Obamacare Unconstitutional?

I'm a Republican sympathetic to the argument that the individual mandate in Obamacare is unconstitutional. I have difficulty seeing how this is unconstitutional, though, under existing jurisprudence.

The test of whether Congress has acted within its power to regulate commerce -- when the target is not a commercial activity -- is whether the target of the regulation is an essential component to a comprehensive regulatory scheme. The mandate is clearly essential to Obama's scheme of redistributing wealth from the healthy/young to the unhealthy/old.

By precluding insurers from charging actuarially fair rates to those with "preexisting conditions," insurance companies could not stay in the business of providing coverage to the unhealthy. To make up for it, there must be profitability elsewhere. The young and healthy must inevitably be charged higher rates in order to compensate for the inability to charge the unhealthy and old actuarially appropriate rates. But the young/healthy wouldn't voluntarily buy health insurance at the actuarially unfair rates that they'll be charged as a result of the ACA. Therefore, Obama must compel them to buy health insurance in order for his redistributive plan from the young to the old to work.

I think this is an awful scheme and it's egregiously dishonest for the Democrats not to be forthright about what they're actually doing. But I don't think it's beyond their power unfortunately.

Dan Snyder's Curse

Owner's should be wary of the winner's curse in NFL free agency. It seems that we routinely see highly-regarded players bust in free agency. See: Washington Redskins.

The reason could lie in economic theory. It's the "winner's curse," or Dan Snyder's Curse. Assume the common critique of free agency is correct and that the teams that "win" in free agency by signing the big name guy actually regularly overpay for the player on average. The reason this may be is that teams pay for a player based on their estimation of his value: some definite, but unknown dollar amount.

The problem is that even the best scouts could never precisely predict a player’s value. Some overestimate his worth, others underestimate. The team that ultimately signs a player will be the one that maintains the highest estimation of his value, which likely is a team that overestimated and, as a result, overpaid.

Of course, this doesn't universally hold true. But the greater a player's bargaining power, the less the gap between his estimated value and his actual value will be (expected profit), and the more costly an error in estimation of his value is.

Ascertaining Greed

Self-righteous vitriol is rampant these days. Hurling "greed" at Wall Street has become a popular sport, but I submit that participation in the sport is a hopelessly hypocritical endeavor.

Isn't any income above a subsistence level inherently "greedy"? By definition, any amount beyond subsistence levels is not necessary. It only serves to further one's material interests in excessive comforts.

Moreover, the existence of a world of "rational actors" -- individuals who operate to maximize their own self-interests -- is the underlying assumption of most of public policy. What is so surprising about financiers being rational actors?

Do we really think that only a select group of businessmen maintain profit-maximizing motives (ie. greed, or "hubris" if you really want to go self-righteous, pseudo-intellectual)?

If we're ridiculing those who are greedy, the criticism should not stop at the financial sector. Doubtless, we all are regularly driven by the same motives of self-interest maximization.

The Libertarian Future or Present?

Maybe "South Park Republican" (read: libertarian) is an accurate description of generation X/Y conservatives.

The results of the straw poll taken of 1,757 CPAC attendees reveals some suggestive statistics. The poll does not break down the statistics by age group, but a slight majority of respondents were students.

While it is difficult to say that any of the positions voted on are necessarily contrary to a libertarian perspective, three of the four issues that received the bulk of attendee support are truly fundamental principles of libertarianism. Of the 12 possible issues, 43% of respondents rated reducing the size of the federal government as the first- or second-most important issue to them. The second-most supported issue, reducing government spending, received a cumulative 24% of the vote. At a close fourth, only behind winning the war against terrorism, was lowering taxes with a cumulative 22% of the vote.

"Promoting traditional values," the only issue listed that could be construed as possibly contrary to libertarian ideals, only received 4% "first-most" and 4% "second-most" votes. It would have been interesting to see how the vote broke on gay marriage, clearly contained within the amalgam of "traditionally values," but not necessarily an issue "traditionally values" immediately conveyed to the survey respondents.

Perhaps the poll is skewed by a slight majority of students. Perhaps it isn't. Either way, these results are a damning criticism of the present voice of conservatism's overemphasis on domestic social policy. At best, the message misrepresents the future of the Republican party. At worst, it misrepresents the party's present composition.

Deadly Rent-Seeking

Secretary of State Hillary Clinton and other opinionists are absolutely correct that Americans demand drugs and that the resultant profitability of drug trade into the United States through Mexico is fueling violence in Mexico to capture market share. However, that Americans crave a product, the sale of which is profitable, does not mean Americans bear moral culpability for the violence resulting from attempts to capture that market share. Americans demand many products (like corn, beef, sugar, televisions, clothing, etc.), the sale of which is profitable. Capturing market share for those products would likewise be more profitable for any individual producer or supplier (see: advertising). That Mexico has not been able to stop Mexican drug traders from violent rent-seeking is not the fault of Americans. The same violence could result from any product whose shipment required transportation through northern Mexico.

Antitrust Suspicions Vindicated

The Senate judiciary subcommittee on antitrust, competition policy, and consumer rights will hold hearings inquiring as to the anti-competitive implications of the BCS. Maybe Dartmouth will finally get a rightful opportunity to win the national championship. Well, once we climb out of the FCS (Division I-AA), that is.

Conflating Stimulating the Present and Robbing the Future

Milton Friedman warned in Free to Choose, "If all we want are jobs, we can create any number--for example, have people dig holes and then fill them up again or perform other useless tasks... Our real objective is not just jobs but productive jobs." Obama and Co. have proposed an economic plan that includes spending $200 million on employing people to relay sod on the mall -- $200 million to dig holes, and fill them up again.

Is the BCS an Antitrust Violation?

I'm from north Florida, about 45 minutes from Gainesville. My brother attends the University of Florida, and the majority of my high school friends are Gator grads. I will be in Gainesville on Thursday night with friends watching the National College Football "Championship" game between the Florida Gators and the Oklahoma Sooners. I am a devoutly loyal fan of a professional football team from north Florida, but I couldn't care less whether the Gators win or lose on Thursday.

