Monday, April 13, 2009

What Iran Really Thinks About Talks - It's a game of diplomacy without sincerity

What Iran Really Thinks About Talks. By Michael Rubin
It's a game of diplomacy without sincerity.
Apr 12, 2009

On Apr. 9, Gholam Reza Aghazadeh, the head of Iran's atomic energy agency, announced that the Islamic Republic had installed 7,000 centrifuges in its Natanz uranium enrichment facility. The announcement came one day after the U.S. State Department announced it would engage Iran directly in multilateral nuclear talks.

Proponents of engagement with Tehran say dialogue provides the only way forward. Iran's progress over the past eight years, they say, is a testament to the failure of Bush administration strategy. President Barack Obama, for example, in his Mar. 21 address to the Iranian government and people, declared that diplomacy "will not be advanced by threats. We seek engagement that is honest and grounded in mutual respect."

Thus our president fulfills a pattern in which new administrations place blame for the failure of diplomacy on predecessors rather than on adversaries. The Islamic Republic is not a passive actor, however. Quite the opposite: While President Obama plays checkers, Supreme Leader Ayatollah Ali Khamenei plays chess. The enrichment milestone is a testament both to Tehran's pro-active strategy and to Washington's refusal to recognize it.

Iran's nuclear program dates back to 1989, when the Russian government agreed to complete the reactor at Bushehr. It was a year of optimism in the West: The Iran-Iraq War ended the summer before and, with the death of revolutionary leader Ayatollah Khomeini, leadership passed to Ayatollah Khamenei and President Ali Akbar Hashemi Rafsanjani, both considered moderates.

At the beginning of the year, George H.W. Bush offered an olive branch to Tehran, declaring in his inaugural address, "Good will begets good will. Good faith can be a spiral that endlessly moves on." The mood grew more euphoric in Europe. In 1992, the German government, ever eager for new business opportunities and arguing that trade could moderate the Islamic Republic, launched its own engagement initiative.

It didn't work. While U.S. and European policy makers draw distinctions between reformers and hard-liners in the Islamic Republic, the difference between the two is style, not substance. Both remain committed to Iran's nuclear program. Former Iranian President Mohammad Khatami, for example, called for a Dialogue of Civilizations. The European Union (EU) took the bait and, between 2000 and 2005, nearly tripled trade with Iran.

It was a ruse. Iranian officials were as insincere as European diplomats were greedy, gullible or both. Iranian officials now acknowledge that Tehran invested the benefits reaped into its nuclear program.

On June 14, 2008, for example, Abdollah Ramezanzadeh, Mr. Khatami's spokesman, debated advisers to current Iranian President Mahmoud Ahmadinejad at the University of Gila in northern Iran. Mr. Ramezanzadeh criticized Mr. Ahmadinejad for his defiant rhetoric, and counseled him to accept the Khatami approach: "We should prove to the entire world that we want power plants for electricity. Afterwards, we can proceed with other activities," Mr. Ramezanzadeh said. The purpose of dialogue, he argued further, was not to compromise, but to build confidence and avoid sanctions. "We had an overt policy, which was one of negotiation and confidence building, and a covert policy, which was continuation of the activities," he said.

The strategy was successful. While today U.S. and European officials laud Mr. Khatami as a peacemaker, it was on his watch that Iran built and operated covertly its Natanz nuclear enrichment plant and, at least until 2003, a nuclear weapons program as well.

Iran's responsiveness to diplomacy is a mirage. After two years of talks following exposure of its Natanz facility, Tehran finally acquiesced to a temporary enrichment suspension, a move which Secretary of State Colin Powell called "a little bit of progress," and the EU hailed.

But, just last Sunday, Hassan Rowhani, Iran's chief nuclear negotiator at the time, acknowledged his government's insincerity. The Iranian leadership agreed to suspension, he explained in an interview with the government-run news Web site, Aftab News, "to counter global consensus against Iran," adding, "We did not accept suspension in construction of centrifuges and continued the effort. . . . We needed a greater number." What diplomats considered progress, Iranian engineers understood to be an opportunity to expand their program.

In his March 24 press conference, Mr. Obama said, "I'm a big believer in persistence." Making the same mistake repeatedly, however, is neither wise nor realism; it is arrogant, naïve and dangerous.

When Mr. Obama declared on April 5 that "All countries can access peaceful nuclear energy," the state-run daily newspaper Resalat responded with a front page headline, "The United States capitulates to the nuclear goals of Iran." With Washington embracing dialogue without accountability and Tehran embracing diplomacy without sincerity, it appears the Iranian government is right.

Mr. Rubin is a resident scholar at the American Enterprise Institute.

What the Fed is doing to help end the economic crisis

The Fed's Balance Sheet. WaPo Editorial
What the agency is doing to help end the economic crisis
WaPo, Monday, April 13, 2009; A14

IN NOVEMBER 2005, BusinessWeek published a story that began, "Welcome to the era of the diminished Fed." It predicted that incoming Federal Reserve Chairman Ben S. Bernanke would avoid the activist models of his predecessors and turn to a more predictable rules-based system that he called "constrained discretion." Now, a few years later, the Fed is in uncharted territory in an effort to save the economy, and "quantitative easing" has handily trumped constrained discretion. The central bank has massively expanded its balance sheet by more than a trillion dollars, with more to come, and simultaneously increased the types of activities in which it engages, making the notion of a central bank that focuses merely on adjusting interest rates seem positively quaint.

The new activities focus on providing credit to help financial institutions, making direct loans and, recently, purchasing long-term assets, such as Fannie Mae debt. As a result, the U.S. central bank is now the proud overseer of the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), which helps money market mutual funds meet their obligations; the Commercial Paper Funding Facility (CPFF), which lends directly to market participants; and the Term Asset-Backed Securities Loan Facility (TALF), which makes direct loans in an effort to fix the securitization markets and provides liquidity swap lines to a host of central banks around the world -- not to mention TAF, TSLF, PDCF, and MMIFF. It's enough to make even the most avid Fed watcher's head spin. While Mr. Bernanke has made efforts to increase transparency -- ranging from the helpful expansion of Fed Web sites to granting an unusual interview on "60 Minutes" that was downright folksy -- the effectiveness of these policies is virtually impossible to assess.

That the Fed has entered into so many new areas is in part a reflection of Congress's unwillingness to do so. Reeling from the political sting of the Troubled Assets Relief Program bank bailout and bonuses, politicians have been thus far unwilling to provide more funds to help stabilize the financial sector. This has pushed the Fed to shift from broad, macroeconomic manipulation to specific intervention in targeted areas and institutions. These activities may well turn out to be the winch that pulls the economy out of the credit and financial market meltdown, though no one can say for sure, and the midst of a crisis is not the time for handing out final grades. We do know that traditional Fed rate reductions, which left the federal funds rate hovering near zero, were not enough to jump-start the economy and that something else had to be done.

The real challenge will be "unwinding" all of these activities. If the Fed fails to turn off these new policies quickly enough, they could be highly inflationary, but shedding the assets it has purchased could tangle up markets tremendously. The president of the Federal Reserve Bank of Philadelphia has warned that there could be significant political pressure to keep many of the programs in place, particularly since the economy may still feel weak when it is time to start contracting the Fed's bloated balance sheet. Creating all these new programs was a heavy lift; getting rid of them may be even harder.

Sunday, April 12, 2009

Can Renewable Technologies Provide U.S. Electricity Needs?

Can Renewable Technologies Provide U.S. Electricity Needs? (Only hypothetically, using unrealistic assumptions). By Mary Hutzler
Master Resource, April 7, 2009

Several reports (see here and here) and certain websites (here) allege that renewable technologies can meet our growing electricity needs and also meet stringent reduction targets for carbon dioxide. For example, Climate Progress, a website populated by Joseph Romm, an assistant secretary of energy during the Clinton administration, indicates that the answer to our growing electricity needs will come from energy efficiency (including cogeneration), wind power, concentrated solar power (CSP), and biomass co-firing, which taken together will meet a projected 1 percent annual growth rate in demand while also reducing carbon emissions.

These reports are in sharp contrast to forecasts produced by the Energy Information Administration (EIA), an independent agency of the U.S. Department of Energy. EIA’s most recent Annual Energy Outlook (AEO) indicates the U.S. generating sector will be dominated by coal and natural gas-fired technologies, representing two-thirds of our electricity generation through 2030, followed by generation from nuclear power, contributing almost another 20 percent. Only 14 percent of total generation would come from renewable sources, including hydropower, by 2030, up from 8 percent in 2007. The EIA forecasts include the efficiency and renewable technologies cited by Romm, plus others; but they do not include major policy and regulatory changes.


Efficiency

What gives rise to the differences between these projections? First, Romm assumes (based on California’s experience) that efficiency improvements can reduce the increase in electricity demand to near zero through 2020. Romm states: “If every American had the per capita electricity of California, we’d cut electricity use some 40%.” Many of California’s efficiency improvements were the normal types of strategies: better insulation; energy-efficient lighting, heating, and cooling; and so forth. And these are also incorporated in EIA’s demand forecast for electricity. Nevertheless, the EIA, after incorporating efficiency improvements, expects electricity generation to grow at 0.9 percent per year through 2030.

