Monday, March 9, 2009

90 Percent Tax Rate Proposed

90 Percent Tax Rate Proposed, by Hans Bader
Open Market/CEI, March 07, 2009 @ 11:14 am

Excerpts:

Congressman Jerry McNerney (D-California) has advocated raising marginal tax rates to 90 percent. Such a tax increase on the wealthy would be necessary, but not sufficient, to pay for the vast spending increases proposed by the Obama Administration, if it is to keep its promise not to raise taxes on those making less than $250,000 per year. Indeed, it would not raise enough money, since there simply are not enough wealthy people to pay for all the proposed spending.

In the National Journal, the disillusioned centrist Stuart Taylor, who once praised Obama, notes that Obama’s budget projections are based on bogus accounting, and would result in mushrooming deficits as far as the eye can see unless taxes are raised radically. Obama, he writes, “has been deceptive in basing his deficit projections on phantom expenditure cuts and wildly optimistic revenue estimates.” Moreover,

“The numbers don’t add up — and still won’t if and when, as seems almost certain, Obama ratchets up his so-far-fairly-modest new taxes on the top 2 percent. ‘A tax policy that confiscated 100 percent of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue,’ according to a February 27 editorial in The Wall Street Journal. ‘That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable ‘dime’ of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.’

As for the budget’s $2 trillion in projected net “savings,” Obama’s budget director, Peter Orszag, admitted in testimony on Tuesday under questioning by Rep. Paul Ryan, R-Wis., that $1.6 trillion comes from phantom cuts of the money that would be needed to sustain the troop surge in Iraq for another decade — money that nobody ever intended to spend.

Other supposed savings — especially from Medicare — seem unlikely to materialize absent benefit cuts, which Obama has not proposed. And the cost of any health care legislation — to be drafted largely by a Congress that is allergic to the kind of cost-cutting necessary to make universal care sustainable — is likely to be two or three times the $634 billion over 10 years that Obama has budgeted.”

‘Manchurian Candidate’ Starts War on Business: Kevin Hassett

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=amhpOT5rlR1Y

March 9 (Bloomberg) -- Back in the 1960s, Lyndon Johnson gave us the War on Poverty. In the 1970s, Richard Nixon launched the War on Drugs. Now that we have seen President Barack Obama’s first-year legislative agenda, we know what kind of a war he intends to wage.

It is no wonder that markets are imploding around us. Obama is giving us the War on Business.

Imagine that some hypothetical enemy state spent years preparing a “Manchurian Candidate” to destroy the U.S. economy once elected. What policies might that leader pursue?

He might discourage private capital from entering the financial sector by instructing his Treasury secretary to repeatedly promise a brilliant rescue plan, but never actually have one. Private firms, spooked by the thought of what government might do, would shy away from transactions altogether. If the secretary were smooth and played rope-a-dope long enough, the whole financial sector would be gone before voters could demand action.

Another diabolical idea would be to significantly increase taxes on whatever firms are still standing. That would require subterfuge, since increasing tax rates would be too obvious. Our Manchurian Candidate would have plenty of sophisticated ideas on changing the rules to get more revenue without increasing rates, such as auctioning off “permits.”

These steps would create near-term distress. If our Manchurian Candidate leader really wanted to knock the country down for good, he would have to provide insurance against any long-run recovery.

There are two steps to accomplish that.

Discourage Innovation

First, one way the economy might finally take off is for some entrepreneur to invent an amazing new product that launches something on the scale of the dot-com boom. If you want to destroy an economy, you have to persuade those innovators not even to try.

Second, you need to initiate entitlement programs that are difficult to change once enacted. These programs should transfer assets away from productive areas of the economy as efficiently as possible. Ideally, the government will have no choice but to increase taxes sharply in the future to pay for new entitlements.

A leader who pulled off all that might be able to finish off the country.

Let’s see how Obama’s plan compares with our nightmare scenario.

Treasury Secretary Timothy Geithner has been so slow to act that even liberal economist and commentator Paul Krugman is criticizing the administration for “dithering.” It has gotten so bad that the Intrade prediction market now has a future on whether Geithner is gone by year’s end. It currently puts the chance of that at about 20 percent.

No More Deferral

On the tax hike, Obama’s proposed 2010 budget quite ominously signaled that he intends to end or significantly amend the U.S. practice of allowing U.S. multinationals to defer U.S. taxes on income that they earn abroad.

Currently, the U.S. has the second-highest corporate tax on Earth. U.S. firms can compete in Europe by opening a subsidiary in a low-tax country and locating the profits there. Since the high U.S. tax applies only when the money is mailed home, and firms can let the money sit abroad for as long as they want, the big disadvantage of the high rate is muted significantly.

End that deferral opportunity and U.S. firms will no longer be able to compete, given their huge tax disadvantage. With foreign tax rates so low now, it is even possible that the end of deferral could lead to the extinction of the U.S. corporation.

If any firms are to remain, they will be festooned with massive carbon-permit expenses because of Obama’s new cap-and- trade program.

Importing Drugs

Obama’s attack on intellectual property is evident in his aggressive stance against U.S. pharmaceutical companies in the budget. He would force drug companies to pay higher “rebate” fees to Medicaid, and he included wording that suggests Americans will soon be able to import drugs from foreign countries. The stock prices of drug companies, predictably, tanked when his budget plan was released.

Obama will allow cheap and potentially counterfeit substitutes into the country and will set the U.S. price for drugs equal to the lowest price that any foreign government is able to coerce from our drugmakers.

Given this, why would anyone invest money in a risky new cancer trial, or bother inventing some other new thing that the government could expropriate as soon as it decides to?

Finally, Obama has set aside $634 billion to establish a health-reform reserve fund, a major first step in creating a universal health-care system. If you want to have health care for everyone, you have to give it to many people for free. Once we start doing that, we will never stop, at least until the government runs out of money.

It’s clear that President Obama wants the best for our country. That makes it all the more puzzling that he would legislate like a Manchurian Candidate.

(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He was an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.)

To contact the writer of this column: Kevin Hassett at khassett@aei.org

Belief in conspiracy theories and government cover-ups

Are Americans Superstitious? By Karlyn Bowman
A small number of survey questions point to something worrisome: a belief in conspiracy theories and government cover-ups.
AEI, Monday, March 9, 2009

Officially, the term "ides" refers to the 15th day of certain months in the old Roman calendar. But March 15 has a special, inopportune significance--as every reader of Julius Caesar knows.
In an attempt to quantify how superstitious Americans are, pollsters have explored our beliefs about prophecies like the soothsayer's warning about Caesar's imminent death. They've also studied what we think about all things supernatural and fantastical.

Gallup began a battery of questions this way: "Some people are superstitious and try to behave in such a way as to avoid bad luck or jinxing themselves, and others are not. How superstitious are you?" One percent of respondents admitted to being very superstitious, 24% somewhat so, 28% not very and 47% not at all.

The follow-up questions revealed that around a quarter of us are superstitious about knocking on wood, 13% about a black cat crossing a path, 12% about walking under a ladder, 11% about breaking a mirror, 9% about the number 13--and 9% of respondents believed that speaking ill of a person makes it come true.

A small collection of questions on paranormal phenomena exist in the survey archives. Again, turning to Gallup's findings, 63% of respondents to one poll indicated they believe in déjà vu.
In questions asked in 1996 and then a decade later, slightly more than four in 10 believed in ESP, around 30% in telepathy and about a quarter in clairvoyance. Sixty percent said they had had the feeling of déjà vu, and 18% in another question said they had felt they were in touch with someone who had already died.

In November, Harris updated a broader question about "various things some people believe in." Substantial majorities believed in God (80%), miracles (75%) and heaven (73%)--to name just a few of the religious items the polling firm included. But significant numbers also believed in ghosts (44%) and witches (31%). The responses have held steady since Harris first asked the questions in 2005.

In a Gallup question, a third said houses could be haunted, 16% said they had been in such a house and 9% said they had been in the presence of a ghost.

Just 31% told Harris interviewers they believed in astrology, but in answer to a National Opinion Research Center question, a much larger proportion, 57%, admitted having read a horoscope or personal astrology report. Thirty-one percent said they thought astrology was "very" or "sort of" scientific. Seventeen percent told Gallup surveyors they had consulted a psychic or fortune teller.

Responding to a question from Yankelovich, a third said they believed intelligent beings from other planets have visited the U.S. In Harris' survey, 36% of people surveyed believed in UFOs, 25% weren't sure and 39% didn't believe.

These beliefs seem relatively harmless in the grand scheme of things--but a small number of survey questions point to something more worrisome: a belief in conspiracy theories and government cover-ups.

Sixty percent or more of respondents in six surveys taken by different polling organizations between 1988 and 2003 believe there was an official cover-up to keep the public from learning the truth about John F. Kennedy's assassination. Eighteen percent answered a Scripps Howard and Ohio University question from 1997 saying they thought it was very likely the government had been involved in the assassination of JFK, and another third found this somewhat likely.

After the Air Force issued a report in 1997 saying people who reported seeing UFOs and bodies of aliens in Roswell, N.M., actually saw the remains of weather balloons that were part of military experiments, nearly four in 10 told Fox News/Opinion Dynamics pollsters that the Air Force was covering up the UFO crash. A third told Gallup aliens had actually landed.