The absence of a playoff system to determine the champion of college football completely removes all legitimacy from the sport, and I cannot devote time and emotion to something I don't believe to be legitimate. I know I'm not alone in my apprehension towards college football because of the bowl system. The collusive activity keeping the bowl system intact has restrained my consumptive interest in the sport, and the endless complaints about the system suggests that it restrains the interest of others, too.

This sparks a question: Is the existence of the bowl system to the exclusion of a an alternative, more reasonable system (read: playoff system) to determine the sport's champion a violation of antitrust law? The basic standard, if I recall correctly from undergrad, for establishing illegal anti-competitive business practices is whether the practices represent an "unreasonable restraint of trade." I've never heard an argument that could lead one to conclude that the bowl system is reasonable.

Here's hoping I get that coveted unpaid internship with the FTC this summer. I'm taking down Dartmouth Dining Services first, the BCS second.

Barney Frank, Paul Krugman, and the Apocalypse

It is a safe argument that congressional irresponsibility is a cause of the present recession. A rarer argument is that the irresponsible use of language by Democrats in congress is a cause of the recession. Accordingly, I'll fill the void and make it: the grossly inaccurate language of Democrats in politics, economics, and the media comparing the present economy to the Great Depression is a cause of the economy's problems, or at the very least stands to exacerbate them.

Consider that the short-term prosperity of the economy is foremost a function of consumption, and consumption is a function of consumer confidence and consumptive ability. Consumer confidence reached an "all-time" low in December since the Consumer Confidence Index was created in 1967. Yet consumptive ability, roughly measurable by the unemployment rate (6.7% in December), is only slightly worse than it was during the first recession of George Bush's presidency (6.3% in June 2003).

What are the determinants of consumer confidence? The economic condition of individuals is certainly a gauge consumers use, but given the disparity between consumptive ability and confidence, in this case it has clearly been overwhelmed by other barometers. It seems clear that two extraordinary conditions have primarily driven the extreme lack of confidence. The first is the erratic and dramatic behavior of the stock market during October and November. The second is the pervasive, apocalyptic language comparing the economy to the Great Depression among Democratic politicians and the media. The Dow has stabilized, but the apocalypse continues in relentless media reports.

If the nature and frequency of such reports continue, it stands to reason that consumption will be hindered by depressed confidence beyond that which it would if characterizations of the economy were accurate by Democrats and the media. The economy will suffer in the short-term as a result.

Barack Obama: Blinded by "Fairness", II

[Continued from “Blinded by Fairness, I”…]

Energy

Obama’s proposed “windfall profits” tax on oil companies would have a similar secondary effect, though more immediate and more intuitive. However, the senator’s determination to stick it to “Big Oil”, either in a grand pandering gesture to his supporters, has precluded him from heeding the wisdom arguing against such an imposition. Depending on the structure of the tax, it would at best increase the price of a gallon of gas to consumers and at worst discourage investment in alternative energy by those with the best resources to perform such research – Big Oil.

Consider if the tax were truly a tax on profits alone – that is, the government would take, say, 15 percent of Big Oil’s profits. Big Oil, like all firms, must decide whether to reinvest profits in either projects or to distribute them among shareholders. Let’s say that in the absence of this windfall, Big Oil could invest in an alternative energy project from which it expects returns of 7 percent. The alternative is to redistribute funds among shareholders who could otherwise invest in the stock market, from which, in a healthier situation, investors could expect, say, returns of 6.5 percent. Assuming equal risks of both projects, Big Oil would invest in the alternative energy.

Now, consider if Obama imposed a tax of 15 percent on total profits. The expected returns from a given project would shrink by 15 percent from 7 to below 6 percent. In such a circumstance it is most sensible for Big Oil to forego the investment in the alternative energy and to, instead, redistribute its profits to its shareholders, allowing them to invest in the stock market earning a more lucrative 6.5 percent return.

It is doubtful that even if Obama had considered or realized the adverse effects of such a tax to consumers and the environment his position would be considerably different. His Democratic base foams at the mouth at the thought of “Big Oil” and are, undoubtedly, similarly blinded by notions of fairness. Nevertheless, while it might be prudent politically that Obama adopt such policies, it is nevertheless disappointing that the candidate of “change” actually retains the same self-serving and publically costly characteristics of his peers.

Barack Obama: Blinded by Fairness, I

As the presidency of Barack Obama becomes increasingly imminent and as the economy continues to concern voters most, it is necessary to consider Obama’s capacity to handle complex economic issues considering he entirely lacks an academic or professional education on the mechanics and value of business whose singular motivating economic guideline is a pretense of “fairness.”

To be sure, fairness is a noble objective -- except, at the very least, when economic outcomes for all citizens are deteriorated, which Obama stunningly favors. However, like many efforts to promote economic equity, such as raises in the minimum wage, likely accompanying Obama’s proposals are plainly apparent costs tending to effectuate the opposite result. Obama’s alarming provinciality to realize the adverse effects of two of his simplest tax proposals demonstrates his inability to see beyond his subjective notion of fairness in the best interest of Americans.

Education

Obama rightly observes that the rising bill of attending college is problematic. He intends to halt this rapid upward movement by handing out $4000 to any individual who attends college and performs some form of community service. All else equal, students who performed the task would be better equipped to pay for schooling by $4000 per year. That’s hard to debate.

As it happens, however, in a monopolistically competitive market, as universities are situated, students are not the only actors. Universities determine the prices they set, and in the face of systematically greater demand, prices will naturally increase eventually entirely negating the effect of such a price increase. Assuming the supply is fixed in the time period under concern (because of requirements of a school’s charter, desired student-teacher ratios, or housing limitations, for instance) as in the diagram below, prices would ultimately increase $4000. If supply were not inelastic, the price increase would be some fraction of $4000.


Consider the situation mechanically. Let's say that the average family was willing to pay, say, $20,000 per year for college, and suppose that after hundreds of years of operations, the average university has determined that $20,000 is the appropriate price for its education. On the surface Obama’s proposed tax credit now sounds great, because college should cost the average family now only $16,000 per year as opposed to $20,000. However, since the family is willing to buy their child a college education at a cost of to $20,000, it is now willing to spend up to $24,000 to go to college. Recognizing this increased demand via increased application volumes and the well-publicized federal policy, universities desirous of renovating dorms, attracting better professors, or hosting more programs will increase their prices as much as students are willing to pay -- $24,000. Once prices adjust, the tax credit would confer no economic benefit on families, at a cost to the taxpayer of $10 billion.

