing a good job “protecting the nation’s environment” as compared to 33 percent who think he is doing a poor job.

Why Budget Line Items Don’t Die

In today’s Washington Post, David A. Fahrentold marvels at what he calls the “Line Items That Won’t Die” – federal programs that benefit narrow interests, but somehow manage to keep getting funded: “One spends federal money to store cotton bales. Another offers scholars a chance to study Asian-American relations. Two others pay to market U.S. oranges in Asia and clean up abandoned coal mines.”

Fahrenthold attributes their success to having Congressional champions. The study of Asian-American relations, for example, takes place at a Honolulu nonprofit called the East-West Center, and enjoys the support of Sen. Daniel Inouye (D-Hawaii), who also happens to be chairman of the Senate Appropriations Committee.

But there’s also a broader story: the simple fact that when a government program benefits a narrow constituency, it’s very easy for that constituency to organize and make demands on legislators about why this program is worth keeping. The larger public, meanwhile is rarely aware, and even if it were aware, is unlikely to do anything.

Take the Market Access Program discussed in the article, which helps promote U.S. agricultural products abroad. A coalition of agricultural interests benefit greatly from this, and they are organized to advocate fiercely for its continuance and threaten to punish any Senator or Congressman who would vote against the program by withdrawing votes and campaign contributions. Nobody in the general public, however, is likely to care about or vote based solely on this single issue.

This is the difference in what congressional scholar R. Douglas Arnold has called “attentive publics” and “inattentive publics.” Attentive publics are the small groups that care deeply about particular policies, and as a result, are likely to be more influential because they care so intensely about that one issue. Inattentive publics are everyone else. The public might be outraged after reading about the Market Access Program, but the likelihood of most people following up are small. Think of it this way: If 1,000 people want money from you, but only one bothers to keep calling you up telling you why he’s so deserving and threatens to punch you in the face if you don’t give him the money, you’re probably going to give that one person money, especially if it’s likely the other 999 will not even notice or if they do, won’t remember.

Another way to think about it (borrowing from James Q. Wilson) is in terms of distributed costs and concentrated benefits. The benefits of a program that pays peanut and cotton farmers to store their bales and bushels in warehouses are solidly concentrated among peanut and cotton farmers. The costs are distributed to everybody else. But the cost per taxpayer is so small that it’s hard to imagine any group getting organized to fight this particular program. Whereas the farmers – well, they’re damn certain to do fight any cuts to the program. What results is what Wilson calls “client politics” – where small narrow interests work with the relevant congressional committee and executive agency staff to build a usually impenetrable consensus around the importance of a single program.

The challenge for governing is that the federal budget and tax code and regulatory apparatus are filled with thousands upon thousands of these programs, each protected by a small consensus, and without any public coverage. One only need to scroll through the Federal Register to see all the small issues that could potentially benefit small attentive publics at the expense of everyone else. Or better yet, look through the tax code to find all the little credits and deductions for very narrow benefits. It’s enough to make your head spin round and round and round. Jonathan Rauch has pessimistically called this condition “Government’s End.”

I don’t really have a solution. In part, this is the nature of our current system of government and the size and complexity of our economy. But the point is, these programs are very difficult to kill, and Fahrenthold’s story is just the tip of the iceberg.

Ken Adelman’s Foreign Aid Myopia

To say Ken Adelman – Ronald Reagan’s UN ambassador – takes thin appreciation for the benefits of foreign assistance would be an understatement. Writing in response to Joe Nye’s article on the importance of “smart power,” his rebuttal piece in Foreign Policy paints is a myopic view of American foreign aid, and in Adelman’s rush to end the practice, manages to throw the baby out with the bathwater.

Here’s Adelman’s conclusion:

For decades now, the United States has been the No. 1 foreign-aid donor … but this hasn’t translated in making America the most popular or most influential country around the world. …

Four of the largest U.S. foreign-aid recipients today — Egypt, Israel, Pakistan, and Afghanistan — all take contrary positions on issues of critical importance to the White House. South Vietnam once got gobs — gobs upon gobs — of U.S. foreign aid. That didn’t help much. Likewise with Egypt, Iran, Pakistan, Zaire (now the “Democratic” Republic of the Congo), and other “friendly” (read: graciously willing to take U.S. money) countries. …

Put bluntly, this aspect of soft power — foreign aid, by far the biggest in dollar terms, amounting to some $30 billion* a year — may not constitute much power at all.

In Adleman’s world, the only reason America should give to impoverished countries is to buy quid pro quo support in the UN, or to compel local governments and populations to unambiguous pro-American stances.

So a thought exercise, let’s enter Adelman’s world and imagine what would happen if we distributed foreign aid on his terms. Actually, we don’t have to imagine very hard, because there’s already a glowing exemplar of Adelman’s approach: North Korea.

In America’s dealing with Pyongyang, we only dole out aid only when there’s an immediate quid pro quo. Certainly the depths of North Korea’s poverty and recalcitrance of its leadership create a truly unique situation, but the basic premise holds: America is rich, North Korea is poor, and important strategic issues must be discussed between them.