Further, nearly half of that poll's respondents say the government covered up information about the Waco, Texas, fire in 1993, in which 74 people died, and about the real cause of TWA Flight 80's crash over the Atlantic in 1996. In two other polls, 9 and 4% said the federal government bombed the federal building in Oklahoma City in order to blame extremist groups.

These deep suspicions--and the others many Americans hold--may reflect historical concern about federal government power. But, especially around the Ides of March, they are unsettling nonetheless.

Karlyn Bowman is a senior fellow at AEI.

Brookings Institute: Put Earmarks in Perspective

Put Earmarks in Perspective. By Thomas E. Mann
Brookings Institute, Mar 06, 2009

March 06, 2009 — It is hard to take seriously a political opposition whose major antidote to the most serious and frightening financial and economic crisis since the Great Depression is a rhetorical crusade against congressional earmarks.

Sen. John McCain took to the Senate floor Monday to unleash his fury at the 9,000 earmarks — “wasteful, disgraceful, corrupting ... pork barrel spending” — that are included in a $410 billion omnibus spending bill for the current budget year. McCain was particularly incensed that President Barack Obama decided not to veto this legislation in spite of his campaign promise to reform the earmark process and go through the budget line by line to make sure we’re not spending money unwisely.

McCain has long been a passionate opponent of congressional earmarks, and his jeremiads against them never fail to stir a public whose level of trust in government to spend its tax dollars wisely has never been lower. And there is merit to much of what he says. The number and cost of earmarks exploded in the late 1990s and early 2000s. New lobbying shops, often working on commission for private contractors and local governments, used their experience on Capitol Hill and access to policymakers to deliver projects outside of the regular grant-making and contracting processes, threatening the quality of resource allocation. Standards for scrubbing earmark requests in the appropriations committees declined. Campaign fundraising took on aspects of pay-to-play systems for those seeking earmarked projects. On occasion, this descended into criminal quid pro quo exchanges.

The excesses of earmarking have been acknowledged and addressed in the past several years. Most important, new transparency measures were adopted to make possible public accountability. Members of Congress will be increasingly sensitive to the potential political costs as well as benefits of directing project funds to those who pay to play. In addition, the congressional leadership has stopped the precipitous growth of earmarks and begun to reduce their number and cost. Both of these developments — increasing transparency and declining volume — should and almost certainly will continue as work begins on the 2010 budget. An increase in the Department of Justice public corruption investigation budget would also help discipline the most egregious abusers of the earmarking system.

But dramatic calls for an abolition of earmarks, by law or presidential veto, are futile and counterproductive. Congress has the constitutional power of the purse and legitimately defends its authority to allocate public resources. Given the enormity of the economic and financial problems facing the country, Obama would be foolish to engage Congress in a battle over earmarks.

Earmarks constitute less than 1 percent of the federal budget. In most cases, they don’t add to federal expenditures but merely allow Congress to direct a small fraction of program funding that would otherwise be allocated by formula or grant competition. Abolishing all earmarks would therefore have a trivial effect on the level of spending and budget deficits. While earmark reform and reduction is a worthy cause, it is a relatively minor one. It would do nothing to slow the rate of federal spending or improve our long-term budget outlook. Moreover, hyperbolic attacks on earmarks do a disservice to the public, encouraging people to concentrate way too much attention and energy on a largely symbolic issue and ignore the critical decisions that we face in the months and years ahead.

In an effort to stimulate an economy threatened by deflation and severe recession, federal spending will increase dramatically over the next several years. The challenge is to see that these new funds are expended in the most responsible way possible. Beefing up our public management capacity — in contracting, financial accountability, program evaluation — and developing oversight systems are the highest priorities. Same with efforts under way to stabilize the financial markets. Then there are the daunting challenges of designing and implementing new systems to restrain the cost and increase the coverage of health care and to shift to a low-carbon economy, to say nothing of grappling with a huge, long-term fiscal imbalance.

In this most threatening and challenging policy environment, it is time for earmarks to be put in their proper perspective and for politicians in both parties to get serious with the public about what really lies ahead.

Bangladesh: Consequences of the BDR Mutiny

Consequences of the BDR Mutiny, by Arvind Gupta
IDSA, March 09, 2009

The mutiny by the troops of Bangladesh Rifles (BDR) on 26 February 26 was extraordinarily brutal. The mutiny toll was about 81 with 72 still missing. Many of these were officers of the Bangladesh army. Three mass graves were discovered. Many bodies were thrown into the sewer pipelines. Many of those killed were stripped, mutilated, bayoneted and shot. The Director General of the BDR, Major General Shakil Ahmed was killed in cold blood. Even his wife was not spared. Her dead body was discovered in one of the mass graves. The whole nation has been numbed by the sheer scale of brutality of the mutiny which has been condemned internationally.

How could the mutineers indulge in such senseless killing over matters of pay and allowances and conditions of service? In brutality, the present mutiny compares with the 1975 murder of Sheikh Mujibur Rehman by some army officers.

The mutiny which was totally unexpected came at a time when the newly elected government, enjoying overwhelming majority in the parliament, was getting ready for the task of governance. Was the mutiny aimed at destabilising the government? Could the fundamentalist elements have been behind the rebellion?

The Prime Minister herself hinted at the possibility of a conspiracy. Several op-ed pieces in Bangladeshi media also spoke in a similar vein. There was nothing spontaneous about the mutiny. A spontaneous shoot-out would not kill so many people in so brutal a manner. A few of the suspected mutineers have been arrested. Only a thorough investigation would reveal the truth but there is growing suspicion that the incident may have been well planned and coordinated. If so, who were the perpetrators? What was their motive? Who was behind them? Was there an intelligence failure? Was DG, BDR the real target or someone else? Who were the real targets? These are some of the troubling questions for which answers will have to be found to set speculation to rest.

What will be the consequences of this tragic event? Firstly, the BDR may have to be restructured; the broken chain of command will have to be restored. The government has appointed Brig Gen Moinul Hossain as the new chief of BDR. His job will be to restore the confidence of the troops. This will be a tough task. The task at hand goes beyond redressing the grievances over pay and the conditions of service. If the anti-army sentiment in the BDR is deep and widespread, its disbanding may not be too extreme a step to contemplate.

Secondly, the relations between BDR and the Bangladesh army will be strained. The army has acted with great restraint and responsibility. It has lost a number of officers and soldiers at the hands of the mutineers. The trust that has been lost cannot be rebuilt overnight. Indeed it may never be restored. This is a dangerous precedent which will have long term implications for the country.

Thirdly, the government’s attention will necessarily be focussed on attending to the urgent matter of restructuring the BDR. This will detract its attention from the pressing problems of socio-economic development at a time when the global economic slowdown is having a negative impact on all countries including Bangladesh. The army has come out in support of the government’s handling of the situation. But one cannot ignore the fact that the army in Bangladesh has in the past been politicised. This time the army has suffered at the hands of the misguided soldiers of a sister force. The army’s response has been mature but the incident has introduced an element of uncertainty in civil-military relations in the country.

Fourthly, BDR was doing the important task of guarding the borders. It had close interaction with the Indian Border Security Force (BSF). Many units of BDR on the India-Bangladesh border were headed by the officers on deputation from the Bangladesh army. Some of these officers, according to reports, fled as the news of mutiny spread. India has reacted with restraint, describing the situation as Bangladesh’s “internal affair”. Nevertheless, the BSF would be hoping for an early return to normalcy as far as BDR is concerned so that the border guarding resumes on both sides. This will be in the interest of both countries.

Fortunately, Sheikh Hasina has overwhelming support in the country. This should help her deal with the problem in a confident manner. She will require the continuous support of the army. She has been praised for the “mature” handling of the situation but her decision to grant amnesty to the mutineers was controversial. The government had to clarify that those who committed murder will not be spared despite the amnesty. The long term effect of the amnesty on the morale and the functioning of the security forces may not be entirely positive. The situation in the country is fragile and can take an unexpected turn. South Asia is seeing signs of instability.

Dr. Arvind Gupta holds the Lal Bahadur Shastri Chair at the Institute for Defence Studies and Analyses, New Delhi. The views expressed here are his own.

WaPo: 'Direct diplomacy' with Iran and Syria starts small

A Toe in the Water. WaPo Editorial
'Direct diplomacy' with Iran and Syria starts small.
TWP, Monday, March 9, 2009; A14

THE OBAMA administration's opening forays into foreign affairs have been as calibrated and cautious as its domestic policy has been bold. Last month President Obama laid out a strategy for Iraq that tracked more closely with that recommended by the military commanders appointed by President George W. Bush than with his own campaign promises. Now Secretary of State Hillary Rodham Clinton has opened Mr. Obama's much-promised "direct diplomacy" with adversaries with a couple of low-level contacts with Syria and an invitation to Iran to join a multinational conference on Afghanistan. Ms. Clinton says that she is "testing the waters," and she has been appropriately guarded in her expectations. That's good: A bolder U.S. offer to either country would alarm U.S. allies in the region and probably be rejected.