To be fair, the entire price adjustment would be a “long-run” effect. That is, the price increase doubtfully would occur immediately, but, do not be fooled, in the presence of such a tax credit, prices would rise above and beyond the amount to which they would have risen in the absence of the credit. Indeed, many economists argue that much of the driving force behind the drastic increase in college tuition in the past decade, about double the rate of inflation, has been the proliferation of policies similar to Obama’s proposal.

Further consider the possibility that Obama were not reelected in 2012 and this credit were repealed. As it happens, prices are notoriously “sticky” downwards. Therefore, if the price would have risen naturally to, say, $25,000 in the absence of this tax credit in 2012 and it instead rose to $29,000, families would now have to pay $29,000 without enjoying the luxury of the $4000 credit. In such a circumstance, not only would the tax credit more rapidly effect price increases, but the ultimately represent a $4000 cost to the family.

[The second tax proposal is discussed in the next entry.]

A Shortcoming of Democracy

It’s politically and socially suicidal in this country to oppose fundamental aspects of representative democracy. Fearing charges of Platonic elitism, in making the following point today in a discussion in class I was compelled to preface it with “I’m not anti-American, but...” But, simply, when the personal interests of policy-makers are misaligned with the best interests of the country the results may be calamitous. Such appears to have been the result today when the House of Representatives rejected the proposed “bailout” bill.

The astounding $700 billion figure has been seared into the minds of the populace for about at least a week now. Yet, despite managing to muster strong opposition the legislation, it’s clear that the majority of the citizenry and the media do not even know (or do not care) how the money was to be used, what its ultimate costs would be, whom it was intended to benefit, how it would do so, or whom the culprits of the financial problem are.

First, it seems as though most Americans believe Treasury Secretary Henry Paulson ‘68 has proposed merely cutting a $700 billion check to affected banks, but the gesture would not have been the purely eleemosynary gesture to America’s wealthiest (“greediest”) individuals as opponents have portrayed it. It was to allow for the purchase of assets of some presently uncertain value. The ultimate cost of the plan would, only in the worst case scenario, have been $700 billion. That would only have been the final tab if every borrower linked to the assets were to default on his debt repayment. The bailout would have amounted to a long-term financial investment for the government, and, by-extension, the citizenry with the possibility of rendering a profit.

Most importantly, though, those who stand to be affected by either action or inaction are not merely the executives of an assortment of American banks, but virtually the entire population. In the short-run the Treasury’s purchases would have benefited those with employment and investment interests in the health of the financial sector; that is, virtually all individuals and businesses. For the mechanics of why the plan as proposed by Paulson was sound and plausible, see this recent report in The Economist. Sadly, this afternoon, the House of Representatives, no doubt conscious of the election a month away, rejected the proposed bill.

I’d rather not jump into the debate of culpability; but it’s worth noting that the average American (“Main Street”!!) is not free from the fault and pejorative “greed” that has been slung on banks lately. The questionable transactions were voluntarily undertaken by both parties. Charles Krauthammer nicely apportions the culpability .

Nobody questions the logic of the American judicial system’s requirement that in deciding the “truth” in technical subjects typically beyond the capacity of the average juror or judge, credible expert testimony must have been presented to the court. It’s a shame that the legislative system cannot operate similarly. Instead it has allowed the lay voter to decide the fate of perhaps the most significant piece of legislation before Congress in a generation without requiring that voters (or Congress, for that matter) have even a shred of understanding of the involved technicalities.

What was so special about democracy again?

When Arugula is Merely "Elitist"

I thought it had been long established that arugula-gorging Barack Obama is uppity. “Uppity … you say?!” Yeah, uppity:

up•pi•ty (adjective – Informal)

1. affecting an attitude of inflated self-esteem; haughty; snobbish.

Regarding Obama? Yeah, that sounds about right.

Accurately, at the GOP convention yesterday, Republican Congressman Lynn Westmoreland of Georgia, merely noting the obvious, called Obama “uppity.”

Unforeseeably, Democrats brought the pitchforks against Westmoreland after he "blew the cover" off his previously concealed racism. How could Westmoreland not have known, or have had the conceit not to care, that the term was first used by blacks in the 1880s to scornfully deride fellow blacks for their ambitiousness?!

Surely, given the The New York Times’ profound feelings on the matter, if Westmoreland had consulted the Times' online dictionary before first using the word, he would have realized the dangerous waters he treaded. Oh… no? The Times’ own dictionary doesn’t mention or suggest any racial or pejorative significance, but it does with other words that are commonly accepted as racial slurs? “Wop” is categorized as an offensive slang, but “uppity” is merely an informal adjective?

Strange. Everyone knows they’re both racial pejoratives, utterly unacceptable these days. I know every time I hear the word “uppity” used, it usually sparks a bitter inter-racial fight. And when I’ve slipped into using it myself, I know people have quickly apprehended me: “whoa… whoa… Thinking Man… I don’t know where you come from, but we don’t use that kind of language around here. Geez…”

It’s great that the Times made sure to call attention to Westmoreland's staunch conservative credentials, too. What an outrage it would be if everyone didn’t groundlessly associate conservatism with racism. Those public program-gouging niggards! (Oh…)

Taking necessary action, Jane Kidd, the chair of the Democratic Party of Georgia, didn’t hesitate to demand that Moreland apologize for “more of the same, tired old politics that are dividing this country.”

Actually, Ms. Kidd, these trivialities that the Times, its kin, and Democratic political leadership have manipulated to defame all conservatives represent the stale, exhausted politics that have led to the present congressional approval ratings of 18%.

On 77 Cents, Adjusting for Reason

Senators Barack Obama and Joe Biden are evidently throwing in the towel on their presidential campaign.

On Wednesday, at the Democratic National Convention, Biden avowed that he and Obama would “never give up until we achieve equal pay for women. That's the change we need.”

Efforting to exact equal standards and treatment in the labor market for women and men ought to be a moral compulsion for all policy-makers and employers. In political rhetoric, championing these efforts and repudiating present conditions, whatever they may be, also functions as a powerful, emotion-seizing assertion.