Here’s what happens: Without regular American aid, North Korea throws a two-year-old style temper tantrum by testing (or threatening to test) a nuclear warhead; the United States and Europe scramble to put together an assistance package; Pyongyang temporarily calms down… until the next time they need something. In other words, we’re negotiating with the DPRK on its terms. American- and European-led efforts to engage North Korea have only been fleetingly successful: the regime will sit down with us when it pleases and then stall without giving much up until it needs something.

The converse case is how America deals with pretty much the rest of the developing world: We provide the developing world money on a regular basis. Yes, a lot of it is skimmed off by corrupt local officials, and some is directed at narrow strategic objects that help tighten local despots’ grip on power. To fault aid for supporting individuals, rather than institutions, is perfectly valid, and has contributed to the Obama administration’s inconsistent policy across the Middle East.

But a good chunk gets to where it’s intended (to military, infrastructure, health, or civil society groups) that is appreciated for one reason or another. The sum total is that the “payoff”(if you want to be callous) of American foreign is helping to create stable, working relationships with countries the world over. Foreign governments and their populations aren’t going to side with the United States on every issue (or even most issues), but maintaining open channels of communication to the ruling class and opposition groups are critical to productive dialogue that shapes policy over the long arc. And yeah, it just may help build democratic and stable societies, which are inherently aligned with America’s values and interests.

The bottom line is that foreign aid, however imperfect, creates the contours for America’s role in the world. Take it away, and we’re left bribing everyone. Just ask Kim Jong Il.

The Supreme Court Hears AEP v. Connecticut

Would that allow you to sue all those farmers . . . cow by cow, or at least farm by farm? – Justice Scalia

You’re going to put a $20 a ton tax on carbon, and lo and behold, you will discover that nuisance will be abated. And we bring in 15 economists. – Justice Breyer

In oral arguments for AEP v. Connecticut today the Supreme Court today seemed skeptical of Connecticut and other states’ argument that they should be allowed to pursue nuisance suits against major power companies for their GHG emissions. The transcript is available, and SCOTUSblog has a good overview of the arguments. Though making predictions based on oral arguments is dangerous, I will be very surprised if the court allows this case to proceed. But it is much less clear which of the available reasons for halting the case the court will choose. That decision will have implications that extend well beyond the legal details, and choosing one of the reasons—displacement—could even be beneficial for climate policy.

To recap for those of you that haven’t been following the case, the court has four separate plausible justifications for dismissing it. Very briefly but (hopefully) in plain English, the court could rule that the states can’t sue because:

a) any injury from climate change can’t be traced to the power companies, or courts can’t craft a remedy (Article III standing),

b) the harms of climate change are too generalized and better addressed by Congress (prudential standing),

c) climate change is a “political question” that courts can’t decide; or

d) the Clean Air Act and EPA “displace” federal common law suits like this one.

With four separate grounds available, all of them arguably applicable, the states were always on shaky ground. In fact, the only way I can see the court allowing the case to proceed is if the justices cannot agree on which rationale to choose. If there is no majority, the lower court decision (which favored the states) would stand. This is slightly more likely than normal since Justice Sotomayor has recused herself, making a 4-4 split possible. But this outcome is unlikely. The court will probably choose one (or more) of the rationales and dismiss the case.

The justices spent some time at arguments on each of the four rationales. The political question doctrine was discussed the least, but I can’t rule out any of the four. But it is interesting that two of the justices most likely to rule in the states’ favor—Justice Kagan and Justice Ginsburg—focused on the displacement issue. Each seemed to feel EPA moves to regulate GHGs were significant, and in tension with a nuisance suit: Ginsburg suggested that the suit would require courts to become a “super EPA” without the expertise for that role. If these justices favor dismissing on displacement grounds, that may be the compromise that emerges from the Court.

It helps that an opinion citing displacement almost writes itself—this case was filed, decided, and appealed at a time when EPA never looked like regulating GHGs. A lot has happened since then: Massachusetts v. EPA, the 2009 GHG endangerment finding, new vehicle emissions rules, and the late-2010 settlement agreement under which EPA committed to regulating emissions from exactly those facilities the states are pursuing: the electric power sector.

The states point out that these regulations aren’t in place yet, and though I don’t think that helps them avoid legal displacement, it illustrates why a court decision based on displacement would be so important. If you’ve been following Congress this year, you know EPA authority over GHGs is under threat. It narrowly survived the 2011 budget process, and is likely to be targeted again. But if this authority is all that stands between emitters and federal nuisance suits, it becomes much harder to get rid of. The power companies already acknowledge in their brief that EPA does have the authority to regulate GHGs from their plants (which should, by the way, finally end attempts to rhetorically relitigate Massachusetts v. EPA). If the Supreme Court rules that Congress displaced suits like Connecticut when it gave broad authority to the EPA under the Clean Air Act, legislators are much less likely to take that power away, at least not without putting something new in its place.

So while a loss for the states on displacement grounds might seem like an anti-environmental result, it would be just as accurate to view it as pro-EPA. Dismissal of the case on standing or political question grounds does not have this effect. This also illustrates why displacement is the narrowest grounds for dismissal—if the EPA fails to act or is disarmed by Congress, the Court can revisit the issue, and only then would it need to draw sweeping conclusions about the scope of broad legal doctrines.