During her first tour of the Middle East as secretary of state, Ms. Clinton got an earful from Arab rulers alarmed both by Iran's continued belligerence across the region and by the notion that a deal between Washington and Tehran might be in the works. "There's a great deal of concern about Iran in the entire region," she said after three days of talks; a senior State Department official said that Ms. Clinton had expressed doubt in one of her private meetings that Iran would respond to a U.S. offer of engagement. That was only logical, given the latest tirade of Iranian supreme leader Ayatollah Ali Khamenei, who called Israel "a cancerous tumor," rejected Mideast peace negotiations and said that Mr. Obama was following the same "crooked path" as Mr. Bush. Ms. Clinton's suggestion that Tehran participate in the Afghanistan conference came on a front where the two countries have collaborated in the past; Iran's initial response was positive.

The outreach to Syria seems more promising to many. Several former senior U.S. diplomats in the Middle East are saying that Bashar al-Assad's regime is eager to improve relations with the United States. Syria seeks an easing of U.S. economic sanctions and would also like to see U.S. mediation of peace talks with Israel. For its part, the administration wants Syria to curtail its material support for Hamas and Hezbollah; both the United States and Israel dream of rupturing Syria's alliance with Iran.

There are big and probably insurmountable obstacles to any such breakthrough. Mr. Assad heads a murderous regime; a United Nations tribunal was established last week to consider political murders in Lebanon that most likely were authored in Damascus. Mr. Assad continues to seek hegemony over Lebanon, something that the United States should not countenance. Israel's next government will probably be led by Binyamin Netanyahu, who promised immediately before his election that he would not return the occupied Golan Heights to Syria.

Yet the Obama administration, Syria and Israel may all benefit by engaging even in negotiations that go nowhere. The appearance of better relations with the United States may attract more European investment and diplomatic support for Syria; it may also inject an irritant into relations between Syria and Iran. Mr. Netanyahu's unwillingness to discuss Palestinian statehood may draw him toward talks with Syria despite his pledges. Such modest movement may be all Mr. Obama can hope for from "direct diplomacy," at least in the short term.

Science Magazine: Remembering a Rare Energy Realism Essay (Best Article Award?)

Science Magazine: Remembering a Rare Energy Realism Essay (Best Article Award?). By Robert Bradley
Master Resource, March 8, 2009

Today, there is much more political science than science in the editorial content of the flagship publication of the American Association for the Advancement of Science. AAAS has become just another special-interest, at the trough of special government favor. So why not, for example, tilt toward exaggeration on big-money research issues like the prospective impact of the human influence on climate?

Recent evidence of the political nature of the scientific community was produced when Al Gore received a standing ovation at the conclusion of his presentation at the annual convention of AAAS in Chicago. Yet Gore has gone far beyond mainstream science to sound the climate alarm, and scientists know it. They just like his politics, because it allows them to act as rent-seekers rather than truth-seekers. Roger Pielke Jr. has blogged on this unfortunate particular episode.

It is also hard for the energy realists to break into the pages of Science, either in the articles or letters section—a subject for another day. But now and then, energy realism breaks through. And in the name of such realism, I want to honor this article as one of the best ever in Science (yes, it is seven years old):

Martin Hoffert et al., “Advanced Technology Paths to Global Climate Stability: Energy for a Greenhouse Planet,” Science, November 1, 2002, available here.

Provided below are some quotations from this essay that remain relevant to today’s debate over energy sustainability and climate-change public policy.

CO2 is a combustion product vital to how civilization is powered; it cannot be regulated away (p. 981).

Paradoxically, Kyoto is too weak and too strong: Too strong because its initial cuts are perceived as an economic burden by some (the United States withdrew for this stated reason); too weak because much greater emission reductions will be needed and we lack the technology to make them (p. 981).

Renewables are intermittent dispersed sources unsuited to baseload without transmission, storage, and power conditioning. Wind power is often available only from remote or offshore locations. Meeting local demand with [photovoltaic] arrays today requires pumped-storage or battery-electric backup systems of comparable or greater capacity (p. 984).

“Energy is critical to global prosperity and equity (p. 986).

All renewables suffer from low area power densities (p. 984).



Sound scholarship passes the test of time. This essay certainly qualifies.

Conservative views: The 'most transparent administration in history' buries a Gitmo report

Second Thoughts, by Stephen F. Hayes & Thomas Joscelyn
The 'most transparent administration in history' buries a Gitmo report
The Weekly Standard, Mar 16, 2009, Volume 014, Issue 25

At 12:01 P.M. on January 20, 2009, minutes before Barack Obama was sworn in as president, the first post went up on the Obama White House website. It included a reiteration of a campaign promise Obama repeatedly made: "President Obama has committed to making his administration the most open and transparent in history."

Two days later, Obama ordered the detention facility at Guantánamo Bay closed. And two days after that, on January 24, Newsweek's Michael Isikoff wrote about a Pentagon study that will provide an early test of this promise: "The report, which could be released within the next few days, will provide fresh details about 62 detainees who have been released from Guantánamo and are believed by U.S. intelligence officials to have returned to terrorist activities."

The report was not, in fact, released within the next few days. On February 2, Commander Jeffrey Gordon, the Pentagon spokesman who handles inquiries about Guantánamo, told us that the report would likely be released later that day. We were told to consult the website--defenselink.mil--that afternoon. No report. When we asked where it was, Commander Gordon wrote: "Nothing today, please check back with me in a couple days." We did. No report.

This pattern has repeated itself for a month. So what explains this failure to produce the report?

According to Gordon:

there may be a misunderstanding between when the updated threat analysis was delivered from DIA and the completion of an interagency review process prior to public release.

My understanding is that several requests have been received by our OSD FOIA office and it is being processed for a decision concerning release. If you would like to submit a FOIA request as well, below is a link for your convenience.

Right. So a report that was to have been released on February 2 was suddenly and inexplicably withheld.

The most transparent administration in history apparently realized that releasing a report about the recidivism of Guantánamo detainees could only complicate its effort to shut down the facility. The approximately 247 detainees still held there are the worst of the terrorists captured by the United States since 9/11. Those thought to have been low-risk releases have already been let go. And many of them turned out not to have been low-risk at all. Saudi Arabia recently published a list of its 85 most wanted terrorists; 11 of them had been detained at Guantánamo Bay.

Said Ali al-Shihri, who disappeared from his home in Saudi Arabia after spending months in a Saudi jihad rehabilitation program, recently showed up in a video posted on a jihadist website. He is now the deputy leader of al Qaeda's Yemeni branch, which bombed the American embassy in Sana'a in September 2008. That attack killed 13 civilians, as well as six terrorists.

Mohammed Naim Farouq was released from Gitmo in July 2003. In 2006, the Defense Intelligence Agency listed him as one of the 20 most wanted terrorists operating in Afghanistan and Pakistan.

Abdullah Saleh al Ajmi, a Kuwaiti, was detained at Gitmo, released, and then blew himself up in Mosul, Iraq, in March 2008. The attack killed 13 Iraqi soldiers and wounded dozens more.

Ibrahim Bin Shakaran and Mohammed Bin Ahmad Mizouz were both transferred from Guantánamo to Morocco in July 2004. In September 2007, they were convicted of being recruiters for Al Qaeda in Iraq.

These are detainees that the U.S. government determined were good candidates for release. The ones who remain in Guantánamo are not. "In some cases, we do know that they'll return to the battlefield because they've told us they will," says Juan Zarate, counterterrorism czar in the Bush White House.

The question for the new president and his advisers is what is an acceptable level of risk. "They may say 'These guys are dangerous but it's better than keeping them,' " says Zarate. But "the government needs to be very clear and honest about who these guys are and take any such step to release them with our eyes wide open."

Being clear and honest means sharing with Congress and the American public as much information as possible. Democratic senator Joseph Lieberman is calling for the report's release: "We know that a number of detainees who have been released have returned to the battlefield to attack Americans and American interests abroad. The American people need to know what is in the report so that Congress can make an informed decision on what to do with the detainees currently held at Guantánamo and with combatants captured in the future in the war on terror."

Even George W. Bush did better. In June 2008, the Pentagon released a partial list of recidivist Guantánamo alumni. Is it the case that the Obama administration, just six weeks in, is not even as transparent as the super-secretive Bush administration?

--Stephen F. Hayes & Thomas Joscelyn

A Hero's Welcome: Britain greets a Guantánamo detainee

A Hero's Welcome, by Janet Daley
Britain greets a Guantánamo detainee
The Weekly Standard, Mar 09, 2009, Volume 014, Issue 24

LondonWell, it wasn't quite Nelson Mandela's release from Robben Island, but the treatment was nearly as reverential. The news channels followed every detail of the progress of Binyam Mohamed, the first detainee released from Guantánamo by the Obama administration, from the moment it was solemnly announced that his plane had left the ground to return him to Britain--the country that had granted him asylum (but not citizenship) before his unfortunately timed journey to Afghanistan in June 2001--until the moment the private jet touched down at RAF Northolt in west London.

It was the works: minute-by-minute live coverage of Mohamed's deplaning, flanked by burly men who ushered him quickly to a waiting car. These proceedings were enlivened by an offstage chorus of demands from Labour MPs, human rights lawyers, and the liberal media that the government and the security services tell all they knew about Britain's alleged role in Mohamed's alleged torture at Guantánamo. A parade of activists, from the openly Trotskyite leaders of the Stop the War Coalition to the usual array of anti-American protesters and always-available legal experts, weighed in with speculation on everything from the released man's mental state after force-feeding during a hunger strike to the judicial implications of Britain's participation in torture.