According to Romm, however, California also instituted a regulatory concept called electricity decoupling. Under this arrangement, utility company profits are not closely tied to how much electricity they sell; rather, the utilities are allowed to take a share of any energy savings they help consumers and businesses achieve. The bottom line is that California utilities can make money even when their customers use less electricity. Or, to put it in other words: California electric-utility companies can charge for electricity not used. While that may benefit the utility company, it distorts normal economic price signals. For example, with the addition of a pro-rated conservation charge, a consumer who has invested in energy efficiency could be faced with higher electricity bills than a consumer who has not conserved and who uses more electricity. This arrangement distorts the consumers’ benefits from traditional conservation measures, such as lowering their heating temperatures and/or raising their cooling temperatures. (For more on decoupling, see here.)

Perhaps decoupling may work in California where weather is milder than in many other states, housing is more geared to apartments and smaller homes due to high residential property values, and where many manufacturing firms have departed owing to high energy prices. But, decoupling could add hardship for Americans living in cold-weather states that heat with electricity and for Americans living in warm-weather states that need electricity to cool homes. Indeed, if consumers can’t afford to heat and/or cool their home adequately, they may be confronted with illness or death. Decoupling could also cause more manufacturing firms to leave the country as energy prices increase, making their ability to compete at home more challenging.


Combined Heat and Power

In addition, Romm favors combined heat and power, a technology that is incorporated in the modeling used by California to analyze compliance with its climate-change legislation, A.B. 32, which requires statewide greenhouse gas emissions to reach 1990 levels by 2020. That forecast has 4.4 gigawatts of combined heat and power constructed in California by 2020. In comparison, EIA’s forecast (see Table A9) has 0.7 gigawatts of combined heat and power constructed in the entire United States by 2020.


Wind Power

Romm next promotes wind power as a technology that has been growing at a staggering pace, with over 8 gigawatts constructed in 2008 alone. That statistic is true, and Romm correctly reports wind power as an intermittent technology. However, Romm cites a Department of Energy study that calls for 20 percent of U.S. power to be generated by wind by 2030. To reach that level, almost 300 gigawatts of new wind power (new, that is, beyond 2008 levels) must be constructed. EIA’s forecast (see Table A16) has about 20 gigawatts of new wind power constructed by 2030. A comparison of Romm’s cost assumptions for wind compared with those of EIA show Romm’s costs slightly lower by about 0.7 cents per kilowatt-hour (kWh) or 8 percent lower when subsidies and transmission are taken into account. (Specifically, EIA’s wind costs are 9 to 11.5 cents/kWh unsubsidized, while Romm’s are 7.5 to 10 cents/ kWh, unsubsidized and excluding transmission. EIA includes some transmission at 0.8–0.9 cents/ kWh. On the same basis, the comparison is 8.2 to 10.7 cents/ kWh for EIA, compared with 7.5 to 10 cents/ kWh for Romm.)


Solar Power

Concentrated solar power is another technology that Romm is encouraging. He cites a report by Environment America entitled “Solar Thermal Power and the Fight against Global Warming,” which indicates that the United States could build 80 gigawatts by 2030. EIA’s forecast has 0.33 gigawatts of solar thermal built by 2030, most likely all demonstration projects. A comparison between Romm and EIA regarding the costs of this technology shows vast differences. Romm cites contract costs in the Southwest and assumptions from California’s A.B. 32 study. Compared to EIA’s cost assumptions for solar thermal, Romm’s costs are 5 to 10 cents per kilowatt-hour lower or 30 to 40 percent lower. (Romm states that solar thermal is being contracted at 14 to 15 cents/ kWh in the southwest and that the California Public Utilities Commission assumes a cost for solar thermal at 12.7–13.6 cents/ kWh—including 6 hours of storage capacity—with the possibility of its dropping 20% by 2020, according to its A.B. 32 report. EIA’s subsidized price with transmission is 18.5–23.7 cents/ kWh. Transmission accounts for 1 to 1.1 cents/ kWh.)


Biomass Co-firing

Romm also touts biomass co-firing as “probably the cheapest, easiest, and fastest way to provide new renewable base-load power without having to build any new transmission lines.” Biomass co-firing is the use of biomass fuels along with coal in existing coal-fired generators. Romm and EIA both agree that up to 15 percent of the fuel used in a coal-fired generator can be biomass. They quote a cost range of $100 to $700 per kilowatt for adapting existing coal-fired technology to use biomass. But Romm adopts a median cost of $180 per kilowatt, while EIA sees the cost as dependent on the size of the host plant and the co-firing increment installed. Both recognize that the feedstocks need to be residues within a radius of about 50 miles around the plant since transportation costs limit the range. Dedicated feedstocks are more expensive than residues (e.g., construction and demolition wood, pallets, sawdust shavings from secondary wood processing). But both forecasters assume fairly similar feedstock costs.

Romm’s estimate of additional biomass co-fired capacity is 8 to 12 gigawatts by 2010, or 2 to 4 percent of total coal-fired capacity expected in that year, and 26 gigawatts by 2020, 8 percent of coal-fired capacity. EIA sees a possible 0.7 percent of coal-fired generation by 2010. By 2025, EIA’s reference case sees biomass co-generation peaking at 4.6 percent of coal-fired generation, dropping to 3.3 percent in 2030, as biomass gasification combined-cycle technology is built and competes with co-firing for lower cost feedstock. EIA’s forecast has 6.5 gigawatts of biomass gasification combined-cycle built by 2030.


Conclusion

Many of Romm’s technologies have been around for years, without much penetration. The EIA, which assumes existing policies and regulations, forecasts only small amounts of future penetration, with total renewable technologies, including hydropower, representing only 14 percent of the electricity mix in 2030.

So, how does Romm expect to meet these efficiency and renewable targets? Obviously, he expects major policy changes. But these policy changes will cost the American public higher electricity rates. How much higher depends on the policy, the location of the consumers, and their usage.

Without those policy changes, EIA is forecasting that electricity prices will increase at a rate of 0.6 percent per year in real terms through 2030, and 2.2 percent a year in nominal terms. How much more will Romm’s strategy cost? And will there be enough base-load power to supply the needs of future generations if current legislative and legal battles continue to restrict supply of coal-fired and nuclear-generated electricity? These questions are hard ones for the proponents of energy transformation via government intervention.

Pew Center Realism Towards ‘Kyoto II’

Pew Center Realism Towards ‘Kyoto II’: Game, Set, Match Adaptation? By Robert Bradley
Master Resource, April 8, 2009

‘Climate and Agriculture: We’re Not Dumb’ Follow-Up

‘Climate and Agriculture: We’re Not Dumb’ Follow-Up. By Chip Knappenberger
Master Resource, April 11, 2009

The Pirates Challenge Obama's Pre-9/11 Mentality - Distinctions between lawful and unlawful combatants go back to Roman times

The Pirates Challenge Obama's Pre-9/11 Mentality. By Mackubin Thomas Owens
Distinctions between lawful and unlawful combatants go back to Roman times.
WSJ, Apr 11, 2009

When Somali pirates hijacked the U.S.-flagged Maersk Alabama this week and took 20 Americans hostage, President Barack Obama refused to comment. It seems that our new president is desperate to do everything he can to distance himself from his predecessor, which is why his team has launched a campaign to rebrand the War on Terror. The results are mystifying. "Overseas contingency operations" is the new name for the war, while "man-caused disasters" is a euphemism for terrorist attacks.

In this new rhetorical regime, the administration criticizes President George W. Bush for his "illegal" policies with respect to the detention center at Guantanamo Bay, and claims that the treatment of the detainees themselves constitutes "torture."

But while they've certainly made cosmetic changes, many claim the Obama administration has left the substance of Bush's approach intact.

Attorney General Eric Holder added to this perception when, after visiting Guantanamo, he acknowledged that the facility is very well run and that implementing Mr. Obama's promise to close it down will be difficult. While renouncing the term "enemy combatant," the Obama administration acknowledges the reality that no matter what we call those detained at Guantanamo, the detainees are still not entitled to prisoner-of-war status because they have violated the laws of war by killing civilians and fighting out of uniform. Instead of calling the detainees enemy combatants, the administration has opted to refer to them as "individuals captured in connection with armed conflicts and counterterrorism operations," or "members of enemy forces," or "persons who [the president] determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, and persons who harbored those responsible for the September 11 attacks."

Though these changes might seem superficial, unfortunately, they represent a substantive shift. They signal a return to the policy mindset that existed before 9/11, and the consequence will be material harm to U.S. security.

First, in holding that the president's power to indefinitely detain without legal charges is derived from Congress's authorization for the Use of Military Force Act (passed in the aftermath of 9/11), the Justice Department has undercut the president's own war power under the Constitution. This is an inherent executive power that has been recognized since at least the presidency of Abraham Lincoln.

As Lincoln wrote to James Conkling in August 1863, "I think the Constitution invests its commander-in-chief, with the law of war, in time of war." In addition to the commander-in-chief clause of Article II, Lincoln found his war power in his presidential oath "to preserve, protect, and defend the Constitution of the United States."

Second, the various new substitutes for "unlawful enemy combatant" abolish an important distinction in traditional international law. As the eminent military historian Sir Michael Howard argued shortly after 9/11, the status of al Qaeda terrorists is to be found in a distinction first made by the Romans and subsequently incorporated into international law by way of medieval and early modern European jurisprudence. According to Mr. Howard, the Romans distinguished between bellum (war against legitimus hostis, a legitimate enemy) and guerra (war against latrunculi, pirates, robbers, brigands and outlaws).