The implication of Biden's assertion, however, that women have not achieved equal pay, has been demonstrated to be ostensibly groundless and inapplicable to the present context. While it is true that in raw terms, the mean full-time, year-round working woman still earns roughly 77% of the average man, this superficial examination does not consider professional interest, academic background, or comparative domestic advantage. Eric Eide (2007) and Arrah Nielsen (2005) show that when accounting for academic major and/or professional experience the gender wage gap had disappeared entirely among college-educated men and women by the beginning of the decade. For an explanation of the various reasons why the gap still exists as it does in its absolute context, see Nielsen’s elucidation.

Of course, promoting economic, social, and political equality across gender is a necessary principle and should be manifested with prudent policy. Does gender inequality still exist in some form in the labor market? Almost certainly. Particularly at the highest levels of business and government, women still appear to be marginalized, intentionally or otherwise. Just look at the bigoted commentary made about Senator Hillary Clinton during the Democractic Primary election and now about Governor Sarah Palin just in the past couple of days. Nevertheless, concerns over systematically unequal outcomes of women in the American labor market are largely obsolete.

On the Conclusions of Self-Loathing Americans

Is Kobe Bryant, the reigning league MVP of the NBA, the Achilles heel of United States Men's Basketball Team?

As the United States men’s basketball team continues its quest at reasserting its global preeminence, one poorly challenged fallacy has permeated the conversation surrounding Team USA’s poor play in recent international tournaments: simply, the gap has closed between the talents of American basketball players and those of the rest of the world. This is an especially popular claim among those with dubious credentials to merit respected sports opinion –- arguably similar to my own -– and self-loathing American tendencies, such as NPR’s single sports correspondent. Even the highly qualified, America-loving Michael Wilbon has taken the position that the world has largely caught up.

Dissention to this opinion has largely rested on a defense of willful arrogance, even among some of sports journalism’s most respected members. Wilbon quotes his television sparring partner Tony Kornheiser as believing that the team’s path to Olympic victory this month is as simple as saying, “We’re back. We win.” Dan Shaughnessy reiterated this sentiment of unqualified supremacy on ESPN’s Rome Is Burning arguing that since basketball was created in America, Team USA will, therefore, win the gold medal this year.

Of course, that’s both logically and historically untrue. Since America last sent basketballers to the Olympics, they finished third, the first time the United States men’s basketball team did not return a gold medal since NBA players represented the country and only the third time in the sixteen Olympic basketball tournaments. The writing was on the wall even before the Athens Olympics, as team finished sixth in the 2002 FIBA World Championships. They also lost to Greece in the semi-final of the 2006 World Championships.

Nevertheless, this team ought to win the gold medal because has the best players in the world. Perhaps only Dirk Nowitzki, Yao Ming, and Manu Ginobili could even make the United States’ team. None would play among its starters.

Since 2004, USA Basketball has sought to address the apparent primary problem that a cast of all-stars practicing together for a month before the tournament does not constitute a team at all. It required a commitment of three years in the off-season by players in order for them to be eligible to compete in the Olympics. It sought to add players familiar with serving as backups professionally to be its own backups – in reality, though, only Tayshaun Prince fits the criterion.

The team’s performance has been generally promising hitherto, beating host China and a respectable Angola by 31 and 21, respectively, leading late in the 4th quarter of the latter by 33. But it’s clear now that if the United States’ team has any remaining deficiencies, it’s the relative advantage international teams enjoy of a familiarly shorter international three-point line (20 feet, 6 inches internationally; 23 feet, 9 inches in the NBA). Anyone who has watched either of the United States’ first two games has seen an overwhelming American performance kept close early and prevented ultimately from becoming a Dream Team-esque evisceration by the net-blazing three-point shooting of the Chinese and Angolans relative to the Americans.

After two games the United States’ team’s shooting percentage is a mere 26.7% (12-45). China and Angola combined for a 32.8% (19-58). That difference probably doesn’t sound many alarms; both China and Angola cooled off considerably in the second half. Consider, though, those stats against the teams’ field goal shooting efficiency (minus three-point shots): for the Americans, a 68.8% percentage; for its opponents, 39.2%.

Team USA’s opponents rely on what amounts to a long “mid-range” NBA jump shot, long since interred in the NBA playbook. In fact, many American coaches teach players explicitly not to take a long jump shot; rather, if they find themselves lingering beyond twenty feet, to step back behind the three-point arc and allow for a 50% return on successful attempts. The shot that is two or three steps farther forward is the international three-pointer, which players have been discouraged from taking and practicing for years. Furthermore, it would seem that, insomuch as adjusting to the international line is difficult, perhaps only Michael Redd, renowned for his “natural” shooting ability, would seem particularly suited for an agreeable transition; he is the team’s only “pure shooter” (please forgive the sports clichés). However, Redd presently averages only 13.5 minutes per game, much of which has come with the game’s outcome already determined.

That said, the team’s apparent disadvantage would be completely erased statistically if Kobe Bryant had been disallowed from taking any of the fifteen three-point attempts in the first two games. Without his shots, the team would have shot more efficiently than its opponents, 36.7% (11-30). Leaping to the assumption that this team shoots international three-pointers worse than those in the NBA may, therefore, be a bit irresponsible.

Nevertheless, it is clear that if teams with only a fraction of the talent of the United States squad will be able to defeat Team USA, this year, it will not be because they enjoy superior camaraderie and cohesion, as in prior disappointments, but because they enjoy an advantage -- systemically or on that given day -- at three-point shooting.

When Government Monopoly Works

It may come as both a surprise and a disappointment to other Thinking Men that I am not entirely ecstatic about beginning law school. Obviously there are the haunting nerves, uncertainty, and masochism that come with the first year of law school I would rather avoid. Inevitably, too, I’ll find myself comparing American with Dartmouth and lamenting the amenities of the latter that I’ve taken for granted, such as its extraordinary safety, pristine landscape, and incredibly cheap liquor. I’ve been coming to terms with the first two for a while, without having even moved to Washington yet, but today the third became painfully clear.