Particularly notable was the psychologist who specialized in the study of torture victims. He had not met Mohamed, nor did he have any personal knowledge of the specifics of his case, but that did not prevent the BBC news presenter from engaging him in a lengthy discussion of the likely effects on Mohamed of the treatment he might or might not have endured at Guantánamo--which might or might not have involved the active assistance of the British security forces. The final exchange in this rather surreal dialogue went something like this:

BBC: Isn't it possible that a victim of torture could actually be radicalized by his treatment and led into terrorism, even if he had had no inclinations of that kind in the first place?

Psychologist: Oh yes. We often find that torture victims are so alienated by their experience that they turn toward active terrorism.

This speculative analysis is, of course, plausible. It just happens that neither the psychologist nor his inquisitor had the remotest idea whether it applied in any way to Mohamed. They were simply weaving a hypothesis. But the subtext of this flight of fancy is not insignificant: If Mohamed should, in the future, be found to be involved in terrorist activity, it will be argued not that this vindicates the U.S. decision to detain and interrogate him in the first place--but that he was radicalized by his (wrongful) detention and interrogation. So even if he turns out to be a terrorist, it'll be our fault.

By the time the main evening news came on, the BBC coverage had become a bit more skeptical. Judicious doubt was inserted into the accounts given by Mohamed himself and his eager legal team about the treatment he had received and his absolute conviction that British forces had been somehow complicit in it. But after another 24 hours, there was a new hyperbole in Mohamed's descriptions of his torture as "medieval" (the rack?) and an apparent acceptance by much of the media of his confident assertion of British involvement.

No one seemed inclined to ask the obvious question: If he believed so firmly that Britain had betrayed him ("Those I hoped would rescue me were allied with my abusers"), why was he so eager to return and make his home here? One sentence from the Guardian's coverage captures this paradox neatly: "Binyam was 'extraordinarily grateful to be back in Britain,' said [his lawyer] Stafford Smith, who said he had 'zero doubt' Britain was complicit in his client's ill-treatment."

How very strange: to be extraordinarily grateful to be back in a country which you believe to have helped to torture you. Now this is not inconceivable. People often have confused and contradictory emotional reactions to traumatic events. But it does seem odd that, in all the excitement of pursuing the British government over its possible engagement in torture, scarcely anyone has thought to raise this query.

Any doubts about the credibility of Mohamed's testimony were pretty well lost in the scrum of the early coverage. This story has everything: above all, anti-Americanism combined with the delights of British self-flagellation.

As one pundit put it, "Now that Binyam Mohamed has returned to the U.K. from detention at Guantánamo Bay, there must be quite a few Whitehall mandarins--not to mention some ex-ministers--who are wandering Westminster frantically trying to clean the blood from their hands." Bush and Blair meet Lady Macbeth: The image is irresistible.

Janet Daley is a columnist for the Daily Telegraph (London).

The International Criminal Court's attempt to bring Sudanese president Omar al-Bashir to justice backfires

Sudan's Day in Court, by Joseph Loconte
The International Criminal Court's attempt to bring Sudanese president Omar al-Bashir to justice backfires.
The Weekly Standard, Mar 06, 2009 12:00:00 AM

Brushing aside warnings of retaliations against vulnerable refugees, the International Criminal Court issued an arrest warrant this week for Sudanese president Omar al-Bashir for atrocities committed in Darfur. A three-judge panel charged Bashir with war crimes and crimes against humanity for playing "an essential role" in the murder, rape, torture, and displacement of thousands of civilians. Although it is important that an international body has moved against the Sudanese leader--a radical Islamist who has waged war against Christians in the south and Muslims who resist his rule in the north--the court's action is fraught with problems. Already it has exposed the moral liabilities of an international tribunal that lacks any means of enforcement.

For eight months European leaders have pushed for the arrest warrant against the Sudanese president, the first aimed at a sitting head of state. The Economist magazine called it "a pretty clear victory for international human-rights activists." Richard Dicker of Human Rights Watch said the decision "has made Omar al-Bashir a wanted man." Nicholas Kristof, columnist for the New York Times and Pulitzer-prize winner for his commentary on Sudan, saw the ruling as a "step toward accountability and deterrence." Fouad Hikmat of the International Crisis Group expected the court's action to prod the government "to engage the international community a bit more."

ICC enthusiasts should put away the champagne for now. Within minutes of the court's announcement, thousands gathered in Khartoum, the Sudanese capital, to denounce the decision. "We are telling the colonialists we are not succumbing," Bashir said. "We are not submitting. We will not kneel." Within hours, Bashir met with leaders of several humanitarian groups and ordered them to leave the country. Organizations such as Oxfam and Doctors Without Borders--which provide food and medical care for thousands of refugees in Darfur--are apparently being forced out of the region.

As aid workers explain, the Sudanese government despises international relief agencies operating in Darfur. Aid agencies have performed heroic work in keeping alive the very people Bashir and his janjaweed militias have tried to exterminate. Some groups have offered evidence of government-backed raids on refugee camps, embarrassing the regime. Equally important, the physical presence of aid workers has helped discourage attacks on civilians from government forces. "One of the humanitarian services we provide is protection through pressure," a relief worker told me. "That pressure through presence is suddenly gone, and there will be a lot of people vulnerable to attack."

Quite a lot, in fact. Since the civil war erupted in 2003, at least 300,000 people have died and about 2.7 million have been displaced. They live as internal refugees or in camps in Chad and the Central African Republic. They struggle to survive with inadequate sanitation, health care, and food. Women and young girls are often the victims of sexual assault. Humanitarian convoys already face attacks from soldiers, militias, bandits, and rebels. If relief organizations are kicked out of the area, thousands of civilian deaths could follow.

This is what political theorists mean by moral hazard: When a political decision, however just in intent, carries consequences that threaten to frustrate justice and further endanger innocent lives. Some diplomats and relief workers--let's call them moral realists--warned against the ICC's ruling for months. They predicted that Bashir would use the decision as a political rallying cry. They expected the government to expel aid organizations.

It appears that the realists were right. Utopian hopes in the irrepressible power of international edicts are colliding with stubborn facts on the ground. The court has no way to enforce its decisions, no police or military to arrest the accused. The Sudanese government has vowed to ignore the warrant. Although 108 countries are parties to the 2002 Rome Statute that established the court--the United States is not a signatory--many have little interest in apprehending Bashir if he were to set foot on their soil. African Union peacekeepers in Darfur, unable to offer much protection to refugees, have no authority to arrest the president. The international community shows no stomach for military action, such as protecting the "no fly" zones over refugee camps that are being bombed by Sudanese planes.

The upshot is that the International Criminal Court has handed the Sudanese dictator a means to strengthen his reign of terror. As an aid worker told me: "It has created an opportunity for him to pound Darfur and to punish his opponents." Even U.N. Secretary-General Ban Ki-moon, an ICC supporter, criticized the court's ruling as "a serious setback to lifesaving operations in Darfur." Critics fear that it also could disrupt the fragile peace agreement reached between the north and south in 2005.

What does this mean for the credibility of the International Criminal Court? Liberals remain obsessed with the United Nations and other international institutions as the sole repositories of moral authority. We are told that democratic governments--especially the United States, whose "international image" suffered under George W. Bush--lack the standing to challenge even the worst despots. The Washington Post's Colum Lynch summed up this attitude nicely, if unconsciously, in an interview on PBS's Newshour. He was asked whether the United States could press for Bashir's arrest: "It doesn't have the moral high ground to do that," he said, "because it's not a member of the court."

Allow the words to linger: It doesn't have the moral high ground because it's not a member of the court. Here is a presumption posing as an argument. Why should the International Criminal Court, a creature of the diplomatic delusions of European elites, represent the summit of moral wisdom on the world stage? Its judges are not subject to democratic checks and balances. It has yet to secure a successful prosecution. Even the court's supporters admit it has weak oversight provisions. Given its status as a U.N. body, the ICC risks being politicized and turned into a megaphone to excoriate U.S. foreign policy--the fate of the now discredited U.N. Human Rights Council.

There may be ways to prevent these unhappy outcomes for the ICC, but it's worth asking why there isn't an African solution to an African problem, especially the problem of genocide. This latest crisis in Sudan is also a religious crisis--a spiritual struggle within Islam. Most of the news reports this week somehow failed to mention it, but near the center of Sudan's heart of darkness is a violent strain of Islamist ideology. The conflict in Sudan is extremely complex, of course, involving a toxic mix of ethnic, tribal, racial, religious and economic motives. Rebel groups, mostly non-Arab, have felt marginalized from the nation's economic resources. Abuses against civilians have been committed by virtually all sides.

Yet there is little debate that the ideology of the Khartoum government--an Arab regime devoted to the violent imposition of Islamic law--has been a driving force behind the atrocities. It is not only the government that must be confronted, but its political theology.

It is not yet clear that the Obama administration, still finding its foreign policy footing, is prepared for this challenge. When asked at a press conference this week whether the United States would arrest Bashir if he entered the country (to attend a meeting at the United Nations, for example), State Department spokesman Gordon Duguid dodged the question. "Let's ask the lawyers to get us an answer on this so we are not speculating." So much for moral clarity. It will require better answers than that if, as the administration claims, the promotion of human rights is to be "central" to U.S. foreign policy. "I am looking for results," Secretary of State Hillary Clinton said at a State Department event last month. "I am looking for changes that actually improve the lives of the greatest number of people."