Bellum became the standard for interstate conflict, and it is here that the Geneva Conventions were meant to apply. They do not apply to guerra. Indeed, punishment for latrunculi, "the common enemies of mankind," traditionally has been summary execution.

Though they don't often employ the term, many legal experts agree that al Qaeda fighters are latrunculi -- hardly distinguishable by their actions from pirates and the like. Robert Kogod Goldman, an American University law professor has commented: "I think under any standard, the captured al Qaeda fighters simply do not meet the minimum standards set out to be considered prisoners of war." And according to Marc Cogen, a professor of international law at Ghent University in Belgium, "no 'terrorist organization' thus far has been deemed a combatant under the laws of armed conflict." Thus al Qaeda members "can be punished for all hostile acts, including the killing of soldiers, because they have no right to participate directly in hostilities." But the Obama administration is about to extend legal rights -- intended to protect civilians -- to the very latrunculi who want to blow them up by considering the possibility of trying them in U.S. courts. Indeed, Attorney General Holder did not rule out trying the Somali pirates.

Some in Congress want to go further than the Obama team. Rather than focusing their attention on the terrorists, these politicians wish to criminalize the behavior of Bush administration officials for actions they took to protect Americans, and that fell well short of those taken by Lincoln in suppressing the Rebellion of 1861. Thus Sen. Patrick Leahy (D., Vt.), aided and abetted by my own Sen. Sheldon Whitehouse (D., R.I), have begun hearings on Mr. Leahy's proposal for a "Truth Commission" to investigate the Bush administration's interrogation policies.

The mantra of Bush critics has been that the previous administration "tortured" detainees. But this is nonsense. At issue is the CIA's waterboarding of three high-ranking latrunculi who had been instrumental in planning and executing attacks that killed thousands of Americans. These individuals had been trained to resist conventional interrogation methods and were thought to have information about impending attacks.

What makes the Leahy-Whitehouse show trials most appalling -- and hypocritical -- is that Congress was briefed on the enhanced interrogation methods in September 2002. At the time, according to the Washington Post, members of Congress from both parties -- including current Speaker of the House Nancy Pelosi -- wanted to ensure that the interrogations were tough enough to get the necessary intelligence from the captured terrorists. As the Post reported, "there was no objecting, no hand-wringing," and according to a U.S. official present during the briefings, "the attitude was, 'We don't care what you do to those guys as long as you get the information you need to protect the American people.'" But of course, according to a source looking back on that period, "the environment was different then because we were closer to Sept. 11 and people were still in a panic."

And therein lies the problem. Too many of our leaders have forgotten that we are at war with latrunculi who wish to destroy us. Anyone who doubts this need only read the recent statement by the five detainees at Guantanamo charged with planning the 9/11 attacks in which they describe the charge that they murdered Americans very clearly -- as a "badge of honor."

Mr. Owens is a professor at the Naval War College and editor of Orbis, the journal of the Foreign Policy Research Institute.

CIA has been ordered to get rid of contract interrogators and secret locations overseas

Blame The Messenger
Strategy Page, Apr 11, 2009

The CIA has been ordered to get rid of contract interrogators, and secret locations overseas where terrorist suspects were imprisoned and interrogated. This is all because, during the past eight years, opposition politicians in the U.S. accused the CIA of torturing terrorist suspects, to obtain information about attacks being planned. The interrogations worked, and there was very little of what one could call torture. However, the matter became a political issue, and the definition of torture was broadened to include things that are done regularly by Western police, including those in the United States.

The contract interrogators were people who had special language, cultural awareness and interrogation skills needed to get the job done. Most were former military, CIA or police interrogators, and a few were from foreign countries. These skills were particularly useful, because most of the terrorist suspects were from exotic, for most American interrogators, cultures. Having specialized knowledge was key to getting information out of many of these terrorists.

The CIA has put a brave, and career preserving, face on all this and declared that they have sufficient CIA employees to replace all the contract interrogators. They don't, and are hoping they can quietly slip into Congress or the White House and, in a classified briefing, scare the politicians sufficiently to bring in a contract interrogator for crucial situations. If not, and there's another attack in the United States that could have been provided by a competent interrogation, the blame will be shifted or, as a last resort, the CIA will have to take the blame. Thus the cycle that began in the 1940s when, right after World War II, the predecessor of the CIA, the wartime OSS (Office of Strategic Services) was disbanded for being politically incorrect and stepping on the wrong toes, repeats itself. When the Soviet threat was realized shortly thereafter, the OSS was quickly resurrected as the CIA. But it all happened again in the 1970s, when the CIA was punished and reformed for real or imagined misbehavior during the Vietnam war.

In the aftermath of these cleansing events, competent people stay away from the CIA, more problems arise, and desperate politicians demand something be done, no questions asked. But many potential espionage professionals will remember, and only the most courageous and self-sacrificing will step forward.

American Interests in Pakistan

American Interests in Pakistan. By Daveed Gartenstein-Ross
The Weekly Standard, Apr 13, 2009, Volume 014, Issue 29

Excerpts:

Sharif is aided in his rise by a sympathetic media, who ignore his shortcomings and help him "cultivate the image of a strong man who does not budge from his stance," in the words of commentator Yahya Hussaini. Officials in Zardari's government raised this concern with me. One complained that several recent pro-Sharif rallies were shown repeatedly on television before they had attracted many participants, and that the saturation coverage helped to increase their size.

The strong anti-American strand in Pakistan's media, moreover, indirectly aids Sharif. Thus, the message behind one music video that played frequently on Pakistani television during the recent crisis was that Pakistan's problems are caused by the American war in Afghanistan, not by jihadism. The video portrays a sinister-looking CIA agent and a cigar-smoking President Zardari cackling as a Predator strike kills an unjustly imprisoned Pakistani man who escapes from prison determined to "change the system of the country." Elsewhere in Pakistan's media, conspiracy-minded figures like commentator Ahmed Quraishi, who sees the hidden hand of the United States and India behind virtually all of Pakistan's ills, are reaching new prominence.

Indonesian President Yudhoyono's Big Decision

Indonesian President Yudhoyono's Big Decision, by Walter Lohman
Heritage WebMemo #2393
April 10, 2009

WaPo supports federal president's estate tax plan

The Small-Business Myth. WaPo Editorial
The facts about who would pay proposed tax increases
WaPo, Sunday, April 12, 2009; A16

SMALL BUSINESS is the cute puppy of American tax policy, along with its related breed, the family farm. Invoke small business, and the inevitable response is the policymaking equivalent of awwww, how sweet. Suggest that a proposed change might hurt small business, and you might as well be advocating torturing puppies. Now we like a cute puppy as well as the next editorial board, and we're all for small business, too. But the problem with the way this argument is deployed is that the facts often do not support the claims of harm.

Just recently, the small-business boogeyman came up in the debate over the estate tax -- specifically, whether it is unfair to impose a tax on estates in excess of $7 million per couple (the level this year) or whether the first $10 million of every estate should be exempt from taxation. Predictably, the advocates of the $10 million proposal, Sens. Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.), raised the small business/family farm canard. "Many have relatively low profit margins and are considered 'wealthy' by the government only because they own expensive equipment or land," they wrote in a letter to The Post.

In fact, nearly all small-business and family-farm estates are already shielded from having to pay estate tax. If the estate tax were kept at its current level, as President Obama advocates, only 430 business or farm estates would owe any tax whatsoever in 2011, according to an estimate by the Brookings Institution-Urban Institute Tax Policy Center. Moreover, it's not true that these estates would be forced to liquidate to come up with enough money to pay the estate tax. At current levels, 13 family farms and 41 family-owned businesses would not have had enough liquid assets to satisfy estate taxes in 2005, according to a study by the Congressional Budget Office. Even these would probably not have to be sold on account of a tax hit, because payments can be spread over a 14-year period.

The impact on small business is also deployed to argue against letting the Bush tax cuts for upper-income taxpayers expire. The Bush Treasury Department said that 7 percent of taxpayers with small-business income would be affected by a change in the top two tax rates; the Obama administration says that the correct number is 2 percent -- and that even this figure may overstate the number of what are generally considered small businesses, because it includes high-income partners in law firms, investment banks and the like.

Opponents of raising top marginal tax rates argue that this small slice of taxpayers is nonetheless responsible for generating a disproportionate share of small-business income -- about a quarter of the total, according to the Tax Policy Center -- and that higher rates would discourage entrepreneurship. As much as that seems like a matter of common sense, the evidence is far from clear. A 2006 study by Donald Bruce and Mohammed Mohsin found that "the top income tax rate has no economically significant effect" on entrepreneurship and that "it would take a 50-percentage-point cut in the top income tax rate to generate a one-percentage-point change in entrepreneurial activity." By that measure, the increase of three to five percentage points proposed by Mr. Obama hardly seems like a small-business job killer.