I was at Sam’s Club stocking up on living necessities for this coming year, when it came time to cross 'bourbon' off my checklist. Sam’s smacked me in the face with a $23 bill for a handle of Jim Beam. $23! I’m unfortunately unfamiliar with liquor prices in Florida, and in light of my evidently price inelastic preferences for average bourbon, I submitted and coughed up the cash.

The sting I felt in turning over the money derived from my accustomedness with paying $17.99 at the West Lebanon, NH liquor store the last couple of years, one of the state's 77 such stores. New Hampshire is one of 18 states where the distribution of liquor is controlled entirely by the state government. Prices are standardized throughout the state to suppress competition between stores. They do not sell any products with less than 6% alcohol, so the liquor stores do face competition from vendors of substitutable alcoholic products. Nevertheless, New Hampshire enjoys a government-controlled monopoly on the sale of liquor.

My inclination is to cringe at the thought of both a monopolized industry and one with substantial government intervention. My apprehensions with both are foremost that the prices of goods would skyrocket as a result of the government's inefficiency and the monopoly's profit-maximization, that the quality of the products would be inferior, and that the incentive for innovation would be absent. This is the doctrine of any basic microeconomics or industrial organization class.

However, in this case, not only does the government not produce the goods, but there is not much need for innovation in retail. Where it is necessary or useful for efficiency in sales, consumers can safely rely upon its development by other firms in private, minimally regulated markets. Indeed, in the presence of such an overwhelming excise (and sales) tax, even the ultra competitive, economies-of-scale wielding Sam’s Club can’t overcome the heavy tax burden and offer an equal product for cheaper than New Hampshire’s inefficient monopoly. Indeed, the prices are so alluring that the stores frequently draw in customers from neighboring states.

Consider further that the New Hampshire state liquor commission provides $100 million of tax revenue to the state annually, and New Hampshire’s setup looks like a truly preferable alternative to a privatized system. Of course, in the absence of enormous taxes, a perfectly competitive private marketplace would be ideal for consumers. But in an industry where innovation is limited and taxes are greater than the reduction in prices that competition and efficiency represent, a public monopoly is better for consumers, producers, and the government. The losers in this arrangement? Would-be owners of liquor stores. Plenty of other commodities and brands devoid of a cumbersome excise need to be delivered to consumers. If retail is truly their calling, they can fill one of those job openings.

On the Suppression of Dissent

The message and argumentation in “On the Treatment of 5th Graders” was unclear to some. One reader, Andrew, communicated his concerns in the "Comments" section beneath the post. I would like to respond to Andrew’s contentions here so that other readers of The Thinking Man’s Man do not miss my clarification.


Thank you for the comments, Andrew. First of all, I apologize if my message was unclear. Not expecting anyone to actually find this site or carefully read it, I probably didn’t shape my argument as well as I could have or should have.

However, to clarify for those who care, the point I was trying to make in my post was that it's evident to me that there does not exist a consensus or necessarily an overwhelming majority among knowledgeable individuals on both the causes of climate change and the ecological effects of a unit of human pollution. The greater point that I was trying to make was that probably the vast majority of the public is in the dark about even the existence of this debate in the first place, and that the panic in popular and political sentiment over global warming is dangerous for policy.

To illustrate this latter point I tried to provide a couple of examples where two vocal members of the Green movement irresponsibly argue the merits of alternative energy and the evidence for the existence of global warming. The claim that I was making here was that the majority of the public is unaware that there would even be value in challenging Gore’s pathetic claims or the Big Green Bus’ erroneous illustration. If global warming is undoubtedly caused by humans and if Gore and the Big Green Bus fully understand the problems, why challenge them even on their sloppy arguments? All one would get is more concrete evidence.

The purpose of the post was not to debate the merits of each or either side. In fact in the post, I disclaim any authority over the details of the debate, so your charging me as ignorant is redundant. I note that I am not a scientist and don’t pretend to be and that I likely won’t ever understand the complexities of any hard science, let alone geophysics. I also indicated that I fully believe global warming has existed since at least the Industrial Revolution.

What I don’t believe is that there is anything close to a consensus among even the most capable scientists on the effects of human activity on global warming. And to exaggerate them with hyperbolic dialogue and erroneous scientific reports will only exacerbate the present energy problems. Assuming the earth’s climate is not reaching a “tipping-point” in the short-run, the economic interests of Americans in a difficult time for consumers should trump efforts to limit human contributions to global warming until the effects are fully understood and emissions can be appropriately regulated. The most responsible approach to policy is the one that considers all arguments and facts that are as close as possible to the “truth”. In this case, the “truth” about the extent of human contributions to global warming has yet to be established.

I’m sorry that that opinion elicited so much animosity. Though I am somewhat stunned by Andrew’s causticity, as I feel that my position is as open-minded as possible, I can’t say that I’m terribly surprised. This is the dismissive derision I warned readers to expect in my original post. I questioned claims of a consensus and the integrity of the argumentation of two prominent Green activists, and Andrew excoriated me. However, Andrew’s qualms are misplaced, and I would like to address each specifically here.

To Andrew’s specific concerns:

Issue 1

First, the consensus. The IPCC's latest report represents the the published, peer-reviewed findings of more than 2,000 scientists, all compiled together. It represents one of the widest collaborations in the history of science, by some of the most respected scientists in their fields. By citing an outdated article written in 2006, you've missed the boat on the latest news. Update yourself
…
As for your study of scientists from Alberta (an oil drilling province) who disagree with global warming. Well, Alberta is probably a bastion of cutting edge science, right? That's where Harvard, and Princeton, and Columbia scientists count themselves as members? Hardly.

First, of the 2,000 individuals who composed the IPCC’s latest report, most were not scientists, as you claim, but politicians. Second, to hold as gospel the reports of a wing of one of the most corrupt institutions in world history indicates a gross dearth of even basic analytical thinking. Indeed, many of the individuals who composed the report have a financial interest in presenting evidence of substantial global warming. That it was peer-reviewed – possibly by individuals interested in promoting the Green cause – does not mean that it is without flaws or fabrications, minor or significant.