If saving and improving lives is the goal in Sudan, then the Obama administration will need to look beyond the International Criminal Court, and look quickly.

Joseph Loconte is a senior research fellow at the King's College in New York City and a frequent contributor to the THE WEEKLY STANDARD Online.

Sunday, March 8, 2009

Is Obama lazy? (Updated) Rick Moran - American Thinker

http://www.americanthinker.com/blog/2009/03/is_obama_lazy.html

All we're getting is whispers from the press, of course, A raised eyebrow here, a sad shake of the head there. But the picture that is emerging of Barack Obama, the executive, is not very flattering if you look between the lines.

Jennifer Rubin:

Well, it's becoming obvious he's not really much of a manager, decider, legislation-craftsman, or supervisor. His vetting process is in shambles and key Treasury slots are still vacant. His Treasury Secretary is a classic under-performer and Obama encourages that tendency by talking about everything other than our immediate recovery needs. He lets Nancy Pelosi and Harry Reid do the legislating - and they've come up with an embarrassing stimulus and an omnibus spending-bill even Democrats aren't swallowing.

What does he like to do? Summits. These are in essence campaign events - faux town-halls where nary a discouraging word is heard and no real work is done. And he loves those campaign rallies around the country.

So if the report is accurate that others are crafting his political strategy (just like the Pelosi-Reid machine is drafting his legislation), it should should come as no surprise. George W. Bush was lambasted for poor management skills and excessive delegation. But that was nothing - Obama has delegated the entire task of governing. He will keep the campaigning for himself.


Ed Lasky:
Failure as a community organizer (at least he admits that, to some extent) :
Lazy as an attorney-dedicated to promoting himself:

Miner's firm specialized in civil rights litigation and in representing not-for-profits. "The 'game of law' irritated [Obama] more than fascinated him," Miner says. "There are people who just like the game. Barack didn't like the game."

Allison Davis, a former partner in Miner's firm (and the son of a prominent U. of C. professor), occupied an office next to Obama's at 14 West Erie Street. "He spent a lot of time working on his book [Dreams from My Father]," Davis recalls. "Some of my partners weren't happy with that, Barack sitting there with his keyboard on his lap and his feet up on the desk writing the book."


I am sure his colleagues, other lawyers, who actually had to work killer hours to pay his salaries, appreciated his work ethic.
(BTW, he kept getting extensions on the deadline to submit a manuscript, then he flew off to the South Pacific to "work on it")
Failure as a Senator: A habit of claiming credit for work he did not do :


After weeks of arduous negotiations, on April 6, 2006, a bipartisan group of senators burst out of the "President's Room," just off the Senate chamber, with a deal on new immigration policy.

As the half-dozen senators -- including John McCain (R-Ariz.) and Edward M. KennedySen.. Barack Obama (D-Ill.), who made a request common when Capitol Hill news conferences are in the offing: "Hey, guys, can I come along?" And when Obama went before the microphones, he was generous with his list of senators to congratulate -- a list that included himself.

"I want to cite Lindsey Graham, Sam Brownback, Mel Martinez, Ken Salazar, myself, Dick Durbin, Joe Lieberman . . . who've actually had to wake up early to try to hammer this stuff out," he said.

To Senate staff members, who had been arriving for 7 a.m. negotiating sessions for weeks, it was a galling moment. Those morning sessions had attracted just three to four senators a side, Sen.. Arlen Specter (R-Pa.) recalled, each deeply involved in the issue. Obama was not one of them. But in a presidential contest involving three sitting senators, embellishment of legislative records may be an inevitability, Specter said with a shrug.

Unlike governors, business leaders or vice presidents, senators -- the last to win the presidency was John F. Kennedy in 1960 -- are not executives. They cannot be held to account for the state of their states, their companies or their administrations. What they do have is the mark they leave on the nation's laws -- and in Obama's brief three-year tenure, as well as Sen.. Hillary Rodham Clinton's seven-year hitch, those marks are far from indelible.
(D-Mass.) -- headed to announce their plan, they met.

And for being on a Committee he was not on and doing work he did not do (again):

Barack Obama today boasted about a bill in "my committee,'' a committee on which he has no seat.

While speaking to the press in the Israeli town of Sderot, Obama mistakenly put the U.S. Senate banking committee on his resume, although the Illinois senator does not serve on the committee and Sen. Chris Dodd (D-Conn.) is the chairman.

The Republican National Committee distributed an e-mail pointing out Obama's mistake with a subject line of "Obama's Gaffe Machine Rolls Into Israel."

During the press conference, Obama said, "Just this past -- this past week, we passed out of the U.S. Senate Banking Committee, which is my committee, a bill to call for divestment from Iran as a way of ratcheting up the pressure to ensure that they don't obtain a nuclear weapon."


Anyone see a pattern here? People overestimated him and he woefully undelivers-time and time again. No wonder he picked Geithner.

Moran's take:

Ed's evidence is compelling. I would add that during the early stages of the campaign, his "keepers of the body" - probably Axelrod at that point - overextended the candidate. His gaffes about 10,000 dead in a Kansas tornado came at the end of a long day of campaigning. They never made the same mistake again and limited his access to the press and reduced the number of events per day. This would seem to indicate the president doesn't have much stamina.

But he will continue to get a pass on this from the press unless the economy goes into free fall and still nothing much has been done.

UPDATE

Ed Lasky adds:

WaPo: Mr. Obama defunds the nuclear repository at Yucca Mountain. Now what?

Mountain of Trouble. WaPo Editorial
Mr. Obama defunds the nuclear repository at Yucca Mountain. Now what?
TWP, Sunday, March 8, 2009; A18

BY STRIPPING the funding for the nuclear repository at Nevada's Yucca Mountain, President Obama has succeeded in killing the contentious project that remains unfinished 22 years after Congress selected the site. He compounds the error by not offering an alternative. If the president's vision for a clean energy future is to be believed or is to come to fruition, nuclear energy must be a part of the mix, and the safe disposal of its radioactive waste must be given more serious consideration.

The project has burned through $7.7 billion. It was supposed to start accepting spent material from the nation's operating nuclear reactors (now numbering 104) in 1998. Our longstanding support of the Yucca Mountain facility has been grounded in the belief that the center of a desert mountain 1,000 feet underground and more than 90 miles northwest of Las Vegas was an appropriate place for the nation's nuclear waste. Instead, storage is spread over 121 above-ground sites located within 75 miles of more than 161 million people in 39 states.

There's more than a modicum of politics at play in Mr. Obama's decision. The president keeps a campaign promise to shut the site down. By doing so, he pleases Senate Majority Leader Harry M. Reid (D-Nev.). And he potentially secures the swing state's place in the blue column; the Silver State hadn't voted for the Democratic presidential nominee since 1996 until it went to Mr. Obama in 2008. That's not to belittle the concerns of Nevadans. There have been worries about radioactive seepage into groundwater. But scientists have long maintained that corrosion wouldn't threaten the integrity of the storage containers for at least 10,000 years.

Now that the Yucca Mountain project is dead the obvious question is: Now what? As a senator in 2007, Mr. Obama suggested in a letter to Mr. Reid and Sen. Barbara Boxer (D-Calif.), chair of the Environment and Public Works Committee, "finding another state willing to serve as a permanent national repository . . . ." He also called for redirecting resources to improve the safety and security at plants around the country until a long-term solution is found. Those alternatives, however unlikely the first one is, are more than he offered when he cut off Yucca Mountain's funding.

In the coming weeks, Energy Secretary Steven Chu will announce plans for a meeting with key stakeholders to discuss nuclear waste storage. A report is expected within a year of the meeting. The Nuclear Regulatory Commission says the dry cask storage of nuclear waste currently employed is a safe short-term solution. Thankfully, "short-term" in this case is defined in decades. But until the Obama administration comes up with a real alternative, the president's promises that nuclear power will be a part of our clean energy future will remain unkept.

Saturday, March 7, 2009

ExxonMobil’s Tillerson on Renewable Energy: Realism amid Politics

ExxonMobil’s Tillerson on Renewable Energy: Realism amid Politics. By Robert Bradley
Master Resource, March 7, 2009

As reported by Russell Gold at Environmental Capital, ExxonMobil CEO Rex Tillerson has made an incisive new argument against his company’s investing in government-dependent renewable energy.

“If I wanted to kill [tax subsidies], the thing to do is for Exxon Mobil to go and invest heavily in them and then Congress would immediately cancel the tax subsidy. Actually what they would do is they would just cancel it for us,” said Mr.Tillerson, during the annual analyst meeting at the New York Stock Exchange.

He added: “In reality, that is what I fear would happen. So we are not going to go into investments that are dependent on a government providing a tax system to make them viable.”

This is very interesting. Former ExxonMobil CEO Lee Raymond and now Tillerson have argued against investing in politically dependent renewables because they have been-there-done-that, with investor losses in the 1970s. And looking at the present and future technology of wind and solar relative to what ExxonMobil can realistically add, they are not sanguine about going forward in the same area.

But Tillerson is now saying something new: If ExxonMobil were to enter the wind and solar market, then a clause in any new legislation could exclude the oil major from getting the production tax credit.

Say the venture is profitable on a bed of special government favor. The green scream would that the “polluter” is using profits from the “clean side” to subsidize the “dirty side.” Therefore, each company—perhaps of a certain size—should be subject to an “average emission test” under which taxpayer subsidies cannot be received if its overall energy production contains too much greenhouse-gas-emitting (oil and coal) energy production.