Saturday, April 11, 2009

Taking the fight to the pirates

No Pain No Gain. By Seth Cropsey
Taking the fight to the pirates
The Weekly Standard, Apr 10,. 2009 4:15:00 PM

Barack Obama's good luck holds steady. When, for the first time in more than two centuries, pirates seized an American-flagged ship on April 8th, the 20-man American crew recaptured their ship hours later a few hundred miles east of the Somali coast. Although the captain remained a hostage, the recapture of the Maersk Alabama, a 17,000 ton container ship with a cargo of humanitarian assistance destined for Kenya, diminished potential public interest to a single individual, just as Iran's jailing of a single American journalist in late January relieved the new administration of having to address a crisis magnified by a large number of hostages. In the short term, the narrowing of these incidents to a couple of American citizens buys the Obama administration time as they search for solutions. The larger picture is more ominous.

The principles that are being tested in Iran and off the coast of Somalia hold no matter how many Americans are wrongfully detained by hostile governments or international outlaws: the United States is obliged to protect its innocent citizens. Failing to do so effectively invites more and bigger trouble. A similar principle applies to Chinese naval vessels' harassing of the unarmed U.S. Naval Survey ship, Impeccable, in international waters off Hainan island early in March. The Obama administration made diplomatic remonstrances and sent a destroyer to the area. This is not likely to have impressed China's leaders. The result is that there will be more such incidents--and not only in international waters near China--that test American resolve.

The hijacking of the Alabama offers President Obama an exceptional opportunity to act resolutely, justly, and effectively in reducing the likelihood of more attacks against American--and other--ships off the increasingly dangerous coast of east Africa, near one of the world's most important oceanic choke points: the Strait of Bab al Mandeb where the Red Sea empties into the Gulf of Aden. Some 20,000 vessels, most of them on their way to or from the Suez Canal or the Straits of Hormuz, pass through the gulf each year.

The ocean area that has become the pirates' hunting ground is immense, between one and 2.5 million square miles. In land terms, this ranges between roughly twice the size of India, and--at the lower end--an area about that of Argentina. NATO patrols the region with five ships besides three frigates from the European Union. The U.S. Navy maintains a presence of between five and 10 vessels. Notwithstanding, Lt. Nathan Christensen, the spokesman for the U.S. Navy's Fifth Fleet, noted that "we can't be everywhere at once," a remark that, while not aimed at the Pentagon's coming budget battle, is particularly appropriate given the slow, unabated shrinkage of the U.S. combat fleet. Lt. Christensen pointed out that the U.S. naval combatant nearest the Alabama when it was commandeered about 280 miles southeast of the Somalia pirate center, Eyl, was approximately 330 miles away at the time of the attack.

The U.S. and its allies are not the only contributors to the western Indian Ocean anti-piracy mission. China, India, Japan, and Russia as well as other nations have sent naval vessels to help secure the area.

Diplomatic efforts have paralleled naval ones. The United Nations Security Council in December 2008 unanimously passed Resolution 1851 whose title page "authorizes states to use land-based operations in Somalia." Subsequent language muddies this apparently tough grant of international authority requiring such government authority as exists in the minimally functional Somali state to notify the U.N. in advance of actual military operations. But since the resolution neither addresses nor prohibits less red-tape-bound military means, these remain possible. The same Security Council resolution directly supports international naval action to discourage piracy off the Somali coast.

Still, Secretary of State Clinton seems uncomfortable. She told a news conference on 9 April that "the administration is seeking a 21st century response" to piracy.

What could this mean? The basic requirements that senior Obama administration officials, including the president, have set as a standard for conducting foreign policy are all in place. The participation of many different navies off the Somali coast is diverse and multi-lateral. The U.N. has authorized the use of force against the pirates. Solid reason exists for taking full advantage of the careful work that preceded these measures: an attempt was made in international waters to steal American property, and an assault was made on an American crew. The American captain remains a hostage of the pirates.

Certainly, negotiations should continue for the captain's release and return. But, what then? Does a "21st century" response mean that with the crew and ship safely returned, the case is dismissed and we go about our business? This will guarantee more attacks on U.S.-flagged ships and American merchant marine sailors.

It will add to the appearance that the new administration's idea of a "21st century" response is one in which there are no consequences for those who violate international laws and customs in crossing the United States.

There are plenty of other reasonable alternatives that would send a clear message. If the pirates who seized the Alabama can be apprehended and transferred to a U.S. Navy ship, Title 18 of the U.S. Code allows them to be brought to the U.S. and, if found guilty, imprisoned for life. A more convincing approach would be to use the same unmanned aerial vehicles that have been operational since U.S. involvement in Bosnia to target pirates in the centers where they are known to congregate on land. Special operations missions could accomplish similar objectives, albeit with less plausible deniability.

Punishing the guilty would do justice, increase respect for the Obama administration while conforming to its standard of soliciting international approval, and decrease the likelihood of repeated attacks against Americans abroad. It might also provide the same benefit for mariners aboard ships carrying the flags of other states who go about their business peacefully in the region. This is more likely to increase respect for the administration abroad than ignoring direct challenges to the U.S. and packaging such sideways glances as policy that befits the 21st century.

Least likely to produce positive tangible result are approaches that bypass the administration's own foreign policy standard of multilateralism and UN sanction in pursuit of the additional and dubious requirement that wrongdoers escape serious consequences for their action.

The destroyer that was sent to the aid of Alabama is the U.S.S. Bainbridge. The ship was named for Captain William Bainbridge who served several tours in the American naval expeditions that eventually used force successfully to end the Barbary pirates' threat to American merchant shipping in the Mediterranean during the first two decades of the 1800s. Sometimes the 19th century, including the statesmanship of Thomas Jefferson and James Madison, is the most appropriate model for U.S. policy.

Seth Cropsey is a Senior Fellow at the Hudson Institute and served as a naval officer and as deputy undersecretary of the Navy in the administrations of Ronald Reagan and George H. W. Bush.

Analysis: Diminishing “Geneva rights”? General Noriega and extradition

Analysis: Diminishing “Geneva rights”? By Lyle Denniston
SCOTUS Blog, Friday, April 10th, 2009 9:33 pm

Excerpts:

From early in the U.S. government’s detention of individuals rounded up in the “war on terrorism,” the prisoners have been attempting to gain the protection of a major human rights treaty: the series of agreements known as the Geneva Conventions – a part of international law for 60 years. The Conventions bar the use of torture, abuse, humiliation and acts of indignity against those held in captivity during wartime.

[...]

However, in a filing with Judge Walton on Thursday, the Obama Administration — in its first formal argument on the point in court — took the position that Geneva rights cannot be enforced in court by detainees as they challenge their confinement. That is a position the Bush Administration had taken repeatedly. And that position has just gained new support in a federal appeals court, the Eleventh Circuit Court based in Atlanta.

The Circuit Court ruling, issued Wednesday, did not involve Guantanamo prisoners (the case, in fact, involved former Panamanian dictator Manuel Noriega, who is trying to prevent his transfer to France to be tried on new criminal charges). Nevertheless, the decision formed a part of the Obama Administration’s argument Thursday in opposing court enforcement of Geneva rights.

In the course of making that point, the new Justice Department put new stress on a more sweeping legal claim (also made repeatedly by the Bush Administration). The argument is that the courts have no authority, in detainee cases, to rule on the conditions of confinement at Guantanamo Bay.

Congress, the new filing argued, took away that authority in the Military Commissions Act of 2006, and the Supreme Court did not restore it last June in Boumediene v. Bush, recognizing habeas rights for Guantanamo prisoners.

Specifically at issue before Judge Walton is the Third Geneva Convention, formally known as the Geneva Convention Relative to the Treatment of Prisoners of War. The judge called for new briefs on a long-standing claim by the detainees to Geneva rights.

The detainees’ lawyers, in response last month, contended that the Convention does apply at Guantanamo, that U.S. courts may enforce those rights, and that, if the U.S. military is unwilling to obey the Convention there, the detainees should either be transferred to another country or sent to their home countries.

Countering that argument on Thursday, the Justice Department asserted that the Geneva plea is essentially a plea for the courts to oversee conditions of confinement. That is not within the reach of a judge in ruling on a habeas challenge, the Department contended.’

While complying with the Third Convention “constitutes an important and longstanding commitment of the United States,” the Department said, it is not enforceable by private individuals suing in court — especially those pursuing habeas petitions. It was on that point that the Department cited the new Eleventh Circuit decision in the Noriega case.

“The habeas statute,” the Department argued more broadly, “can b e used only to challenge the fact, duration, or location of confinement, not conditions of confinement.” And, it added, Congress in passing the Military Commissions Act nearly three years ago declared that no individual, captured anywhere in the world, may seek to enforce Geneva rights in U.S. courts.

The brief sought also to rely on a ruling earlier in the week, in Kiyemba v. Obama, finding that the U.S. government has broad authority to transfer detainees out of Guanantamo, against their wishes, without “second-guessing” by the courts. That decision, the Department said, makes clear that the Supreme Court’s Boumediene decision was limited only to the fact and length of detention, and not to anything beyond that.

[...]

U.S. resists rights at Bagram Air Base in Afghanistan

U.S. resists rights at Bagram. By Lyle Denniston
SCOTUS blog, Saturday, April 11th, 2009 9:20 am

The Justice Department, saying top officials have authorized a swift appeal, asked a federal District Court judge on Friday to put on hold a ruling that would extend some constitutional rights to detainees being held by the U.S. military at Bagram air base in Afghanistan.