To update you on where the debate now stands, the IPCC appears to be back at the drawing board. The basic IPCC model developed for predicting weather patterns in that 2007 report has since been mathematically discredited by a recent study, which was also peer-reviewed. Problems include flaws with the computer model’s fundamental climate-predicting formulas, as well as the inability to predict the cooling of the oceans since 2003, the rise in global mean surface temperature since 1998, or the possible decline in temperature since 2001, among a host of other deficiencies. Indeed, even the polished, peer-reviewed 2007 report contained major flaws, and the IPCC has had to recant a number of the report’s claims and findings.

And as far as the scientific consensus is concerned, the entire issue of the recent July 2008 edition of Physics and Society, a quarterly journal produced by the American Physical Society, is devoted to scientific debate about global warming. In his opening commentary, the editor acknowledges:

There is a considerable presence within the scientific community of people who do not agree with the IPCC conclusion that anthropogenic CO2 emissions are very probably likely to be primarily responsible for the global warming that has occurred since the Industrial Revolution. Since the correctness or fallacy of that conclusion has immense implications for public policy and for the future of the biosphere, we thought it appropriate to present a debate within the pages of P&S concerning that conclusion.

This is the position I have taken all along: that there is a debate worth considering and that if politicians come to false or exaggerated conclusions, unnecessarily disastrous policy could result. That there exists an extensive debate within this publication about the principal causes of global warming indicates that the issue is, by definition, still debatable within the scientific community.

I included the Albertan poll of 51,000 scientists merely to show that a very large amount, in both absolute and relative terms, of scientists do not agree with the mainstream opinion of a largely anthropogenic influence on climate. It is the only substantially large poll of scientists taken to my knowledge. While I do appreciate your highly favorable opinion of Ivy Leaguers, that these scientists are not unemployed by Ivy League universities does not mean that they are incompetent. They are professional engineers, geologists, and geophysicists. To me, those credentials merit an opinion worth considering and respecting.

Do these engineers and geophysicists have a stake in opposing the mainstream’s views? Perhaps. If an energy company is their employer, they naturally have an interest in that company’s success. However, to discredit the voice of 50,000 people simply for their residence in an oil-producing region is a bit of a stretch. Abundant coal mines exist in Pennsylvania and near Ithaca, NY, but one would be a fool to blindly disregard the opinion of physicists and geologists from the University of Pennsylvania or Cornell University merely as a result of that coincidental residence. Furthermore, the composers of the IPCC specifically commissioned to produce a model of the effects of human activity on global warming are more likely to have a directly financial stake in substantiating their opinions than the Albertan scientists.

Issue 2

The Big Green Bus' website does not suggest that all emissions from vegetable based sources are equal. If you took the time to read the site you'd realize that, like the article you chose to refute their point, they acknowledge that not all biofuels are equal - that some are bad and some are good (it depends on the process you use to make them). So, strike the validity of your 2nd point.

Again, I am afraid you are mistaken. I am not certain what you have read, if anything, but the discussion of biofuels on the Big Green Bus’ website does not include any mention of the environmental problems the resources present. Read the whole thing. The only shortcomings acknowledged are that many biofuels are economically impractical and that increased production of ethanol may have contributed to recent increases in food prices.

In fact, contrary to your assertion that “they acknowledge that … some (fuels) are bad and some good” relative to oil, the Big Green Bus’ website plainly lumps all biofuels together as being in a group less pollutive than oil:

Plants take in CO2 from the atmosphere to grow, then their carbon structures are burned to release energy. By burning the organic matter, carbon is released back into the atmosphere. This carbon is then absorbed by other plants, closing the loop. Petroleum based fuels pull carbon out of the ground and release it into the atmosphere, making more of a line.

Their claims, in print and in picture, that all biofuels are ecologically better than oil are plainly false.

Issue 3

As for the effects of global warming, you neglect to mention the really serious ones. Storms attract the headlines, but if any large ice sheets melt, sea level rise could force millions and millions of people to be inundated, creating waves of climate refugees. Thats one of the real problems, but by conveniently (or would it be inconveniently) neglecting to bring it up, you've skewed the debate.

Thank you for the explanation, but I am fully aware of the potential cataclysm of a warmer earth. With a masterful command of science, The Day After Tomorrow conveyed that to me several years ago.

You, however, are the one skewing the debate here. You don’t understand the role my reference to storms, floods, and wildfires had in my discussion. Al Gore pointed to recent storms, floods, and wildfires as evidence to rebut Tom Brokaw’s remark that there exists a debate in the scientific community about global warming. I used that comment as a piece of evidence in support of my argument that many prominent activists in the Green movement have presented intellectually irresponsible arguments in the conversation about global warming. I was not saying that the effects of a warmer earth are merely storms and wildfires; I was saying that the existence of storms and wildfires is insufficient evidence that humans influence the climate.

Gore, the Big Green Bus, and many activists like them – such as, evidently, yourself – have polluted the dialogue about global warming by swiftly denouncing any dissenting opinion and/or by contributing to the discussion in an intellectually irresponsible manner.


I hope this clarifies my position and argument in the post “On the Treatment of 5th Graders” for you and other confused readers. I welcome additional commentary.

On the Treatment of 5th-Graders

Man, if Al Gore was right about one thing, it was those Internets. Without them, my intellectual contributions to the community of Thinking Men would be limited to my own head. If Gore was right about another thing, it’s that the use of fuel has become quite inconvenient. Clearly, with the price of a gallon of gas exceeding $4.00, oil, at least, is increasingly economically inconvenient. Despite claims and popular opinion to the contrary, though, the extent of its ecological inconvenience is still debatable.

Through the efforts of Gore and his audible legions, inquisitions into the actual danger and existence of man-made global warming have regrettably become taboo. Question any aspect of the Green movement and expect to be met with dismissive derision. To do so is to risk being called a conservative. Direct the question at Al Gore or Dartmouth College’s members of the Big Green Bus, two highly intelligent and extremely visible advocates of the movement, and they’ll treat you as though you’d lose magnificently in Are You Smarter than a 5th Grader?

For example, the Big Green Bus’ website, in an attempt to explain the wondrous effects of operating on vegetable oil rather than standard gasoline, employed the following illustration of the carbon cycle:



Of course, the suggestion here is that carbon emissions from an automobile using vegetable oil would have no net effect on the environment. Indeed, it seems to be a natural process. However, if the carbon cycle functioned in this perfectly cyclical manner, then how could carbon emissions from burning petroleum be harmful?