Thinking ahead in this way, a “green” strategy would be to get a company “hooked” on subsidies and then ratchet up the pressure on that firm to reduce its legitimate, consumer-driven, core energy activities. ExxonMobil is just smart enough to sniff this one out.

Russell Gold’s post continues:

Putting aside Mr. Tillerson’s dark commentary on how unpopular the company is in Washington D.C., he raises a point investors might want to consider.

Renewable energy has a lot of promise and hype, but it still needs government support. It is clearly getting that support today, but how long will the government policy underwrite renewable energy? How long will it be able to afford to underwrite renewable energy? How long will voters support green initiatives that create extra costs during this prolonged economic downturn?

This is good journalism reporting a worthy corporate stance—a rare one-two in today’s politicized discourse over energy policy.

What a great moment for free-market capitalism’s principled entrepreneurship, ™ when so much of corporate America is involved in political capitalism. Is there any doubt that ExxonMobil would be Adam Smith’s favorite company? It is certainly the consumer’s friend and the taxpayer’s friend.

Compare Raymond and Tillerson to the political entrepreneurs of the energy field such as the late Ken Lay (Enron), the disgraced John Browne (BP), and the value destroyer T. Boone Pickens (Mesa Petroleum, BP Capital). The best can still win in corporate America.

Perversely, for the second year in a row, a group of Rockefeller descendants are backing a shareholder resolution to have ExxonMobil invest in renewable energy, as reported in the Wall Street Journal. My response to this is: “Don’t Enron Exxon.” (Enron left its natural gas core to invest in solar, wind, energy efficiency, and so forth, with uniformly bad results.) The disgruntled heirs of John D. have the energy sustainability vision of Ken Lay. They should not only leave well enough alone, they should rethink their whole political philosophy and applaud the management of what is now America’s star company.


Postscript: The Fall of General Electric

Which brings up the sad tale of another company. Once in a league with ExxonMobil, General Electric is badly wounded because of mismanagement. I remember back in my Enron days when I took a phone call from GE Capital (my bosses were busy). The caller said that GE was considering adopting a company policy of no longer financing coal projects.

Corporate social responsibility, no doubt. Never mind that coal is middle-class energy and that climate alarm was and is exaggerated. Rather than focusing on consumers, GE was playing the political correctness game, as it was when it purchased Enron Wind Corporation, now GE Wind. Evidently, such form-over-substance promiscuity (the Enron disease) later spread to other areas at GE Capital.

Weekly Address: Toward a Better Day

Weekly Address: Toward a Better Day
White House, Saturday, March 7th, 2009 at 6:00 am

In his March 7th weekly address, the President capped off a busy week in Washington remarking on new lending guidelines aimed at lowering mortgage payments; an initiative to generate funds for small business and college loans; the release of his administration's first budget which includes $2T in deficit reduction, and the start of long overdue health care reform.

Transcript

More Doubts on “Green Jobs”

More Doubts on “Green Jobs”, by Robert Murphy
Master Resource, March 6, 2009

As time passes, the skepticism grows about the ability of government funding for “green jobs” to simultaneously (a) pull the economy out of recession and (b) reduce the risk of climate change. In the March 4 edition of Slate–hardly a bastion of reactionary conservatism–Senior Fellow Michael Levi of the Council on Foreign Relations took the greenwash off of “green jobs” in the essay, ”Barking Up the Wrong Tree: Why green jobs may not save the economy or the environment.” Levi also directs CFR’s Program on Energy Security and Climate Change.

At first it sounds as if Levi is merely echoing the thoughts of Harvard’s Robert Stavins, who has recently been pointing out that it’s not necessarily optimal to try to use a single-bullet policy to address two different objectives. (This led to criticism from the always-entertaining Joe Romm that Stavins was incapable of walking and chewing gum at the same time.) Along the same lines of Stavins’ argument, Levi writes:

But just because “green” and “jobs” are both in demand doesn’t mean that policies focused on creating “green jobs” make sense. In fact, a close look at the economics of “green jobs” suggests that if we try to find a lasting solution to these challenges with a single set of policies, we might fail to deliver on both fronts.

But Levi doesn’t stop there. He goes on to challenge the efficacy of government funding for green jobs itself:

The fundamental problem is that there’s no solid evidence that green policies—even those aimed explicitly at creating jobs—will actually lower the long-term unemployment rate. Most of the research on how these sorts of programs might build up the work force simply tallies the payrolls, current or projected, of companies in renewable energy and other sectors…This approach is a natural winner: Green policies inevitably generate jobs in green industries, so the studies inevitably deliver good news. But skeptics argue that simple windmill-counting ignores an important fact: Every unit of energy generated from alternative sources displaces a similar amount generated by traditional means, so forgoing those other energy sources means giving up whatever jobs they were providing. This doesn’t mean that greening the economy will have no net impact on jobs, but it muddies the math considerably.

Levi has done his homework; he knows that the proponents of green jobs have a good comeback to the above argument. But then Levi gives the response to that:

[In response to my objection above,] the green jobs community…points out that a dollar spent on renewable energy or higher energy efficiency will generate more U.S. jobs than a dollar spent on traditional power. That’s probably true, since many green jobs are labor-intensive and clean energy is more likely to be generated at home rather than to be imported. But this misses a critical point, too: The dollar spent on green sources also generates less energy. (Renewables will be more expensive than traditional power for the foreseeable future.) Part of the gap can be closed by energy conservation, but other money will need to be diverted from elsewhere in the economy to make up for the remaining energy shortfall. The result is a loss of jobs somewhere else.

My point in the present blog post is not to definitively settle the score; for a more comprehensive analysis, I point readers to the study I co-authored with Robert Michaels on green jobs. What I am warning about is that many of the estimates of green jobs (that allegedly will be created by government funding) commit very naive mistakes.

To give a diferent example from the ones Levi discusses: Just the other day I heard a politician at the federal level (I forget who it was) talking about the “green” provisions in the stimulus bill. And the questioner asked whether the critics were right, when they said that cap and trade would harm the economy. In response, the politician pointed out all the jobs that would be created through the need to retrofit buildings, switch to alternative energy sources, etc.

This is crazy talk. Someone like Yale’s William Nordhaus can make a plausible case (.pdf) for a carbon tax, using the climate models of the IPCC (and in my opinion a heroic faith in the governments of the world to “get it right”). But Nordhaus is a sensible economist and recognizes that you don’t help the private sector by saddling it with another set of constraints. According to the politician’s logic, if the government required that all buildings be outfitted with polka dot wallpaper, it would stimulate the economy.*

* Unfortunately, there are Nobel laureates who would say that with a straight face. These days it’s getting hard to come up with a reductio ad absurdum…

Friday, March 6, 2009

Assessing the G-20 Stimulus Plans: A Deeper Look

Assessing the G-20 Stimulus Plans: A Deeper Look. By Eswar Prasad & Isaac Sorkin
Brookings, Mar 05, 2009

Almost all of the G-20 countries have announced some type of fiscal stimulus plan to get their economies back on track but how strong are the plans and what measures are included? Eswar Prasad and Isaac Sorkin analyze the G-20 stimulus plans in detail in new research.

View the article as a PDF » View the interactive map »

The financial crisis turned into a broader macroeconomic crisis in the fall of 2008. The world economy has hit a wall since then, with growth plunging in all the major advanced and emerging economies.

Monetary policy acted as a first line of defense against the crisis but conventional measures appear to have reached their limits in many countries. Policy interest rates in many countries--including the U.S., U.K. and Japan--are now close to the zero nominal interest rate floor. Moreover, the implosion of financial systems in many economies has rendered monetary transmission mechanisms far less effective.

Thus, fiscal policy has become essential to kick-start the global recovery or, at a minimum, to prevent global Gross Domestic Product (GDP) from declining further. At the November 2008 G-20 Summit in Washington, DC, the leaders of the G-20 countries promised to “use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability.” How well have countries been doing on this promise?

In this note, we provide a detailed assessment of the stimulus measures in each of the G-20 economies. We first present data on the size of fiscal stimulus packages as announced by the authorities and compiled by the IMF.[1] These data represent estimates of the size of new measures, rather than the announced size of stimulus packages, which typically includes measures already planned before the scope of the crisis became clear. We then supplement these bottom-line numbers with additional information from a variety of sources. This allows us to evaluate the fiscal stimulus packages based on three key criteria:
  • Size—the extent of stimulus relative to GDP
  • Composition—balance between spending and revenue measures
  • Frontloading—the speed with which fiscal measures hit the ground
These criteria enable us to systematically evaluate the potential punch packed by fiscal policy in each country. This analysis also sheds some light on the amount of stimulus on a global scale. In an integrated world economy, the effectiveness of stimulus is contingent on how coordinated it is across countries. If the sizes of the stimulus packages (relative to domestic GDP) are very different across countries or if the effects of some countries’ stimulus packages are backloaded, then there could be “leakage” of stimulus from countries that act early and forcefully.

Thus, lack of coordination could reduce the global bang for the buck of individual countries’ policies. Given the dire situation the world economy is in, large frontloaded stimulus packages that are coordinated internationally could not only be more effective directly but also boost consumer and corporate confidence.