At stake, the Department said in a new filing in U.S. District Court, is whether the constitutional right to challenge detention should be extended “for the first time to a theater of war on foreign territory over which the United States exercises neither de jure nor de facto sovereignty.” The Department insisted that the Bagram detention site was not being used just to put prisoners beyond the reach of U.S. courts.

It sought an order by District Judge John D. Bates to certify the issue to the D.C. Circuit Court even though the Bagram detainees’ case is still in a pre-trial stage. “If the Court of Appeals determines that these [detainees] cannot invoke the constitutional privilege of the writ of habeas corpus, then this Court would have no jurisdiction to proceed and litgation of these habeas cases will end,” the filing said.

The Department also asked Judge Bates to stay his ruling while the appeal goes forward, stopping all proceedings in his Court. It said that U.S. Solicitor General Elena Kagan authorized the plea “to seek an expedited appeal.”

“If this Court were to proceed with these cases during the pendency of the appeal,” the motion argued, “the Court would impose serious practical burdens on, and potential harm to, the Government and its efforts to prosecute the war in Afghanistan.”

The document brought the first full statement from the Obama Administration on its views about detainees in a U.S. military prison at the air base outside Kabul. Previously, the Administration had simply told Judge Bates, without elaboration, that it would follow the Bush Administration view that the Bagram prisoners have no rights to assert in U.S. courts.

White House officials also had said, when President Obama took office, that they did not expect to make any decisions about the Bagram prison for perhaps six months. The future of Bagram detainees is one of the issues now being reviewed by a task force studying detainee policy worldwide.

In Judge Bates’ ruling on April 2 (see this post), he concluded that the Supreme Court’s decision last June in Boumediene v. Bush involving rights for detainees at Guantanamo Bay laid down a legal framework that should be applied to Bagram, too, and perhaps other sites around the world where the U.S. military has significant control.

The judge had found that the government would not be faced with major difficulties if the habeas pleas of three Bagram detainees went forward in court. The Justice Department disagreed in its filing on Friday.

Responding in court to these three cases, ”and to the potentially large number of other petitions filed by Bagram detainees who may now allege that they are similarly situated,” the Department argued, “would divert the military’s attention and resources at a critical time for operations in Afghanistan, potentially requiring accomodation and protection of counsel and onerous discovery.”

Judge Bates had limited his ruling to just three Bagram detainees, saying they were not nationals of Afghanistan and had been captured elsewhere and simply transferred to Bagram for detention. Bagram, however, holds somewhere around 600 detainees; it is unknown how many of them would fit in the category covered by Bates’ decision; the judge himself said it would apply to only a limited number there.

The standard for allowing a pre-trial appeal to go ahead in federal courts is whether the dispute involves a “controlling question of law” about which there is substantial disagreement, and whether such an immediate appeal would help toward a final ruling of the controversy.

The Department contended that the issue of the Bagram detainees’ rights meets that standard. The question of the District Court’s jurisdiction over Bagram prisioners, it said, is a controlling legal issue.

It also argued that the Bagram situation is very different from that previaling at Guantanamo leading to the Supreme Court’s Boumediene decision. It also contended that it is not clear that the place where a detainee was captured has anything to do with the legality of detention.
Opinions also diverge, the Department contended, on whether Judge Bates’ ruling “encroaches on military judgments about where to detain an individual captured during an ongoing war.” There are “many legitimate reasons, having nothing to do” with trying to manipulate courts’ powers over detainees, on why the military chooses a particular site for holding a particular prisoner.

The document described a series of possible inhibitions of military choices about capturing and detaining individuals in wartime situations. Among them was a complaint that extending habeas to Bagram might keep the military from sending to Bagram individuals captured in Pakistan, whether the military does not have facilities for screening or detaining prisoners.

In asking permission for a swift appeal and for a stay of District Court proceedings, the Department said the Bagram detainees’ lawyers had said they would oppose the requests.

China's Naval Gambit - A challenge to America's dominance of the seas

China's Naval Gambit, by Michael Mazza
A challenge to America's dominance of the seas.
Weekly Standard, Mar 08, 2009 12:00:00 AM

The future of America's long-running dominance of the seas is under threat. The Department of Defense reported recently that the Chinese navy is continuing to modernize at a rapid clip. It is adding guided missile destroyers and nuclear and diesel-electric attack submarines to its fleet, and is developing over-the-horizon radars and next-generation anti-ship cruise missiles, and possibly even the first ever anti-ship ballistic missile. Not only have Chinese ships recently harassed unarmed U.S. naval vessels in the South China Sea, but according to reports emanating from Japan, China will likely complete construction on two conventional aircraft carriers by 2015, and will begin construction on two more nuclear carriers in 2020.

Recently, an influential People's Liberation Army (PLA) publication put these power projection plans in context. The newspaper described the concept of a "national interest frontier": national defense will be extended to include all areas of the globe where China has interests.

Unfortunately, these developments have received little attention in the United States. China, the thinking goes, presents only a potential long-term threat and its efforts to build carriers are not as frightening as North Korean and Iranian efforts to develop nuclear weapons arsenals. But China is already a nuclear power, and its ambitions far outreach those of its erstwhile friends in Pyongyang or its newfound friends in Iran.

Indeed, while the prospect of nuclear-armed rogues is alarming, China's rise provides a great threat to broader U.S. interests and to global stability and security. As a country whose "behavior as a responsible stakeholder has yet to be consistently demonstrated," as PACOM commander Admiral Timothy Keating has said, China's plan to acquire carriers should be raising alarm bells.

To be sure, China's efforts to develop a modernized, deployable fleet are not entirely unreasonable. China's economy is heavily dependent on maritime trade, and thus the safeguarding of shipping lanes is critical to Chinese security. One cannot fault China for sending destroyers to East African waters to protect its merchant fleet.

But given the many divergent U.S.-Chinese interests, it is important to consider the downsides of China's future naval plans. Protection of China's merchant fleet is certainly not the PLA Navy's only reason for building carriers and deploying ships far outside its territorial waters. China is acting to alter the balance of power in Asia and working to diminish U.S. presence in the region. The PLA has engaged in a significant build-up over the past twenty years. China's Air Force is on pace to have the largest air fleet in the region within the next decade. Their navy is developing blue-water capabilities, deploying new submarines at an unparalleled rate, and, now, is determined to add aircraft carriers to its fleet. And the PLA has modernized and grown its strategic conventional and nuclear missile force. In short, China is developing considerable power projection capabilities at a time when it faces no discernable external threats. Its cutting edge cyber and space weaponry are explicitly aimed at attacking American vulnerabilities. While China's strategic plans are not made public, the nature of its military build-up suggests that China is intent on reasserting itself as the dominant power in Asia. Only the United States stands in its way.

The forthcoming construction of Chinese carriers is thus not a welcome development. China has not shied away from gunboat diplomacy in the past, and the harassment of the USNS Impeccable, for example, shows that a growing Chinese naval presence in Asia is not a stabilizing force. "The Impeccable incident," Admiral Keating said, "is certainly a troubling indicator that China, particularly in the South China Sea, is behaving in an aggressive, troublesome manner, and they're not willing to abide by acceptable standards of behavior or rules of the road." The American navy must keep a close eye on its Chinese counterpart.

Since the end of World War II, the United States has been responsible for securing the seas in the Asia-Pacific. The presence of PLA Navy carriers will significantly complicate that mission. The idea that Chinese carriers will some day soon patrol the Asian seas is causing heartburn in Taiwan, Japan, Southeast Asia, and India as well. India is already concerned about China's increasing reach into the Indian Ocean; carriers in those waters would almost certainly spark a more spirited naval arms race. It is the U.S. Navy's security guarantee that has prevented such arms races since World War II, and has allowed the region to grow increasingly peaceful; this is why Asia is home to so many economic success stories, China included. Chinese carriers, and advancing "national frontier interests," can only destabilize the Asia-Pacific and lead it down a path that no state--save perhaps the People's Republic--wants to follow.

China's acquisition of carriers will not only destabilize the Asia-Pacific. Once the PLA Navy has deployed nuclear carrier battle groups, other regions could be within reach. China's naval capabilities could complicate the U.S. ability to take military action, both in the Pacific and elsewhere. Should the time ever come, for example, when Washington must seriously contemplate military action against Iran or terrorist training camps in Africa, how will the calculus change if there is a Chinese carrier in the Persian Gulf or the Mediterranean?

Given China's massive military build-up, its lack of military transparency, and its often provocative external behavior, Beijing simply cannot be counted on to act responsibly as a global power. China's neighbors are right to view its actions, its motives, and its explanations with suspicion, and America must do the same. A world in which Chinese carrier battle groups roam the seas is a less stable, less secure world. Unfortunately, there is likely little that can be done to prevent this eventuality. As the Defense Department has reported, the Chinese shipbuilding industry's ability to produce carriers is not in doubt, and the PLA has already begun training navy pilots to operate carrier-borne aircraft.

Fortunately, we do still have time to prepare countermeasures. It will be at least six years until China has carriers that are ready to sail, and longer still until they are operationally effective. Eleven more years will pass before construction on nuclear carriers even begins. But America cannot be lax in preparing for this eventual challenge. U.S. military planners must now determine what is needed to counter the threat posed by Chinese carriers.

President Obama must not allow short-term economic and security interests to blind him to long-term defense needs. We all hope China will prove itself to be a responsible great power in the years to come. But hope is no basis for policy.