As it happens, many forms of biofuels, including that on which the Big Green Bus runs, are actually more pollutive than gas. However, the existing discourse suppresses this insubordination to the Green cause.

Meanwhile, Gore rebuts questions about the validity of his claims in An Inconvenient Truth and the existing debate in the scientific community about the extent of anthropogenic contributions to global warming with the following:

There's really not a debate in the mainstream scientific community. It is the most serious threat that our civilization has ever faced. Look at the fires out in California right now. Look at the epic flooding in the Midwest. Look at the stronger storms, and all predicted. The, the entire North Polar ice cap, Tom. Been there three million years, it's the size of the lower 48 states, and the scientists now say that there's a 75 percent chance it'll be completely gone during the summer in, in as little as five years. This is happening on our watch. We have got to respond.

There have never been floods or storms before? There have never been wildfires before? Strange, because it seems (please forgive my anecdotal evidence, Mr. Gore) that almost every summer there are rampant fires in California. And they are so dangerous because Californians are too afraid to permit necessary, controlled burns of underbrush.

Gore bases many of his assertions on a climate model developed by the UN, whose accuracy has been significantly discredited. A new study published in Physics and Society, a publication of the American Physical Society, notes that, at best, that model overstated the effect of CO2 on temperature by 500-2000%, if it isn’t completely unreliable. Meanwhile, despite Gore’s claims, several more studies reveal that the span and thickness of ice in the arctic is at near-record highs and that average earth-surface temperature has actually decreased in the last couple of years. Clarifying Gore’s claim of a consensus, a recent polling by the Association of Professional Engineers, Geologists and Geophysicists of Alberta of more than 51,000 scientists found that only 26% attributed global warming to “human activity like burning fossil fuels.”

So much for a consensus.

Now, I don’t doubt global warming exists or has existed until recently. I’ve seen enough seemingly reliable evidence to indicate that it is. Indeed, the world warmed and cooled on its own long before the avarice and recklessness of the Industrial Revolution provided us with the means to destroy the world ourselves. However, as an individual with a background merely in the social sciences, I do not purport to understand, in even the vaguest manner, the complexities of the hard sciences like Gore or most advocates of the Green Movement.

If the emission of greenhouse gasses does have an adverse effect on the climate, “emissions trading” is the most efficient policy to both deter pollution and then rectify the harm it causes. However, the efficient application of that policy requires that policy-makers understand the cost to society of a unit of pollution. And it seems that, as of yet, the members of the American Physical Society aren’t close to agreeing on the harm of a unit of pollution.

Considering that about 10% of United States’ GDP is expended on energy, overstating the effects of energy in an emissions-trading marketplace would represent an incredible waste of resources and could be economically disastrous. Unfortunately, many individuals and groups interested in “spreading awareness” about global warming have displayed an inclination for hyperbole and fabrication with the details of global warming.

Before proper policy can be made, further investigation into the causes and effects of global warming must first occur, while both politicians and their constituents must maintain an open mind about the actual ramifications of human activities.

On the Curse of Maurice Clarett

The United States Army officially notified Caleb Campbell, recent West Point graduate, on Wednesday that he would not be allowed to pursue a career in professional football without first fulfilling his obligations to the Army in a “full-time, traditional” manner. This mandate came shortly after the Department of Defense overruled the Army’s long-standing policy that permitted West Point graduates capable of playing professional sports to fulfill their obligations to the Army as recruiters if they were to make an active roster.

The policy change came a day before Campbell, a seventh-round draft pick of the Detroit Lions this year, was to report to Lions training camp and a day after Campbell reportedly agreed to a three-year contract with the Lions, though he had yet to sign it. A number of commentators have argued that the timing of change in the rule is the problematic issue in that it’s cruelly unfair to Campbell. I agree that if the military was in the business of fairness and comity, it will have undermined the credibility of its dealings in either.

However, beyond fairness, the timing of the rule change could be legally problematic, and he ought to be grandfathered in under the previous rule, an open contract Campbell could agree to. The Detroit Lions undertook costly actions to secure the rights to Campbell’s labor: they scouted him, exhausted one of their limited draft picks, and earmarked a portion of their similarly limited “rookie pool” salary to allot to Campbell in arranging a three-year contract, to which he reportedly verbally agreed. None of those would have happened had the Army’s long-standing policy not been in place.

Campbell and the Lions could plausibly fight this issue in court. Sadly, the Lions and Campbell likely won’t because Campbell isn’t a top prospect. The likelihood that he would have made the team is uncertain in the first place. To the Lions, Campbell’s value may not be worth much more than some undrafted rookie safety, whose talents wouldn’t come with the cost of legal fees and the possible public condemnation for interfering with military operations during a period of war. Out of deference to and a fear of affronting an employer he clearly respects, Campbell will doubtfully challenge the Defense Department’s mandate.

Or perhaps Campbell recalls the gloriously catastrophic career of Maurice Clarett and the result of his attempt to sue for the right to play in the NFL. And anyone in his right mind would take a promising career as a military officer over what Clarett has become.

On Shooting Up Fox

One of hip-hop’s few remaining respectable talents – indeed, my favorite – Nas and representatives of ColorOfChange.org attempted to deliver boxes filled with 620,127 signed petitions to Fox News’ headquarters in New York City yesterday. The petition claims that its signers want network president Roger Ailes to “find a solution to address racial stereotyping and hate-mongering before it hits the airwaves.”

In reality, the 620,217 petitioners merely sought to carry out a wanton attack on the one prominent news network whose commentators’ political opinions consistently do not reflect their own. When asked later that evening on the Colbert Report to explain his grievances with Fox News, Nas, a professional wordsmith, could not even muster the weakest anecdotal or circumstantial evidence of any transgression on the part of Fox News:

“I mean it’s obvious. Anybody that has eyes and ears can see that [Fox News anchor Bill O’Reilly] is out of control. He knows what he’s doing. You know what I mean? It’s out of line, and the things he’s saying is [sic] worse than the worst rap lyrics I’ve ever heard.”