The EPA, armed only with its current powers, is not the ideal architect for climate policy—but it is a far better venue than the courts, for both practical and philosophical reasons. The justices today seemed acutely aware of these limitations. Assuming my prediction is correct and this case is dismissed, I agree with others who argue that is the right result regardless of our views on climate policy. But it’s possible that in dismissing the case the Court will strengthen the EPA. If so, that’s good news for the climate too.

Obama Needs a Bipartisan Elder Statesman Road Show to Tackle the Deficit

As President Obama begins taking the budget deficit battle show on the road, he faces a number of obvious challenges. But perhaps the most pressing one is this: In the hyper-polarized political environment, how does a President whose approval ratings are stuck in the 40s successfully make the public case for a serious deficit reduction plan?

The answer is he’s going to have to try something different. If it’s just the usual campaign-style events like the GW speech from last week (“I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.”), Republicans will respond predictably with wild demagoguery on tax hikes and entitlement cuts, and the battle lines will solidify into familiar gridlock patterns.

But here’s an alternative: Obama should to send a signal that this is serious, this is above party, this is for the good of the country, and if we don’t solve this problem soon, we’re going to pay a major price later. To do this, Obama should assemble a bipartisan team of elder statesmen to accompany him around the country as he talks about this. Imagine if he brought together Clinton and Bush Sr. on a hard-choices-to-tackle-the-deficit tour to give this some gravitas beyond the usual campaign-style events. At the very least he should be going around with Bowles and Simpson.

While the conventional wisdom is that the President can use the bully pulpit to move public opinion, the reality is that this is rarely the case. Public opinion is not easily moved, especially not by a highly divisive President on an issue that touches on issues of entitlements. (see, George W. Bush, privatization of Social Security).

And Obama seems smart enough to know that once a particular plan becomes the “Obama plan,” it’s going to be very hard to get any Republican co-sponsors, which is one reason he’s been slow to talk in specifics.

The political problem is that any serious deficit reduction plan has the dyspeptic taste of chalky medicine going down. This is not Ronald Reagan seeking public support for his tax cuts. A responsible deficit reduction proposal that requires tax increases and entitlement cuts (as a responsible plan must) exposes its advocates to attacks on the two most easily-demagogued issues in American politics. (He wants to raise your taxes! He wants to cut your Medicare and Social Security!) In other words, the politics of that responsible plan are very bad.

And yes, we know deficit reduction good for us, and increasingly, we know we really need to take that medicine (the federal deficit is rapidly shooting up among the ranks of Gallup’s most important problem). But we also keep thinking there must be a tastier medicine that can do just as good of a job, in good part because there’s always somebody out there promising a tastier medicine – magical elixirs based on heroic assumptions about tax cuts or mythical savings to be had from eliminating waste, fraud, and abuse or wooden-nickel promises about being able to preserve entitlements as they are.

If we’re going to get beyond this destructive dissembling, Obama’s going to need some Republicans out there speaking with him. Any plan needs to be sold as a bipartisan plan from the start.

While it’s unlikely any Republicans in the Senate would put themselves out on a limb and appear publicly with Obama, there should be some retired Republicans who might be willing to lend their name to a bipartisan effort to build a serious deficit reduction plan, especially given the stakes involved.

Had the President jumped out there earlier and defined the parameters of the debate on deficit reduction, he might be in a better place rhetorically. But Obama clearly believes in the rope-a-dope strategy – let the other guy (in this case Ryan) get out there first, and then punch back once he’s over-extended.

And yes, Obama can be the anti-Ryan if he wants, since the Ryan plan does not comport particularly well with the contours of public opinion. This might help in the short run. But it also runs the risk of defining the left flank of the debate, when that should really be reserved for the Progressive Caucus plan of 80 percent tax hikes.

This time, Obama should be more creative. Solving the federal deficit is a generational problem that needs to rise above party. Putting together a bipartisan road show of elder statesmen would signal that this is something grave and serious, not partisan politics as usual.

Air Force Certifies the Weakness of Domestic Manufacturing

I was just revising a portion of my textbook, Economics:The Basics and I happened to come across this March 21, 2011 entry in the Federal Register where the Air Force is granting a waiver from the Buy American requirements of the American Recovery and Reinvestment Act of 2009. This is what the waiver said:

The domestic nonavailability determination for these products is based on extensive market research and thorough investigation of the domestic manufacturing landscape. This research identified that these products are manufactured almost exclusively in China.

Which products are they talking about?