Michael Mazza is a research assistant at the American Enterprise Institute.

A parody: A Special Warranty from General Motors

A Special Warranty from General Motors
Weekly Standard, Apr 19, 2009, Volume 014, Issue 29

A parody.

Libertarian views on UN's Global Green New Deal for Sustainable Development

The U.N.’s Global Green Raw Deal. By Patrick J. Michaels
Planet Gore/NRO, Thursday, April 09, 2009

Day by day, our government is taking more and more control over once-private corporations, with plenty of green strings attached. GM will be required to produce more hybrid cars that people won’t buy. Employee compensation will be determined by federal fiat. “Everyone will be better off.”

Not surprisingly, the United Nations has just jumped on President Obama’s hybrid bandwagon, demanding yet another trillion dollars (coming mostly from you-know-who) to fund “A Global Green New Deal for Sustainable Development.” Translation: The U.S. will provide funds to poorer nations so that they, too, can tell their private companies what to make, whom to employ, and how much to pay them. The U.N. wants your money pronto, by the end of next year.

The U.N.’s “deal” really amounts to drastic interference in the development of other nations that are neither recipients of nor contributors to the cool Trillion. India’s Tata Motors has just unveiled a $2,000 mini-car, which could be a hit in a lot of poor countries. China’s Cherry is poised for a global pounce as soon as liquidity reappears. But the U.N. proposes to spend our money fighting “automobiles, which are environmentally harmful,” promoting instead a “shift to clean public transport” which they then call “clean fuel buses.”

Huh? So the UN is hoping to close developing markets in poor countries to developing producers in countries a tier or two up the economic ladder, and then substitute a nonexistent technology?

Our researchers are still busy at work trying to figure out what a “clean fuel bus” is. It can’t be one run on ethanol, because that takes more energy to produce than we currently get out of it. If it‘s run on electricity produced by solar panels, the physics become daunting. An array required to run just one bus for 100 miles per day would stretch over ten miles. And where would the energy come from at night?

Like Obama’s initiatives, the U.N.’s purpose is to provide “green jobs.” Nothing new here. Germany put in a similar program a few years ago, sending out an army of people otherwise employed or not employed to install solar panels. German taxpayers subsidized each of these 35,000 jobs at $170,000 apiece. Now the UN wants to do the same with your money — all over the world.

Worse still, the “Green New Deal” wants energy subsidies from you — called global “feed-in tariffs” — to boost inefficient energy sources. This reverse tariff would “overcome” the “difficulty” of noncompetitive energy, providing guaranteed purchase prices to producers in developing countries for a period of 20 years. The electricity would then be sold to final consumers at a lower price.

What’s the difference between a “feed-in” tariff and a real one? There isn’t one. It basically says that anyone who has cheaper electricity for sale across national borders need not apply. As is the case with Obama’s cap-and-trade energy taxes here in the States, the U.N. says their tax on us is “desirable on climate-related grounds.”

Nothing is new here. The U.N. is hoping for more green stimulus from an already overstimulating and intrusive president, and returning more of the same: higher taxes, and technologies that won’t work and that will cost a fortune.

— Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and author of the forthcoming Climate of Extremes: Global Warming Science They Don’t Want You to Know.

California Wants to Ban Your Big Screen TV - This nanny state plan arrives in the name of energy efficiency

California Wants to Ban Your Big Screen TV. By Steven Titch
This nanny state plan arrives in the name of energy efficiency
Reason, April 9, 2009

They are coming for your television. The Orange County Register reports the California Energy Commission is considering banning the sale of big-screen TV sets that don't meet new, higher energy efficiency standards.

The proposed regulations will make many big-screen sets illegal. By 2011, the commission wants all large-screen TVs to use 33 percent less power. By 2013, sets must consume 49 percent less power. The bureaucrats say the regulations will reduce global warming and save consumers $18 to $30 a year.

If the law was enacted today, the Consumer Electronics Association says about 25 percent of TVs would be non-compliant, most of those being sets with screens of 40-inches or more. Considering that most manufacturers already work to meet voluntary Energy Star standards, it is questionable how much more state agencies can demand from manufacturers without forcing them to pass on these added costs to consumers, which means more expensive TVs.

There is also a huge question about how such a law would be enforced. Many California consumers would simply choose to purchase non-compliant TVs on the Internet, or drive to stores in nearby Nevada, Arizona or Oregon. As a result, local California-based retailers, who provide jobs and income to state residents, stand to lose the most from the ban.

The Energy Commission insists that it is not "banning" big screen TVs, but simply setting higher efficiency standards. But setting standards that few, if anyone, can actually meet is really just prohibition by another name.

The energy commissioners are really concerned about our prosperity. They fret that too many people are buying bigger TVs, hooking them up to Digital Video Recorders (DVRs), cable boxes, computers and digital cameras. We simply can't have that. These home electronics now consume about 10 percent of household electricity, according to PG&E. So here comes the state's nanny to tell taxpayers how they should be using electricity and to tell us we are using too much of it watching big screen TVs.

Ironically, these nanny-state tactics are unnecessary. Bureaucrats don't have to browbeat consumers into saving energy. The cost of power isn't getting any less expensive. You don't have to buy into the global warming doctrine to want to lower your electricity bills.

Many television manufacturers, well aware that their customers want to save money, are developing organic light-emitting diode (OLED) televisions that are much more power efficient than today's sets.

And Wired.com points out "most of the TVs that would be banned by the proposal would be larger TVs that are already losing steam in the market anyway... consumers are already ahead of the game here. No matter what happens with the proposal, energy-hogging TVs will be gone within two years."

As usual, customers and companies are ahead of the bureaucrats. To cover the added $18 to $30 yearly cost of that big screen TV, people might choose to turn down the air conditioner, do a better job turning off the lights around the house, or waiting until the dishwasher is full before running it. People can find plenty of ways to be economical when they have to. They might even choose compact fluorescent light bulbs.

Just as the commission seeks to ban big televisions, the state legislature tried a similar tactic with attempts to ban incandescent light bulbs. But the legislature wisely stopped short of an outright ban in favor of a list of requirements that light bulbs must meet in the future. That list, however, was intentionally malleable so businesses and consumers would have some flexibility. Legislators, unlike the energy commissioners, are elected officials and need to be somewhat sensitive to what voters want.

If the energy commission moves to ban big screens, I suspect the commissioners will learn Californians take their televisions very seriously.

Steven Titch is a policy analyst at Reason Foundation. This column first appeared at FreedomPolicitics.com.

Amazon Experts Cautious on Climate Threat

Amazon Experts Cautious on Climate Threat, by Andrew Revkin
Dot Earth/TNYT, April 7, 2009, 2:54 pm

The lure of the “front-page thought” — for both scientists and the press — was very much on display at the recent Copenhagen summit on climate change. Presentations and speeches were followed by a wave of coverage, primarily in Europe, focused on what many papers said was strong new evidence of pending climate calamity.

Some scientists who attended the meeting pushed back. Mike Hulme of the University of East Anglia criticized efforts to cast the six-point manifesto released at the meeting’s end as the product of a broad consensus (simultaneously published on the Prometheus blog). Other scientists, who study facets of how global warming could affect things that matter — in particular the Amazon rain forest — criticized what they saw as overstatements coming out of the meeting and have now followed up afresh.

Yadvinder Malhi, a professor of ecosystem science at the University of Oxford, and Oliver Phillips, a professor of tropical ecology at the University of Leeds, have written a response to a story in the Guardian on a modeling study that projected that the Amazon forest was poised to die off. The scientists contend in a response published today in the paper that the single study, not yet peer reviewed, was laced with uncertainties downplayed both by the scientists describing it and the resulting news story.

(Dr. Malhi also contributed to my recent article assessing what is, and isn’t known, about possible tipping points related to global warming.)

Here’s the take-home point from Dr. Malhi and Dr. Phillips:

Forest dieback is a possibility that should not be ignored, and the probability increases with increasing air temperatures; but it is not inevitable. What is clear is that climate change magnifies the threat from advancing agricultural development, as a drier Amazon will burn more easily….

Climate change is undeniably a serious threat, and our comments should not be seized upon as an excuse for delay or inaction. Rather, conserving Amazonian forests both reduces the carbon dioxide flux from deforestation, which contributes up to a fifth of global emissions, and also increases the resilience of the forest to climate change. The potential impacts of climate change on the Amazon forest must be a call to action to conserve the Amazon, not a reason to retreat in despair.

The Housing Crisis Isn't A Crisis - Stand back, says Todd Zywicki, and let the markets clear

The Housing Crisis Isn't A Crisis. By Peter Robinson
Stand back, says Todd Zywicki, and let the markets clear.
Forbes, Apr 10, 2009, 12:01 AM EDT

Law professor Todd Zywicki of George Mason University is composing a book, Bankruptcy Law and Policy in the Twenty-First Century, in which Zywicki picks a couple of fascinating fights.
One involves former Fed Chairman Alan Greenspan; the other, the entire band of academics, former business executives and career bureaucrats who make up the Obama administration's economic apparat.

Zywicki's altercation with Greenspan requires a word of background.