Our analysis is limited to the G-20 countries, mainly because this has de facto become the main global grouping of countries that is driving responses to the crisis. The G-20 countries in this analysis (substituting Spain for the EU) constitute over three-quarters of global GDP (on a market exchange rate basis) and over two-thirds of the world’s population.

We begin with a broad assessment of the contours of stimulus packages announced so far. The interactive country map provides extensive details on individual countries’ packages. It also indicates our assessment of countries that have announced packages that are large and frontloaded (green), modest in size and speed (yellow) and unimpressive in both respects (grey).

Size of Stimulus

Almost all countries in the G-20 have announced fiscal stimulus measures.[2]
The total amount of stimulus in the G-20 amounts to about $692 billion for 2009, which is about 1.4 percent of their combined GDP and a little over 1.1 percent of global GDP. This is a significant amount of stimulus, but appears to fall short of what is needed to tackle a crisis of the proportion we are currently in. The IMF, for instance, has called for stimulus equal to 2 percent of global GDP.[3]

Three countries—the U.S., China and Japan—account for about $424 billion of the overall stimulus in 2009, with their shares in the overall global stimulus amounting to 39 percent (U.S.), 13 percent (China) and 10 percent (Japan). Measures for 2009 in the U.S. stimulus package amount to 1.9 percent of its 2008 GDP and the corresponding numbers for China and Japan are 2.1 percent and 1.4 percent, respectively. For the remaining G-20 economies, the total fiscal stimulus amounts to 1.0 percent of their overall GDP.

In 2010, the U.S. accounts for over 60 percent of planned stimulus. China and Germany are the next largest contributors with China contributing 15 percent of G-20 stimulus and Germany contributing 11 percent. Measures for 2010 in the U.S. stimulus package amount to 2.9 percent of 2008 GDP, China’s 2.3 percent, and Germany’s 2.0 percent.

In summary, while almost all countries have signed on to the fiscal stimulus program, the size of the stimulus varies substantially across countries, with some of the stimulus packages looking downright meek (e.g., France, which has proposed measures amounting to only 0.7 percent of GDP in 2009).


Composition of Stimulus

There is considerable discussion about the relative effectiveness of tax cuts versus spending in stimulating domestic demand. We do not take a position on this but it is useful nevertheless to examine the choices made by different countries in this dimension. We highlight one regularity in the composition of packages across countries and then indicate one dimension in which the structure of the packages differs markedly across countries.

Most countries that have announced multiple waves of stimulus have increased the share of spending (compared to tax cuts) in the second round, just as the U.S. has done from January 2008 to January 2009. For example, Germany’s stimulus in November 2008 was largely composed of tax cuts. The second stimulus package announced in January 2009 was largely tilted towards spending. Similar features can be found in the stimulus measures announced in Australia in October 2008 and February 2009, and in Spain in March 2008 in November 2008.

There is a great deal of variation across countries in the share of the stimulus that is devoted to tax cuts. In the U.S., this share is about 45 percent. Some countries—including Brazil, Russia and the U.K.—have focused almost entirely on tax cuts. Others—including Argentina, China and India—have mostly proposed spending measures. Among the G-20 countries excluding the U.S., about one-third of the stimulus is accounted for by tax cuts and the remainder by spending measures.


Speed of Stimulus

Countries vary in the degree of frontloading of their stimulus packages—the speed with which the tax and expenditure measures hit the real economy (in terms of money reaching the pockets of firms and households, or government monies being spent on social programs or procurement). This is partially a function of the vagaries of the budget process in each country—countries may not announce stimulus for the future though they intend to enact it as part of their regular budget process.

Of the 19 countries that make up the G-20, only four countries—China, Germany, Saudi Arabia, and the U.S.—plan to spend as much or more on stimulus (as a share of GDP) in 2010 than in 2009. In other words, there is a fair amount of frontloading in the stimulus packages of the G-20 countries, with much of the stimulus taking effect in 2009. Of course, this could reflect different beliefs about the length of the recession. It could also reflect difficulty in ramping up government expenditure quickly, especially on infrastructure and other investment projects.

We should also note that some countries recognized the coming crisis and implemented stimulus plans at some point in 2008. This list includes Australia, China, Japan, Korea, Saudi Arabia, South Africa, Spain, U.K. and the U.S.


Bottom Line

Fiscal stimulus has a crucial role to play in stabilizing the world economy, especially as conventional monetary policy appears to have reached its limit in many countries. By and large, policymakers in G-20 economies have acted on their leaders’ joint announcement in November 2008 to use fiscal stimulus in a concerted and coordinated manner to boost economic activity. Some countries like China and the U.S. have responded forcefully, with impressive packages. But the execution, both in terms of size and speed, leaves much to be desired in some of the G-20 countries.

There are legitimate questions about the effectiveness of fiscal stimulus, especially in economies where the financial system has broken down and where monetary policy can no longer play much of a supporting role. Moreover, excessive government borrowing to finance large budget deficits could itself generate instability and there are serious concerns about medium-term sustainability of fiscal positions in economies that are building up public debt at a rapid pace. Given the dire and fast-deteriorating economic situation and the lack of other tools, however, the world may have little choice but to engage in massive frontloaded fiscal expansion. The consequences of timidity, as history teaches us, could be even worse.

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Study: Job Loss Data under Card Check in Canada

New Study Shows Job Loss Data under Card Check. By Ivan Osorio
Open Market/CEI, Mar 05, 2009

This week, Dr Anne Layne-Farrar, an economist with the Law and Economics Consulting Group, published a new study in which she analyzes the likely economic effects of the so-called Employee Free Choice Act if it were to be enacted, especially on employment. EFCA would replace secret ballots in union organizing elections with a process known as card check, whereby union organizers ask employees to sign union cards out in public, thus exposing workers to high-pressure tactics which secret ballots are designed to avoid. Labor unions see this as a way to revive their declining number. The summary of Layne-Farrar’s findings includes:

[P]assing EFCA would likely increase the US unemployment rate and decrease US job creation substantially. The precise effect on unemployment will depend on the degree to which EFCA increases union density, but for every 3 percentage points gained in union membership through card checks and mandatory arbitration, the following year’s unemployment rate is predicted to increase by 1 percentage point and job creation is predicted to fall by around 1.5 million jobs. Thus, if EFCA passed today and resulted in an increase in unionization from the current rate of about 12% to 15%, then unionized workers would increase from 15.5 to 19.6 million while unemployment a year from now would rise by 1.5 million, to 10.4 million. If EFCA were to increase the percentage of private sector union membership by between 5 and 10 percentage points, as some have suggested, my analysis indicates that unemployment would increase by 2.3 to 5.4 million in the following year and the unemployment rate would increase by 1.5 to 3.5 percentage points in the following year.

As Layne-Farrar explained in a press conference call today, she analyzed the experience of Canada with both card check and secret ballots. Union organizing in Canada is set at the provincial, rather than federal level, so different provicial policies allow for contrast. As she explained, several provinces have moved from card check to secret ballots, while one went the other way. To control for other factors, she said she did a regression going back 22 years.

Study available for download here.

For more on card ceck, see here.

Something New for Climate Doomsters to Fear: Political Backlash

Something New for Climate Doomsters to Fear: Political Backlash. By Marlo Lewis
Planet Gore/NRO, Thursday, March 05, 2009

Global warming used to be such fun for eco-activists and their political allies when it was a stick they could use to beat George W. Bush. For years, the Left milked global warming as a political-theater platform for partisan attack, direct-mail fundraising, and endless moral posturing. But now that they’re running the show in Washington, D.C., climate doomsters know they’ll be blamed if their policies de-stimulate our ailing economy. On two key battlefronts, these vociferous advocates of urgent action are now proceeding with caution.

Consider the climate-treaty negotiations. The global-warming crowd continually castigated Bush for opposing the Kyoto Protocol. Bush-bashing reached a fever pitch during the December 2007 UN Climate Change Conference in Bali, Indonesia. The main bone of contention there was a European Union (EU) proposal to cut developed country emissions from 25 to 40 percent below 1990 levels by 2020. Senate Environment & Public Works Committee Chairman Barbara Boxer (D., Calif.) and 14 other Senators wrote to Bali delegates crowing about the committee’s approval of the Lieberman-Warner cap-and-trade bill and even “bigger [U.S. policy] changes on the horizon.” The letter was obviously designed to give political aid and comfort to the legions of delegates denouncing Bush for rejecting the EU proposal.

Where do things stand in the Obama era of “change?” Greenwire (March 4, 2009, subscription required) reports that President Obama’s lead climate negotiator, Todd Stern, “yesterday dismissed as ‘unnecessary and unfeasible’ a European proposal to have developed nations curb emissions 25 to 40 percent below 1990 levels in the next decade.” In an obvious reference to Kyoto, Stern explained: “I don’t want to bring home a dead-on-arrival agreement. We tried that. It didn’t do the world a lot of good.” Stern said that for America, the EU proposal is “a prescription not for progress but for stalemate,” noting that the EU target is more aggressive than the Lieberman-Warner cap-and-trade bill, which failed to pass in the Senate in June 2008.

So, are eco-pressure groups crying foul or even expressing regret that America still lags behind Europe in global-warming zealotry? No way. Greenwire summarizes their reactions:

Chris Flavin, president of the Worldwatch Institute think tank, praised Stern's comments.