… the following construction items to be incorporated into the project FTQW094001 for the construction and replacement of military family housing units at Eielson AFB, Alaska under task order FA8903-06-D-8505-0019. The items are 1″ Collated Screws, Shank #10; 1-1/2″ (Taco) Air Scoops for Hydronic Heating Systems; 1-5/8″ Ceramic Coated Bugle Head Course Thread Screws; 2″ (Taco) Air Scoops for Hydronic Heating Systems; 2-1/2″ (Taco) Air Scoops for Hydronic Heating Systems; 2-1/2″ Collated Screws; 3″ Ceramic Coated Bugle Head Course Thread Screws; 3″ Spool Insulators;3/4″ Collated Screws, Shank #10; 3″;Bolt Guy Clamp; Ceiling Fan; Ceiling Fan w/Light Kit; Door Hinge Pin Stops; Exterior Wall Mount Two Head Flood Light w/270 Degree Motion Sensor & Brushed Nickel Finish; Ground Fault Circuit Interrupt (GFCI) Receptacles; Handrail Brackets; Maclean Power Systems Guy Attachment; Residential Style Satin Chrome Handrail Bracket; Satin Nickel Outdoor Sconce Light Fixture; Tamper-Resistant Ground Fault Circuit Interrupt (GFCI) Receptacles; Weather-Resistant Ground Fault Circuit Interrupt (GFCI) Receptacles; Pendant Bar Light Fixture; 24″ Bath Vanity Light Fixture; Pendant Chandelier Light Fixture; Linear Fluorescent Ceiling Lighting Fixture (48″ Lensed Fluorescent w/Dimming Ballast & Satin Aluminum Finish); 48″ Bath Vanity Light Fixture; 20″ Utility Shelf Bracket; Chrome Finish Residential Dishwasher Air Gap Cap Fitting; Satin Chrome Finish Convex Wall Mount Door Stops; Residential Microwave w/Range Hood; Residential Style Polished Chrome Towel Ring; Residential Style Polished Chrome Toilet Paper Holder; Residential Style Polished Chrome Double Robe Hook; Residential Style Bright Stainless Steel 60″ Curved Shower Rod & Flanges; Residential Style Polished Chrome 24″ Towel Bar; Residential Style Polished Chrome 30″ Towel Bar; Satin Nickel Finish Wall Mounted Spring Door Stop.

Hmmm…it’s pretty amazing, don’t you think, that the Air Force is certifying that none of these items are available from American manufacturers. It’s even more extraordinary given that the BEA reports that the U.S. fabricated metal and electrical equipment industries were producing at very high levels as recently as 2007. Similarly, the BLS is reporting record levels of output in the ‘turned product, screw, nut and bolt’ industry as of 2007.

I see four possibilities.

First, the Air Force could be lazy. The parts are really available, but they can’t find them.

Second, U.S. manufacturers only make sophisticated parts, not towel bars and door stops.

Third, these industries were doing great through 2007, and have only gone offshore since the recession.

Fourth, the official data didn’t pick up the offshoring in the 2000s.

Take your pick.

Crossposted from Mandel on Innovation and Growth

How to Think About AEP v. Connecticut

Today, the U.S. Supreme Court will be hearing oral arguments in AEP v. Connecticut, a case that will decide whether eight states have the right to sue American Electric Power (AEP) Co. and several other utilities for greenhouse gas emissions. The states have argued that carbon dioxide emissions are a “public nuisance” because they contribute to climate change. They’re hoping to force the companies to reduce their emissions through litigation. The power companies have argued that because of the complexity of climate change, it’s impossible to draw a causal link between any specific emissions and any unwelcome changes in the weather.

For helpful background on the case, there’s no better place to turn than to a recent PPI memo entitled “Why Progressives Should Cool to ‘Global Warming’ Lawsuits.” In the memo, author Philip Goldberg argues that such litigation makes little sense:

Progressives should … not reflexively support climate change litigation, no matter how passionately one might favor emission reductions. We should adhere to our principles and protect due process rights of defendants, even when those defendants are large corporations. The David and Goliath analogy may score political points, but it only works in litigation when Goliath does something objectively wrong. Otherwise, any group that fails to get its way in the political arena will turn to the courts. Such an act would be an affront to democratic proceduralism that has long defined our progressive philosophy.

You can read the entire memo here.

Wingnut Watch: The Tea Party Celebrates Tax Day

The Tax Day (or more accurately, Tax Weekend) observances of the Tea Party movement weren’t as large or well-publicized as in the past, but they did reflect the hardening consensus of conservative activists against both the appropriations deal just agreed to by congressional Republicans, and the coming legislation increasing the public debt limit. This consensus is being reinforced by potential presidential candidates and other opinion leaders who are encouraging the perception that the Beltway GOP is once again “selling out” the conservative movement and its latest Tea Party incarnation.

This snapshot of the mood at New Hampshire Tea Party events by Michael Crowley is illustrative:

The overall picture is one of a restless Republican base that sees defeating Obama as a matter of national survival. Angry conservatives believe Washington is spending the country into oblivion, and that lazy freeloaders are leeching federal money at the expense of ever more squeezed middle-class taxpayers. They also feel that the Washington game is rigged against them: “We’re constantly being lied to,” fumed Dan Dwyer of Nashua at a local GOP confab on Thursday night, still angry that Republicans had “caved” in their budget negotiations with Democrats earlier this month.

At a Wisconsin Tea Party rally, anger at congressional Republicans was fed by none other than Sarah Palin, who “unleashed a withering critique of congressional Republicans Saturday, lambasting them for not cutting spending deeper and faster, and saying the party needs to ‘fight like a girl.’” Meanwhile, Tim Pawlenty, who spoke at a number of Tea Party events, has been urging Republicans to oppose a debt limit increase on the questionable grounds that arrangements could be made to avoid a federal credit default until the autumn.