After retiring from the Fed in 2006, Greenspan enjoyed the kind of semi-divine status that used to be reserved for Roman emperors. Then a number of economists, notably John Taylor of Stanford, began to argue that the monetary policy Greenspan pursued from 2001 to 2004, when Greenspan expanded the money supply dramatically, represented a proximate cause--maybe even the principal cause--of the housing bubble.

Last month, Greenspan descended from his plinth to defend himself. As Fed chairman, he had only lowered short-term interest rates, he argued in the Wall Street Journal, not the long-term rates on which mortgage prices are based. "No one, to my knowledge," Greenspan huffed, "employs overnight interest rates--such as the Fed Funds rate--to determine the capitalization rate of real estate."

Enter Todd Zywicki.

"What Greenspan overlooks," Zywicki says, "are adjustable-rate mortgages. ARMs are really sensitive to shorter-term interest rates."

"Look at the data going back to nineteen-eighties," Zywicki continues. "When the spread between regular mortgages and ARMs is less than about 150 basis points, people tend to take out regular mortgages. But when that spread widens, they switch to ARMs.

"What Greenspan did was artificially drive down the prices of ARMs, widening the spread. Low interest rates on ARMs enabled ordinary Americans to get bigger mortgages than they would otherwise have believed they could afford. That pushed up home prices. And that created the updraft that brought in speculators."

From loose money to cheap ARMs to rising housing prices.

"Nobody acted nefariously," Zywicki says. "Greenspan was trying to save the economy, not wreck it. But he still created a bubble."

This brings us to Zywicki's disagreement with the Obama administration. Treasury Secretary Timothy Geithner, Director of the National Economic Bureau Lawrence Summers and the other adepts in the administration all argue that the bursting of the housing bubble amounts to a national tragedy. According to President Obama himself, the "crisis" is "unraveling homeownership, the middle class and the American Dream itself."

Zywicki's reply? Nonsense.

His research has revealed three distinct types of housing markets--and only one of the three shows real signs of distress. Even then, that distress is only in a limited number of areas.

The first type of market behaves the way markets are supposed to behave, with smooth adjustments between supply and demand. When prices rose in places such as Dallas and Charlotte, builders constructed new houses. When prices softened, builders stopped. "Prices in these markets rose gradually," Zywicki says, "and now they're settling back to earth. There hasn't been any tragedy."

The second type of market, which appears in New York, Boston, San Francisco and Washington, D.C., demonstrates a long history of price volatility. "The housing stock in these markets is constrained," Zywicki says, "either by geography--San Francisco is surrounded on three sides by water, for example--or land use controls." When demand in such a market increases, prices soar. And when demand weakens, prices plummet.

"But the people who live in these markets expect big price swings," Zywicki says. "They've learned to live with them. They're holding onto their homes because they're confident prices will eventually recover. Again, there hasn't been any tragedy."

The third type of market displays both the ability to expand the supply of houses that characterizes the first type of market and the price swings that characterize the second type. "Type three markets," Zywicki says, "are concentrated in the Sun Belt. Ordinary investors seem to have calculated that a lot of people would either retire or buy second homes in these places. And when prices went up, speculators moved in. Pure bubbles developed."

In type three markets, hundreds of thousands of new homes went up. This oversupply will now keep prices low for years. "Las Vegas, Phoenix, Tampa--those are the places you'll find the tragedies," Zywicki says.

Instead of frightening people by talking about the end of the American dream, Zywicki argues, the Obama administration should offer reassurance, stressing the specific, limited nature of the foreclosure problem. "Heck," Zywicki says, "41 out of the 50 states have foreclosure rates below the national mean."

Next, the administration should think long and hard about just who it wishes to bail out and why. "If we bail out anybody, they should only be people who want to stay in their homes but can't make the payments, not people who could make the payments but want to walk," Zywicki argues. The administration should consider helping homeowners, in other words, but not speculators--"and if you put no money down and don't have any equity in your house, you're not a homeowner."

The most important step the administration could take? To resist intervening in the housing market as a whole.

"Assistance for the relatively small number of people who are facing really tragic circumstances makes sense," Zywicki says, "but if the administration tries to push overall housing prices back up, it will only be asking for trouble. We overbuilt. That's the reality. And not even Obama can change it."

In short, the administration should learn from the example of Alan Greenspan. Even when it intervenes in the economy with the very best of intentions, the government has a way of producing disastrous consequences.

Stand back, says the professor at George Mason University--stand back and let the markets clear.

Peter Robinson, a research fellow at the Hoover Institution at Stanford University and contributor to RobinsonandLong.com, writes a weekly column for Forbes.

Politics is driving the destruction of the District's school voucher program

Presumed Dead. WaPo Editorial
Politics is driving the destruction of the District's school voucher program.
WaPo, Saturday, April 11, 2009; A12

EDUCATION SECRETARY Arne Duncan has decided not to admit any new students to the D.C. voucher program, which allows low-income children to attend private schools. The abrupt decision -- made a week after 200 families had been told that their children were being awarded scholarships for the coming fall -- comes despite a new study showing some initial good results for students in the program and before the Senate has had a chance to hold promised hearings. For all the talk about putting children first, it's clear that the special interests that have long opposed vouchers are getting their way.

Officials who manage the D.C. Opportunity Scholarship Program sent letters this week to parents notifying them that the scholarships of up to $7,500, were being rescinded because of the decision by the Education Department. Citing the political uncertainty surrounding vouchers, a spokesperson for Mr. Duncan told us that it is not in the best interest of students and their parents to enroll them in a program that may end a year from now. Congress conditioned funding beyond the 2009-10 school year on reauthorization by Congress and approval by the D.C. Council. By presuming the program dead -- and make no mistake, that's the insidious effect of his bar on new enrollment -- Mr. Duncan makes it even more difficult for the program to get the fair hearing it deserves.

That's not to mention the impact of the last-minute decision on these families. Many of the public charter schools already have cut off enrollments for the upcoming school year; the deadline for out-of-boundary transfers for the public schools has passed. No doubt Mr. Duncan is right about possible disruption for new students if the program were to end. But scholarship officials have been upfront with parents about the risks, and the decision really should be theirs. Let them decide whether they want to chance at least one year in a high-quality private school versus the crapshoot of D.C. public schools.

That, after all, is what this program is about: giving poor families the choice that others, with higher salaries and more resources, take for granted. It's a choice President Obama made when he enrolled his two children in the elite Sidwell Friends School. It's a choice Mr. Duncan had when, after looking at the D.C. schools, he ended up buying a house in Arlington, where good schools are assumed. And it's a choice taken away this week from LaTasha Bennett, a single mother who had planned to start her daughter in the same private school that her son attends and where he is excelling. Her desperation is heartbreaking as she talks about her daughter not getting the same opportunities her son has and of the hardship of having to shuttle between two schools.

It's clear, though, from how the destruction of the program is being orchestrated, that issues such as parents' needs, student performance and program effectiveness don't matter next to the political demands of teachers' unions. Congressional Democrats who receive ample campaign contributions from the National Education Association and the American Federation of Teachers laid the trap with budget language that placed the program on the block. And now comes Mr. Duncan with the sword.

Friday, April 10, 2009

In Defense of Partisan Politics

In Defense of Partisan Politics. By Pietro S. Nivola, Senior Fellow, Governance Studies
The Brookings Institution, Apr 06, 2009

Pietro Nivola outlines an upside to the intense polarization taking shape in U.S. politics. William Galston offers a response in “ One and Half Cheers for Bipartisanship .”

From the steps of the Capitol on January 20th, President Barack Obama appealed for an end to the politics of “petty grievances” and “worn-out dogmas.” The year 2009 was supposed to mark the dawn of a post-partisan era. With any luck, Democrats and Republicans would stop quarreling, and would finally get down to work together. The time had come, exhorted the new president drawing from Scripture, to lay “childish” polemics aside.

But childish or not, America’s partisan politics have remained as stubbornly intense and polarized as ever. To paraphrase more Scripture, the lambs remain unwilling to lie down with the lions. And there are few signs of partisan swords being turned into plowshares. Far from opening a new age of bipartisan comity in the House of Representatives, the president and the Democratic majority received not a single Republican vote in their first big legislative test, the roll call on the so-called American Recovery and Reinvestment Act (the “stimulus”). More recently, not one Republican in the Senate or the House voted for the concurrent resolution on the president’s budget. More, not less, of such party-line voting probably lies ahead.

So here’s a heretical thought: Maybe, among the many inflated expectations that we attach to the Obama presidency and should temper, those about the advent of “post-partisanship” ought to be lowered, drastically. In other words, get over it. The rough-and-tumble of our party politics is here to stay. What’s more—and this is even greater heresy—not everything about that fact of political life is horrible.


Majoritarianism

The Democratic and Republican parties today are each more cemented in their ideologies and more distinct than they were a generation ago. In Congress, party lines used to be blurred by the existence of so-called liberal Republicans and truly conservative Democrats. Now those factions are dwindling species. Why they are dying out is a long story that has been the object of an extensive study titled Red and Blue Nation? cosponsored by Brookings and the Hoover Institution at Stanford University. For present purposes, suffice it to recognize that the disputes between Republicans and Democrats are about more than “petty grievances” (though there are plenty of them, too); the party differences run deep and fundamentally reflect differing convictions held by large blocs of voters, not just their elected representatives. An example: Whereas a staggering 84 percent of Democrats seem to believe “it’s the government’s responsibility to make sure that everyone in the United States has adequate health care,” only 34 percent of Republicans evidently concur, according to a reputable national poll taken last November.