Stephen Colbert couldn’t maintain his character in the face of Nas’ mind-numbingly hypocritical claim, pausing before responding, “O’Reilly?!” Presumably, Colbert's astonishment was partly the result of his familiarity with Nas’ own advocacy of murder in songs such as “Shoot ‘Em Up," the chorus of which is: “Shoot ‘em up. Just shoot ‘em up. What? Kill, kill, kill. Murder, murder, murder.”

Nas’ demonstration is merely one formal attestation to the more discouraging and shameful issue that a large, vocal sect of liberals – at least 620,127 strong – cannot tolerate views contrary to their own and the individuals who hold them. Despite regularly purporting themselves as the group of tolerance, many liberals cannot themselves tolerate the existence of conservative thought and have shown a willingness to act to stop its expression. Similar to the ColorOfChange’s demonstration yesterday, in 2005, Democratic Representative Maurice Hinchey led the attack on conservative talk radio, introducing legislation to restore the unconstitutional Fairness Doctrine, which endeavored to suppress conservative commentary on the radio.

The same ghastly intolerance motivated the deplorable actions of protestors at an anti-war demonstration last week in Santa Barbara, where individuals spat on a veteran of the Iraq War, repeatedly called him a rapist, and slung other profanities at him. This attitude compels, condones, and even encourages the hateful speech hurled at conservatives and President George W. Bush, in particular, heard on that same video, in Nas’ comments about O’Reilly, and over the course of the last 7.5 years.

Beyond blotting the respectability of progressives and their message at large, the hateful hypocrisy of this sizable sect of liberals further exacerbates the destructive partisan acrimony plaguing political discourse these days. This antidemocratic attitude undermines the respectful, intellectual dialogue necessary for constructive and responsible public policy. Sadly, this is just fine to this movement’s spokesman: “When [O’Reilly] wants to come holla at me, be ready for Hannibal Lecter," Nas said in 2007. "He don’t [sic] deserve an intelligent explanation.”

On Oozing Rashes

Brett Favre’s pesky “itch” to return to the NFL has developed into a festering, puss-spewing infection afflicting the Packers’ standing with their supporters, Favre’s remembrance (perhaps), and presumably Aaron Rodgers’ psyche. While ESPN’s degreeless, English-butchering “analysts” continue to debate the situation daily by mulling the same concerns of who’s being unfair to whom and the significance of Favre’s catharsis to Greta Van Susteren, two critical issues remain unconsidered by the professionals thinkers.

As with any decision between options, it is imperative to consider both the short-term and long-term impacts of the available options at hand. In the short-run it is unknown who is the better player, Favre or Rodgers. Favre played terrifically last year, playoff game-losing interceptions notwithstanding. However, each of the two years prior Favre played horribly. So, weighting each of the last three seasons equally, there is a 33.3% chance that Favre will be even a capable player this year. Weighting last season more because it’s more recent, there’s about a 50% chance he’ll be good again. Rodgers, meanwhile, played very well in the one game he saw considerable time last year, and even though it was also against a very good team, it would be irresponsible to assume his performance from less than one full game is representative of his performance over the same period. In the short-run, the benefits of the performance of Favre relative to that of Rodgers are uncertain, if unlikely. There are also the well-documented costs to the Packers of being perceived by their fans as having dissed one of the franchise's best players ever.

Most importantly, though, – and this is what has been completely absent from the discussion – are the long-term implications if the Packers decided to retain Favre as their starter. If Favre were to return as the team’s starter, Rodgers would spend the fourth year of his five-year contract as the team’s backup quarterback. Assuming Rodgers were to start the following year, the final year of his contract, the Packers will have invested five years of a first-round pick’s salary in Rodgers, and their return would be one season of production as a starter. (Of course, this were to depend on Favre abdicating after this season, a big contingency if he had his way.) Even worse than that, they would have only his production from his first season as a starter on which to base their decision of whether to offer him a contract the following year – and for how much and for how long. What if Rodgers got hurt in preseason next year? How would they decide on his career? Even if he stayed healthy, though, how many quarterbacks impress in their first year as a starter? How different would the career paths be of so many quarterbacks – and the successes of so many teams – be if teams had to make a long-term financial commitment to a player after just his first season? Troy Aikman and John Elway might have been cut from the Cowboys and Broncos. Worse yet! Vince Young might have landed an even greater commitment from the Titans.

Further still, how many quarterbacks, after three years as a starter would have merited a different outcome than ultimately happened? Byron Leftwich probably would still have a starting job in Jacksonville. (And he’d be successful.) And David Carr would still be holding back the Texans.

If the Packers’ dilemma is an issue of fairness, consider how dreadfully unfair it would be to Aaron Rodgers to allow him to enter free agency in what would be the beginning of the prime of his career without having had the opportunity to prove his abilities to potential employers. Any contract offer he would receive would be diluted with caution and uncertainty. Not allowing Rodgers to capitalize on his professional talents at the peak of their value in the labor market, out of deference for the dithering desires of another washed up player, would truly be what is unfair here.

It isn’t an issue of fairness, though. It’s one of what is in the Packers’ best interest. And the Packers need to be able to know if Rodgers should be the team’s long-term quarterback. That requires that Rodgers be the team’s starting quarterback for at least two seasons, of which this year will be the first.

So the Packers should let Favre’s itch and hurt feelings fester all they want. They’re making the prudent decision to kick him to the curb, even if most haven’t yet realized why.

Introduction

I’m a late entrant to the “blog-o-sphere” so I don’t expect to be creating a deadspin.com or dickmorris.com any time soon – or ever – but I would like to voice opinions on matters that the media at large, politicians, "analysts", athletes and/or other relevant individuals have not expressed entirely or adequately.

Since I am a late entrant, I expect my first several entries will be on topics that have already been heavily traversed: the Iraqi War, McCain v. Obama, Brett Favre's return, etc. I intend to do so because I believe my opinions on these matters are both highly significant to the conversation surrounding each issue and have been absent or inadequately presented to this point.

I expect my future posts will pertain mostly to current events in sports and politics. I'll probably digress into other nerd-related topics (ie. I'm planning on analyzing Risk strategies... and I'm an avid trading card collector) from time to time, too, though.

I look forward to contributing the public discourse and to hearing your thoughts on my thoughts.