The superficially confusing aspect of this rhetoric is that the conservatives who are being most vocal about the dire nature of the deficit-and-debt emergency are precisely the same people who are fearful that congressional Republicans might cut some long-term budget deal with Senate Democrats and the administration that leaves increased taxes on the wealthy on the table. That’s why they are linking any approval of a debt limit increase not just to some deficit agreement, but to acceptance of the kind of deep spending cuts and “entitlement reforms” laid out in Paul Ryan’s budget proposal.

Accordingly, we will soon see Tea Party fire concentrate on those Senate Republicans said to be negotiating a deal that would include some tax increases. The Republican point man in the so-called “Gang of Six” of bipartisan senators engaged in these negotiations, Saxby Chambliss of GA, is already drawing unfriendly home-state fire from Red State’s Erick Erickson, who had this to say today:

Senate Republicans are going to support raising the debt ceiling and raising taxes all while refusing to demand passage of a Balanced Budget Amendment. House Republican Leaders will no doubt decide that . . . well . . . Republicans only control one house of one branch of government so . . . .

Bend over America.

This conflict will soon make it more obvious than ever that most conservative activists, including those identified with the Tea Party Movement, are less concerned with deficit reduction than with permanently shrinking the size and reach of the federal government and pushing both radical spending cuts and continued tax cuts.

On another front, there are growing signs that Republican elites have decided to give Donald Trump the same dismissive treatment that was said to have led to Sarah Palin’s steady decline in credibility as a potential presidential candidate. Over the weekend, Karl Rove called Trump a “joke candidate.” Playing his snooty Tory role, George Will called The Donald a “blatherskite,” and warned he could seriously screw up Republican presidential candidate debates. Slate’s Dave Weigel went to the trouble of reading Trump’s 2000 proto-campaign book, and noticed that Trump expressed a fondness for the Canadian single-payer health care system. Surfing off that disclosure, the Club for Growth put out a release calling Trump a “liberal.”

It’s almost certain that this offensive was stimulated by the Public Policy Polling survey of Republicans that was released on Friday showing Trump jumping out into a sizable national lead over the rest of the potential presidential field. Trump’s 26 percent is higher than any proto-candidate has registered in early national polls. And the internals, showing 23 percent of Republicans saying that could not vote for a candidate who believes Barack Obama was born in the United States (and another 39 percent saying they weren’t sure if they could or not), were probably terrifying to beltway GOPers.

No Trump

Eventually, even billionaires grow bored with making money and look for more meaningful pursuits. For Bill Gates, it’s fighting disease in Africa; for George Soros, it’s kindling civic freedom in closed societies. To find Donald Trump, you have to slide considerably further down the social utility scale, to reality TV and, now, tea party demagoguery.

Is Trump a serious candidate? That’s an easy one: No. If he runs it will be to provide comic relief, which may be superfluous given the Republican Party’s already motley collection of odd, extreme and improbable presidential aspirants.

A tougher question: are Republicans a serious political party? That America’s vulgarian-in-chief can so easily vault to the top of early polling suggests a fatal GOP weakness for noisy celebrity over political substance.

Continue reading at Politico

Response to Michelle Malkin: AmeriCorps Supports Conservative Values, Too

Self-styled conservative pundit Michelle Malkin just published a column on National Review Online that places politics over facts to slam an innovative public/private, faith-based/secular partnership that is effectively fighting domestic hunger across the United States.

She argues that it is wrong to use participants in the AmeriCorps national service program to help low-income families, children, and seniors obtain food stamps benefits, which she derides as “welfare.” Yet Malkin purposely omits key facts that would help the public understand that many components of both the AmeriCorps Program and the Supplemental Nutrition Assistance Program (SNAP) – the current name for what used to be called the Food Stamp Program – advance conservative principles.

Let’s start with the idea of national service, which engages Americans in domestic community service, usually through non-governmental nonprofit groups. Participants receive a small living stipend, but don’t receive a penny unless they work hard. If they successfully complete a full term of service, they receive an educational scholarship, but again, only if they do the work and do it well. It is no wonder then that, in the late 1980’s, when the Democratic Leadership Council and the Progressive Policy Institute (two organizations generally affiliated with the conservative/moderate wing of the Democratic Party and for whom I worked) proposed the idea that would become AmeriCorps, it was traditional liberals who were the staunchest opponents of the program, saying it was wrong to tie government benefits to work requirements.

In 1990, arch-conservative William F. Buckley, the founder of the National Review, wrote an entire book (Gratitude: Reflections on What We Owe to Our Country) promoting a government-funded system of national service, in which most of the money would be controlled by the states and participants would be provided a small living allowance. That’s exactly how AmeriCorps works today. Buckley went as far as to say that Americans who chose not to give back to their country by serving in such a program would be “contemptuous of their heritage and ungrateful.” He predicted that most conservatives would eventually embrace the idea because a “natural conservative sense of duty and of reverence for tradition will gradually win over most conservatives.”