Because both parties are more cohesive, they are also more disciplined. If you are a member of Congress and you basically agree with your party’s position on most salient issues, why defect to the other side on key votes? Americans of the baby-boom generation are not accustomed to seeing this high degree of party unity. They remember the old days when the main way to do business on Capitol Hill was to cobble together ad-hoc coalitions. Want a civil rights bill? Get northern Democrats and Republican moderates on your side, and hope that you have enough votes to overpower the conservative phalanx of southern Democrats and states’-rights Republicans. Want more money for the Vietnam War in the 1960s? Combine solid support from that bipartisan conservative bloc with plenty of other hawkish stalwarts in both parties (think reliable GOP loyalists like Everett Dirksen but also Scoop Jackson Democrats), and you’d get the funds.

Increasingly, the contemporary party system bears scant resemblance to the one that prevailed a half-century ago. What it resembles instead is politics in most other periods of American history, for example the late nineteenth century when the two parties were also internally coherent and keenly at odds. During such periods, the American parties have behaved more like political parties in parliamentary regimes—where the in-party (the governing majority) rules, and the out-party (the minority) consistently forms a loyal opposition.

Notice this distinctive feature of the parliamentary model: Not only can the majority, voting in lockstep, prevail with no help from opposition members; all it needs on board in order to legislate is a simple majority of the legislators. Supermajorities—the requirement in the U.S. Senate to override a filibuster—are never the norm. A parliamentary system, in other words, operates much like our congressional budget reconciliation process where as little as a one-vote margin in the House and as little as 51 votes in the Senate suffice to adopt a bill.

There is much handwringing about the trend toward majoritarian—that is, parliamentary-style—politics in the United States. Democrats moaned when the GOP, led by George W. Bush, drove tax cuts through Congress on nearly a party-line vote with Vice President Cheney casting the tie-breaker. Now, Republicans will groan if the Obama administration and the Democratic congressional leadership opt to use the reconciliation procedure to ram health-care reform into law.

But is all the lamentation justified?


Accountability

One of the advantages of parliamentary democracy is that the electorate knows what to expect. What you see (or vote for) is what you get. As America becomes parliamentary, if voters elect a Republican president and congressional majority, here’s a good bet: Tax cuts will be on the way. If voters elect a Democratic president and congressional majority—running on a party platform that declares universal health care to be a “moral imperative”—guess what? Health-care legislation to extend coverage will happen. Now, granted one can debate the policy merits of either party’s priorities. Robotic tax-cutting runs up deficits—and so almost certainly will health care that covers everybody. But if the voters have explicitly empowered their elected officials to do either of these things, who are “we” to stand in the way?

Further, the voters have plenty of opportunity to change their minds. If they decide that mistakes are being made—or that they prefer an alternative agenda to the one being proffered by the party in power—they can throw the rascals out. Indeed, in this country, unlike practically every other democracy, the public gets a chance to entertain that option with extraordinary frequency: every two years.

Nor, from the standpoint of democratic theory, is it easy to make an airtight case for why Congress and the president should be forced to muster supermajorities to enact their most important priorities. Ours, like any sound democracy, has to balance principles of majority rule with minority rights. But a political order in which technically just over 7 percent of a legislature—that is, a sub-group that possibly represents as little as 10 percent of the population—can have the last word, as our Senate arithmetic can imply, raises serious questions of democratic accountability and even legitimacy. Let’s face it; making a regular practice of putting, in effect, veto-power in the hands of a minority is hard to square with a government of the people, by the people, for the people.


The Virtues of a Choice, Not an Echo

There is one other thing to say in defense of heightened partisanship: It has succeeded in making elections more interesting.

Voters have a tendency to become indifferent and apathetic when asked to choose between alternatives that display not “a dime’s worth of difference,” as the old saying went about our two-party system during the heyday of bipartisan comingling.

By contrast, as Marc J. Hetherington of Vanderbilt University demonstrates in a key chapter of Red and Blue Nation?, voter participation has surged as the partisan divide has grown sharper.
The electorate is not turned off by the chasm, and contestation, between the parties. On the contrary, Hetherington finds, the polarized political parties have animated voters of all stripes—liberals, conservatives, and moderates. Growing civic engagement and voter turnouts are hallmarks of a vibrant democracy, not of a “broken” one.

Keeping older employees will help maintain success

Aging Your Work Force, by Jeffrey Joerres
Keeping older employees will help maintain success.
WSJ, Apr 09, 2009

It's too soon to tell how the current global recession will affect the one of the greatest challenges facing corporate leaders over the next decade: the coming explosion in the number of workers at retirement age, and the inadequate pool of younger workers to fill those roles. Companies that haven't started planning for this transition have some catching up to do.

The loss of productivity and intellectual capital as baby boomers leave the work force could devastate some businesses. Europe's work force will begin shrinking in the coming years and is expected to become 15% smaller within five decades, according to the Organization for Economic Cooperation and Development. The countries that face the biggest threat are those with the oldest populations, particularly Germany and Italy.

Yet most firms seem woefully unprepared for this development. A 2007 Manpower survey of more than 28,000 employers across 25 countries and territories revealed that only 14% have strategies in place to recruit older workers, and only 21% have retention strategies to keep these workers on board.

More troubling, employers still seem to view coming retirements as cost-saving opportunities. This view is dangerous and shortsighted. Employers will need to shift their mindset and, in the short term, take steps to slow the exodus of older workers whose skills and knowledge are most valued. The conundrum is that the people with the skills that companies most need to retain are those who have the greatest financial flexibility to retire.

Part of the problem is that employers assume that all employees want to exit the work force as soon as they are financially able. However, especially given the current economic climate, a growing number of employees may be willing to work for years to come. Even in countries with state-funded pensions, which traditionally have encouraged earlier retirement, retirees may struggle in the future. Many national governments project pension-funding shortfalls as too few active workers pay for retirement programs with their payroll taxes.

The best way to stem the flow of older workers is to provide the type of employment they seek, and to keep them engaged by emphasizing their place as valued members of the team.

One of the biggest mistakes companies make is to alienate employees aged 50 and older by assuming they are no longer interested in training and career development. CEOs and other senior executives tend to be in their 50s or 60s, yet it is regularly assumed that middle managers of the same age are no longer interested in challenging work and development. If a former CEO is qualified to serve on a Fortune 500 firm's board of directors in his 70s, why wouldn't a manager at a comparable skill and experience level be just as capable of working in another capacity at the same age? Employers should not assume that retirement-age workers are only qualified for, or interested in, roles with low responsibility, such as volunteering at a hospital or serving as a "greeter" at a store.

The key to retaining older workers is to recognize that their priorities are changing, and to find roles that are of value to both them and the organization. Today, there are too few options available for individuals who wish to remain with their current employer, but in a modified working relationship as they transition toward retirement. This is a key reason why employers are losing older workers to self-employment. To date, the typical corporation's answer has been to offer the individual more money to stay and perform the same full-time job for an extended period of time, when he might prefer to work in a part-time arrangement.

An employer that offers flexible work options to both older and younger employees may find a distinct competitive advantage in recruiting and retaining employees. As the talent shortage grows, the balance of power in the employer-employee relationship continues to shift toward employees. They may be more likely to stay with their companies if they can improve their work-life balance, perhaps by having the flexibility to attend a grandchild's school play or care for an ill spouse.

At the same time, employers need to prepare successors to perform in critical roles and learn as much as possible before these expert resources leave the workplace. Long before key older employees leave, firms should develop transition and knowledge-transfer plans to ensure that they retain as much intellectual capital as possible. This should involve determining which roles are at highest risk of "brain drain," identifying high-potential candidates to succeed retirees, and ensuring their development is aligned with the retirees' exit cycle.

Developing a plan to preserve critical information, processes and contacts is vital. This can be done through mentoring programs or by building companywide groups that meet in person and online to share information. Another option is to develop a pool of retired employees to work as needed on specific projects, enabling the company to tap into their collective experience and retain this knowledge longer.

Longer term, employers will need to better use the talent of each employee throughout his career. Companies might do this by offering periodic skill and career-interest assessments and training programs, and by aligning individuals' interests and abilities to the needs of the organization so that they remain relevant and engaged. There will be no room for wasted talent in tomorrow's streamlined and talent-poor organizations.

This new approach to talent management will affect how individuals prepare for retirement. The second half of life must be planned just as carefully as the first half, particularly given changes in life expectancy and in some state pensions. To remain relevant to retirement-age workers, employers might offer to help them plan for the transition to the next phase of their lives. Such programs could address a host of possible work-life balance options, and a variety of potential financial impacts from both the individuals' choices and their personal situations.

There is also a clear need for national governments to focus their attention on these issues if they want a competitive labor market that will strengthen the country's future economy.

Some governments are already developing initiatives and incentives for companies to employ older workers, which in turn promote those workers' welfare and job security. The challenge for national governments is to align the interests and abilities of mature adults with the interests and requirements of employers -- and to do this before the pension bubble bursts, wreaking havoc on other areas of society.

Sustainable and growing economies will not be possible in the future without strong and vibrant labor markets, including those workers who helped contribute to growth in the past.

Mr. Joerres is chairman and CEO of Manpower Inc.