"It's good that he was frank about some of the difficulties with the Europeans," Flavin said. "It was a warning shot that they better get serious about recognizing that we and the Europeans are not going to get to the same numbers starting from a 1990 baseline."

Elliot Diringer, vice president for international strategies at the Pew Center on Global Climate Change, said Stern was simply "reflecting the political realities here in Washington."

Overall, negotiators and analysts hailed the speech as an unmistakable signal from the Obama administration that the United States is serious about getting a global deal.

"There was an unequivocal statement that we are going to make reductions," said World Resources Institute President Jonathan Lash. "I just haven't even heard a U.S. official be explicit and concrete and clear that way.

"Poland's climate ambassador, Janusz Reiter, called Stern's comments "exactly the mix of idealism and pragmatism that is the right formula for the process."

Newfound caution is also discernible among activists who litigated and won Mass. v. EPA, and who sued EPA again last year to compel the agency to issue an endangerment finding — the prerequisite to regulating greenhouse-gas emissions from new motor vehicles under §202 of the Clean Air Act (CAA).

Back in September 2008, David Bookbinder, chief climate council for the Sierra Club, derided as “bugaboos,” a “red herring,” and a “pure scare tactic” (see segments 1:47:10-1:48:22 and 2:03:83-2:05:20 of the Webcast Archive of this hearing) industry and free-market group warnings (see here, here, and here) that regulating carbon dioxide (CO2) under almost any CAA provision would expose tens of thousands of previously unregulated buildings and facilities to new controls, paperwork, and penalties under the Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program.

Yet last month, the Sierra Club, the Natural Resources Defense Council, and the Environmental Defense Fund declined to file a motion to “stay” former EPA Administrator Johnson’s memorandum clarifying that CO2 is not currently subject to PSD regulation.

Why? According to Greenwire, “If the agency were to stay the memo immediately, Bookbinder said, it could trigger an obligation under the Clean Air Act for broad-ranging regulations targeting even very small sources of carbon emissions.” In Bookbinder’s words: “The Clean Air Act has language in there that is kind of all or nothing if CO2 gets regulated, and it could be unbelievably complicated and administratively nightmarish for both EPA and the states if they were to yank the Johnson memo and not have something in place that makes it clear that we’re going after only the very large sources.”

On Capitol Hill, the same political caution seems to be replacing political theater. In 2008, Rep. Ed Markey (D., Mass.), Rep. Henry Waxman (D., Calif.), and Sen. Boxer each demanded that EPA release the endangerment analysis and draft regulations that the Agency had developed in response to Mass v. EPA. Bush officials put those documents under wraps once they understood how easily CAA regulation of CO2 could spiral out of the agency’s control. Like her Bush-administration predecessor, Obama EPA administrator Lisa Jackson has decided against releasing the documents, announcing that EPA in due course would publish a new endangerment analysis and solicit public comment. None of the usual suspects in Congress is complaining or threatening subpoenas.

What does it all mean? Unfortunately, these rhetorical and tactical adjustments do not mean the Obama Administration won’t advocate cap-and-trade legislation, won’t agree to Kyoto II at the Copenhagen climate conference, or won’t regulate CO2 under the CAA.

However, their more cautious approach — which includes Obama’s proposal for a weaker emissions-reduction target (basically 1990 levels by 2020) than the U.S. Kyoto target (7 percent below 1990 levels during 2008-2012) — suggests that the global-warming crowd are worried as never before about the political backlash the economic fallout from their agenda could provoke. Our task is obvious: keep the spotlight on the threats their policies pose to our foundering economy.

Opposite Views on Climate Feedbacks (and perhaps the answer lies in the middle)

Opposite Views on Climate Feedbacks (and perhaps the answer lies in the middle). By Chip Knappenberger
Master Resource, March 5, 2009

Just how much warming should we expect from rising levels of atmospheric greenhouse gases (GHGs)? The answer largely hinges on how much extra warming might be generated by the initial warming—that is, how strong (and in what direction) are the feedbacks from water vapor and clouds.

By most estimates (including climate model outcomes), these feedbacks are positive and result in about a doubling of the warming that would result from greenhouse gas increases alone. By others, however, the total feedbacks are negative, and imply that the total warming will be less than the warming from greenhouse gas increases alone, and only a fraction of that which is commonly expected.

The ultimate warming experienced across the 21st century will depend on the combination of greenhouse gas emissions and how the climate responds to them. The feedback issue is an essential part of the latter, for it spells the difference between a high climate sensitivity to greenhouse gas doubling (say 3-4ºC) and a much lower one (1-2ºC).

As to where the answer lies, the devil is in the details, and in this instance he is hard at work, as the processes involved are exceedingly complex—difficult to not only to fully understand, but even to adequately measure.

In a “Perspectives” piece in a recent issue of Science magazine, Andrew Dessler and Steven Sherwood attempt to put to rest any notion that the feedbacks on global temperatures are anything but positive and significant. Dessler and Sherwood point out that the role of water vapor plays the largest role in the feedback process—higher temperature (from greenhouse gases) lead to more water vapor in the atmosphere which leads to even higher temperatures still (as water vapor, itself, is a strong greenhouse gas).

But actual hard evidence that water vapor is increasing in the atmosphere has been hard to come by. Dessler and Sherwood review the recent literature on the topic, including an important contribution from Dessler et al. published last year, and conclude that there now exists sufficient evidence to conclude that atmospheric water vapor is increasing very much in line with climate model expectations and that this increase produces roughly twice the global temperature rise than does anthropogenic greenhouse gas enhancement alone. Meaning, of course, that all is generally right in model world, or as they put it: “There remain uncertainties in our simulations of the climate, but evidence for the water vapor feedback—and the large future warming it implies—is now strong.”

But apparently Dessler and Sherwood didn’t convince everyone that this is the case. One notable person who was less than impressed that this was the whole story was Roy Spencer, who has himself been working on the feedbacks issue. Spencer points out that water is actually involved in two feedback processes—the first, through water vapor as described by Dessler and Sherwood, and the second, through water droplets, or, more commonly, clouds. Changes in the patterns (horizontal, vertical, and temporal) and characteristics (droplet size, brightness, etc.) of cloud cover play an important role not only in the earth’s climate, but in how the climate responds to changes in the greenhouse effect. And, as you may have guessed from their ephemeral nature, the behavior or clouds is not particularly well-understood, and even less well modeled.

Spencer has been looking into the cloud part of the feedback processes. Over the past several years, during the period when Dessler et al. (2008) finds a positive feedback from increases in water vapor, Spencer, in his investigations, finds that cloud cover changes produce a feedback in the opposite direction. And when he adds these two effects together, he finds that the total feedback from warming-induced changes in water in the atmosphere to be negative (that is, the cloud effect dominates the vapor effect). Granted, Spencer’s investigations are far from complete and even farther from being generally accepted, but they do raise important concerns as to the ability of examinations of short-term behavior to diagnose long-term response (a situation relied on by both Spencer, and Dessler and Sherwood). Spencer concludes that “unless you know both [vapor] and [cloud] feedbacks, you don’t know the sensitivity of the climate system, and so you don’t know how much global warming there will be in the future.” Virtually the opposite sense of things than that put forth by Dessler and Sherwood.

Obviously, the final arbiter will be the earth’s climate itself, as it is the true integrator of all forces imparted upon it. But, still today, we struggle to even accurately observe the finer details of how it is responding to the changes to which it is being continually subjected. And we are further still from understanding the processes involved sufficiently to produce unassailable models of the climate’s behavior, much less future projections of its response response (as evidenced by the recent slowdown in the rate of global temperature increase despite ever-growing greenhouse gas emissions). And so the process of science continues…

[Breaking news: A new peer-reviewed paper has just been published in the journal Theoretical and Applied Climatology, by researchers Garth Paltridge and colleagues which finds that the increase in atmospheric water vapor that, according to Dessler and Sherwood most definitely accompanies the increase in temperature, is absent in one of the primary databases used to study climate behavior—the so-called NCEP reanalysis data. The authors admit that perhaps there are errors contained in this dataset which may explain their results, but as it stands now (and unless some errors are identified) the reanalysis data supports a negative water vapor feedback. Paltridge et al. conclude:

Negative trends in [water vapor] as found in the NCEP data would imply that long-term water vapor feedback is negative—that it would reduce rather than amplify the response of the climate system to external forcing such as that from increasing atmospheric CO2. In this context, it is important to establish what (if any) aspects of the observed trends survive detailed examination of the impact of past changes of radiosonde instrumentation and protocol within the various international networks.

Lead author Garth Paltridge describes the trials and tribulations of trying to get this result (which runs contrary to climate model expectations) published in an enlightening article over at ClimateAudit, including how at least one of the Dessler and Sherwood authors knew of Paltridge’s soon-to-be-published results and yet made no mention of it in their Science piece. Hmmm, so much for an open discussion of the science on this issue.]

References:

Dessler, A.E., and S. C. Sherwood, 2009. A matter of humidity. Science, 323, 1020-1021.

Dessler, A.E., et al., 2008. Water-vapor climate feedback inferred from climate fluctuations, 2003-2008. Geophysical Research Letters, 35, L20704.

Spencer, R., and W.D. Braswell. 2008. Potential biases in feedback diagnosis from observations data: a simple model demonstration. Journal of Climate, 21, 5624-5628.