It is ironic indeed that an idea championed by conservatives and derided by liberals is now lambasted as some sort of so-called example of liberalism run amuck.

In reality, most AmeriCorps funding decisions are made by states. Conservatives who are consistent about supporting federalism should embrace this program. All AmeriCorps benefits are made contingent upon work. Conservatives who are consistent in their claim that work should be the centerpiece of social policy should herald AmeriCorps as a best practice.

The most egregious misinformation in the Malkin piece is her implication that the national AmeriCorps benefits outreach program she is slamming is managed directly by the federal government and funded only by the federal government. It is not. In fact, it is run by the organization I manage, the New York City Coalition Against Hunger, a 501(c)3 nonprofit group, in conjunction with nonprofit groups and faith-based organizations around the country. (For the record, I am writing this response using non-governmental funds.) While most of the funding is federal, significant matching funds have been provided by the Walmart Foundation and the Trinity Church Wall Street in New York City. Conservatives who are consistent in their desire to buttress non-government entities should hold up AmeriCorps as a shining example.

Malkin derides religious organizations working with the government on SNAP outreach as “left wing,” but the reality is that our AmeriCorps outreach program is working with mainstream Protestant, Catholic, and Jewish groups. Our partners include the Presbyterian Hunger Program, Baylor University, and the Jewish Federation of Los Angeles. Conservatives who are consistent in their support for faith-based partnerships should run to the hilltops to praise this program.

Moreover, it’s absurd to claim that helping our hungry neighbors, including seniors and children, obtain food is somehow “left wing.” Given that mandates to do so are central commandments of the Old Testament, the New Testament, and the Qur’an, I would think that self-proclaimed religious people, such as Malkin, should promote, not deride, such efforts. After all, it was Jesus Christ himself (in Matthew 25) who said that helping the poor and hungry obtain food was just as holy as feeding the Lord.

I must also point out that, in some fundamental ways, the SNAP program is a conservative approach to fighting hunger. SNAP benefits are, first and foremost, wage supports, helping make low-income work a better way to support a family than receiving cash welfare. In fact, people who have left welfare are less likely to return if they receive SNAP. That is why many conservative governors have promoted SNAP access even as they continue to reduce their welfare rolls. Even President George W. Bush’s Administration made it clear that SNAP was a work support, not welfare. In fact, the Bush Administration’s USDA Under Secretary Eric Bost once said, “I assure you, food stamps is not welfare.” Yet because the term “welfare” sounds so much more nefarious than the accurate term “nutrition assistance,” Malkin uses it over and over again to inflame her audience.

SNAP is the ultimate voucher program, allowing families to use government funds to shop at private stores. Unlike truly liberal countries like India or Brazil where government food programs direct low-income families to government-run food warehouses, SNAP is now distributed entirely through the U.S. private enterprise system. Every government dollar spent by taxpayers on SNAP creates 1.8 dollars in private economic activity. Conservatives who are consistent in their support of vouchers should highlight the effectiveness of SNAP.

To be sure, AmeriCorps also bolsters the traditional liberal goals of increasing economic opportunity and expanding educational access. But there is no question that it also supports the traditional conservative goals of rewarding work and strengthening communities.

Likewise, outreach to increase SNAP usage advances the traditional liberal goal of reducing poverty. But there is no doubt that it also reinforces the traditional conservative goal of strengthening families.

If we want to live in a country that exists in a state of perpetual political warfare – in which we automatically denounce anything supported by our political opponents – then it makes sense for some people to reflexively oppose AmeriCorps and SNAP just because their opponents support them.

But if we want to live in country where Americans come together to solve major problems based on shared values – as the vast majority of Americans do – then we should all embrace efforts such as AmeriCorps. Our national service program, fighting hunger with a mix of federal and private funds, working with both secular and religious non-profit groups, represents the best of middle-of-the road American tradition. It deserves all Americans’ consistent support.

cross-posted from New York City Coalition Against Hunger

Lobbyists and Corporations Have Too Much Power?

I’ve been mulling over a Gallup Poll that came out this week on who has too much power. You probably won’t be surprised to hear that majorities of Americans think that the following three groups have too much power: lobbyists (71 percent); major corporations (67 percent), banks and financial institutions (67 percent). The assessments are remarkably bipartisan.

But the poll also reflects a broader distrust of power in institutions generally, and poses a challenging puzzle: how do you reduce the power of one set of institutions without raising the power of another set of institutions with potentially opposing interests? My view is that you can’t, and Americans need to face up to that sooner or later.

First off, it’s worth noting that the poll results are nothing new. If you look at National Elections Studies polling, you’ll find that since the mid-1980s, solid majorities of Democrats, Republicans, and Independents (65-70 percent) have been convinced that government is run for the benefit of a few big interests, with the one exception being that for a few brief years under George W. Bush (2002 and 2004), only about 40 percent of Republicans thought this way.

Arguably, one of the reasons that corporations appear to have so much power is that they are incredibly well-represented in Washington by lobbyists. I’ve calculated that for every one lobbyist representing a union or public interest group, there are now 16 lobbyists representing business interests, up from about a 12-to-1 ratio in 1981 (still pretty high). Of course, this conflates the power of corporations and lobbyists, and banks are a subset of corporations. However, I think it’s a fair conflation.

But the thing about power is that it’s relative. In a Madisonian view of American democracy, the most effective way to deal with powerful “factions” (Madison’s term for special interests) is to empower other factions that have opposed interests, in the hope that out of the rough-and-tumble clash, something that resembles the public interest can emerge. Madison’s alternative would be to try to eliminate the power of one institution by stripping it of its rights to participate in the political process, which he rightly called this approach a “remedy…worse than the disease.”

So, if you think corporations, banks, and the lobbyists who represent them have too much power, following this logic means you need to empower another institution that could reasonably go head-to-head with these organizations, and in the process help to produce a better compromise outcome.

But here’s the thing about the American people: they’re skeptical of power from any institution. Gallup also asked whether various institutions in society didn’t have enough power. The organization that most frequently came up as having not enough power was the military, which is actually a bit frightening. But only 28 percent of respondents thought this. Other institutions that came close were unions (24 percent) and organized religion and churches (24 percent as well)

Unions, of course, are the most likely candidate to go head-to-head with corporations, but predictably, Republicans don’t like unions (69 percent they have too much power, 10 percent not enough); Democrats are more favorable to Unions (only 20 percent say the have too much power, as compared to 39 percent who think they don’t have enough.)

The federal government might also have the ability to go head-to-head with corporations and their lobbyists, if one believes the government is capable of acting as an independent entity. But not surprisingly, 75 percent of Republicans and 67 percent of independents think government has too much power, compared to just 34 percent of Democrats. Usually independents fall somewhere between the two parties on a given issue, so that fact that they are so strongly worried about the power of government should be a troubling sign for Democrats. Still, only 18 percent of Democrats (and 7 percent of Republicans and 4 percent of Independents) want to give federal government more power.

In many ways, the Tea Party Republicans share the same hopeful faith of Brandeis liberals of a century ago: that somehow we can return to an idealized America of small, local institutions, and thus avoid the concentration of economic power that inevitably leads to political power. (Of course, it’s worth noting that Republicans didn’t exactly jump on an amendment to limit the size of big banks when it was offered last year to the Dodd-Frank Bill.)

The reality remains that until we come up with reasonable ways to offer countervailing forces to balance out the influence that large corporations and their lobbyists have in Washington, the “too much power” numbers will remain high, as will the perception that Washington is only working for a few big interests. Unions may not be the right way to do this, and expanding the government may not be the right way to do this either. But we ought to come up with something smarter than nostalgically hoping for a return to some Edenic past.

A Better Charter School Debate

Charter schools are a hot topic in many states this spring. But as New York City knows well, the debate quickly falls into a predictable rut, with partisans wrangling over the virtues and vices of charters themselves.

Here’s a much more promising focus: How can we dramatically expand students’ access to the nation’s best charter schools? While many charters do no better than district-run public schools, a subset of charters – perhaps 10% – produces extremely high levels of learning and college-going by disadvantaged children who enter school years behind.

Continue reading at the New York Daily News:

Obama Reframes the Fiscal Fight

Entering the lists at last, President Obama delivered a stout defense of progressive values yesterday and checked the rightward drift of the deficit debate. For all its strengths, though, his speech also left open the question of whether he and his party are ready to grapple effectively with surging health and entitlement costs.

Obama started with a history lesson. As the Tea Party harks back to 19th century conceptions of limited government, he reminded Americans that the nation’s progress since then has been built upon a pragmatic synthesis of free enterprise and progressive governance. The extent of public activism required to create optimal conditions for shared prosperity is always a legitimate matter of debate, but the basic need for it shouldn’t be.

By insisting that deficit reduction leave room for strategic public investments in scientific research, modern infrastructure and education, Obama underscored a vital distinction that was being lost in the scramble to cut government spending: Reducing budget deficits is integral to reviving America’s economic dynamism. For most Americans, the priority is to get our economy moving again, not shrink government.

Obama also pushed back hard against Rep. Paul Ryan’s delusional budget, which asserts that the America’s path back to fiscal responsibility entails 100 percent spending cuts and 0 percent tax increases. In endorsing (finally!) his own fiscal commission’s plan, the president has set up a clear choice between the GOP’s fanatical devotion to shielding the rich from higher taxes and a bipartisan approach that exempts no one from sacrifice.

The president’s confident rejection of GOP tax dogma left House GOP Whip Eric Cantor sputtering. He was reduced to repeating the ridiculous Republican mantra that asking the wealthy to pay higher taxes is tantamount to killing America’s small businesses. Please Eric, bring it on: this is a debate progressives can win.

But Obama can’t just win debates. He needs to preside over passage of a comprehensive deficit-reduction package that, in a divided government, can only be achieved on a bipartisan basis. If he wants moderate Republicans to play on raising revenues – and a few intrepid souls like Sens. Tom Coburn and Saxby Chambliss have begun to do – he is going to have to convince Democrats to play on entitlement reform.

Here his speech fell short. Clearly mindful of President Clinton’s success in rallying the pubic behind his plans to protect Medicare and Medicaid during the 1995-96 budget battle, Obama categorically ruled out structural changes in how government finances those programs. That could prove to be a mistake.

It’s one thing for Democrats to reject the size of Ryan’s proposed cuts in the big public health care programs. But for both substantive and tactical reasons, they shouldn’t reject out of hand innovative devises to constrain entitlement costs.

It’s 2011, not 1996, and the baby boom retirement is underway, not over the horizon. This demographic surge, combined with health care costs that have been rising for decades faster than the economy has grown, are the real drivers of America’s debt crisis. To put a governor on the engine of federal health care spending, Ryan has proposed moving Medicare to a premium support model, and turning Medicaid into a federal block grant.

In his speech, Obama endorsed an alternative: strengthening provisions in his health reform bill to slow the unsustainable rate of health care cost growth. These provisions would encourage health providers to shift from fee-for-service to fixed fees for bundled services or capitated payments, which reward the value rather than volume of care delivered. These and other Obamacare provisions, including the independent commission set up to explore efficiencies in Medicare, are all good ideas. But even if they work, it will take a very long time for them to reach the scale necessary to break the back of medical inflation.

In the meantime, we need to protect public budgets from surging health care costs that threaten to soak up every dollar of revenue raised by 2040. If premium support and block grants are ruled out – even though some prominent liberals and Democrats have long supported one or the other — progressives need to come up with an alternative.

The political “grand bargain” Obama must strike couldn’t be clearer. It’s embedded in the fiscal commission plan: GOP support for raising revenues in return for Democratic support for constraining public health care and retirement costs. As the political action now shifts to the Senate, Obama needs to challenge his own party too.

Time To Target Qaddafi’s Stuff

NATO’s current strategy has effectively reached the end of its road. Divisions between member states, anti-Qaddafi forces, and the alliance’s command structure, plus Qaddafi’s forces’ adopting altered tactics, suggest that it’s now time to go after the Libyan leader’s personal pressure points if NATO wants to compel him to step down. Hitting Qaddafi’s palaces, remaining military command centers, and sources of personal wealth may be necessary to convince him that Libya’s future is best without him.

The good news is that finding a Qaddafi-specific target set shouldn’t be construed as classic mission creep: as Qaddafi has adopted new mechanisms to attack and terrorize his own citizens in places like Misrata, NATO remains justified in using “all necessary measures” to protect them. It’s clear that the only way to do that is without Qaddafi.

Over the past ten days, fighting in Libya has essentially ground to a stalemate. After a furious seesaw along the coastal road between Ras Lanuf and the rebel stronghold of Benghazi, the front line has effectively settled somewhere west of Ajdabiya, which leaves but an uneasy 100 miles of cushion before reaching the de-facto separatist capital. The lone exception to this division is Misrata, further west still, where fighting continues.

Amidst the stalemate, the anti-Qaddafi forces have become anxious that NATO isn’t doing enough. One of the rebels’ highest military commanders, Abdul Fatah Younis, complained at a press conference last week that “NATO did not provide us what we need” and threatened to take the measure back to the UN Security Council. French Foreign Minister Alain Juppe and his British counterpart William Hague have echoed Younis’ calls this week, and called an emergency meeting in Paris today to discuss. From Juppe’s interview with French radio:

NATO wanted to take over military operations, and we accepted that. But it must play its full role. That is to say, it must prevent Qaddafi from using heavy weapons against the civilian population.
For its part, NATO says it’s doing just fine, thank you. Commanding Brigadier General Mark van Uhm countered that NATO has maintained a high operational tempo and is doing a “great job”, given resources.

Elsewhere, discord reigns: The Obama administration is content to stand at the ready, happily leading the initial wave before transitioning into a support role. Italy wants to arm the rebels. Sweden, UAE, and Qatar are supplying planes but possibly with restrictions on what they can do. And the African Union, full of leaders purchased by Qaddafi’s petro-power, have offered a non-starter of a peace-plan.

Clearly there’s a disconnect: The rebels, France, the UK, and Italy want NATO to do more absent a consensus on what; NATO insists it is being successful; and the US thinks it has done enough heavy lifting. All are correct to a degree, but are missing a key ingredient: Qaddafi.

By adapting to the new strategic realities, Qaddafi’s forces have modified their tactics. Rather than charge headstrong up the coastal road in easily identifiable tanks, the Qaddafistes have begun to rely on more concealable methods such as ambushes, snipers, and mortar fire. These tactics don’t permit for a full offensive towards Benghazi, but do provide just enough firepower to sow chaos amongst civilians while being small and hidden enough to evade NATO strikes from above.

Qaddafi has clearly retained enough firepower to kill civilians — particularly in Misrata — as report after report continue to indicate. Arming the rebels remains an unsure prospect — the time to train and deploy heavier armaments may be too long for them to be truly effective. Covert teams, authorized by the Obama administration, seem to hold out the best prospect for success by identifying key targets closely associated with Qaddafi, his family, and his wealth. NATO is left with little choice but to target the source of the chaos and destruction if it is to bring such a tragic scene to its conclusion.