One expects hyperbole, demagoguery, and overall intellectual dishonesty from politicians.  In this column from the New York Times, however, Paul Krugman goes even further:  if you oppose cap and trade legislation, you're guilty of treason against humanity.  Yes, treason.  So, I sent the following email to Dr. Krugman, stating what regular readers of mine will recognize as a common question:

re:  Betraying the Planet

Dr. Krugman,

In your recent column, you criticized opponents of the "cap and trade" legislation as committing "treason against the planet" and acting with "immorality" and "irresponsibility".  You go on to mention researchers at MIT who are predicting a 9 degree rise in global temperatures by the turn of the next century.

While you don't mention whether there is competing research detailing various other potential scenarios, or what sets the particular research you cite apart from competing climate models, I think a more central question is this, based on your claims specifically against those in opposition to the Waxman-Markey bill:  precisely how many degrees would that bill lower temperatures?  One degree?  5 degrees?  0.1 degrees?  How, specifically, does passage of the cap-and-trade bill alter the computer models on climate change?  What percentage of arctic tundra will now not defrost, what percentage of polar ice caps will not now melt?  How much less in "grave danger" are "future generations of Americans" now in as a direct result of this legislation?

Failure to be able to answer this central, overarching question, seems to be laden with the same hyperbole and "politics as usual" you find so distasteful and immoral on the part of the dissenters.

Sincerely,
Dave Smith
Houston, TX

I realize I'm repeating myself, but in response to this editorial in the Chronicle, I sent the following letter:

re:  Cap and trade will clean and fuel our economy, too

In supporting cap and trade legislation, Messrs. Krupp and Liveris continue the same conceits common among advocates of such action.  First, they never spell out precisely how much such legislation will impact global warming.  Will cap and trade reduce global warming by 1 degree?  5 degrees?  0.1 degree?  Without knowing what the benefit will be, it is impossible to say that the proposed plan is a good one.

The authors go further in their conceit by claiming that the cap and trade approach is "market based".  Free markets emerge based on supply and demand and voluntary exchange, not government decree.  If a "market based" approach is desired, then a simple tax on carbon emissions would be the simplest option.

Finally, the authors mistakenly claim that somehow jobs and economic activity are created by the government increasing costs on business.  Government mandates don't "create jobs", they simply shift resources to less efficient and profitable endeavors -- otherwise, such acts wouldn't require government coercion.

Sincerely,
Dave Smith
Houston, TX

It has become a common refrain, repeated ad nauseum:  our current financial and economic problems are the result of deregulation, particularly of the banking and finance system.  Of course, this supposed deregulation is typically laid at the feed of George W. Bush, and typically no real evidence of such is given (with the occasional exception, such as Paul Krugman, who lays the blame on Ronald Reagan for signing a bipartisan financial reform act).

When claims of deregulation arise, it is illuminating to ask a few questions of the claimant.  First of all, what precisely was deregulated?  Typically, no specific claims of deregulation can be given.  Secondly, did the Code of Federal Regulations increase or decrease in size during the 8 years of the Bush Administration?  Thirdly, did the budgets for regulatory agencies increase or decrease during that same time period?  And finally, what about Sarbanes-Oxley, the massive regulatory bill put into place in response to the corporate scandals at Enron, WorldCom, etc.?

Upon asking these four simple questions, it is likely that you'll be called a "neocon" at best, perhaps even a fascist (which can prompt further questioning about the claimant's knowledge of the actual economic platform of the fascists; hint:  it was left wing, not right wing, as Jonah Goldberg has detailed) after which some exposition on the war in Iraq or Bush's buddies in "Big Oil" are likely to be brought up.  But what are the facts?

According to a study by the conservative Heritage Foundation, the answers are different than might be expected.  While President Bush liked to speak of limited government and free markets, his record was, of course, much different.  As the Heritage Foundation report relays (with footnoted references), while the rate of increased regulation slowed somewhat during the Bush Presidency, the budget for regulatory agencies increased from $27 billion to nearly $45 billion in the first 7 years of President Bush's time in office -- a 44% increase, even after considering inflation.  Total staffing for those agencies increased by 41% -- over 72,000 new regulators employed.  Over that same time, the number of pages in the Code of Federal Regulations grew by over 4500, and there were approximately 90 "major rule changes" -- changes that had an economic impact of over $100 million.

As President, Bush liked to talk about limiting government and promoting free markets, but all too often his record is one of increased government intrusiveness and restrictions on voluntary exchange.  Bush was not, contrary to the conventional wisdom, a deregulater, and our financial situation was not the result of deregulation, because it simply didn't occur:  regulation increased during the Bush Administration, and taxpayers and consumers, of course, were forced to foot the bill.

In speeches and through spokesmen, President Barack Obama has been laying out the case for government-centric health care reform, and Congressional Democrats have been crafting legislation to make it possible.  The ostensible goal is to expand access by providing "universal" health care coverage, extending insurance to the supposed 40-50 million Americans who currently do not have it, while simultaneous cutting costs and improving efficiency.  Unfortunately, "health care reform" that relies on more government interference in individual choice and the free market is exactly the wrong approach -- so wrong in so many ways that it is difficult to know where to begin criticism of the various plans.  While different in some of the details, each of the plans expands the government intrusion and restricts individual liberty; each of the proposals provides the wrong incentives to improving affordability; each of the proposals involves a massive increase in government spending -- spending that has to be paid for somehow.

Let's start with one of the main postulates used as justification for government involvement:  the number of uninsured Americans.  While claims by various groups vary, the official estimate by the Centers for Disease Control and Prevention is 43.6 million.  This doesn't mean those people are unable to access any health care; rather, it means that medical care must either be paid for out-of-pocket, by charities, or the cost spread around paying customers (typically insurance companies) when bills go unpaid.  The common narrative is that because health insurance is unavailable, uninsured sick people tend to visit emergency rooms, an option that is no one would consider efficient or economical.

However, looking closer at the numbers is instructive.  According to a Department of Homeland Security estimate, there were approximately 11.6 million illegal immigrants in the United States in January 2006.  It would seem reasonable to suggest that the overwhelming majority of illegal immigrants would be uninsured.  Should government policy seeking to increase health insurance coverage be based on providing coverage to people who came to this country illegally?  While I disagree with much of the anti-immigration sentiment that seems to pervade much debate about border security, I certainly don't find it acceptable to reward people who come here illegally with health coverage.  Therefore, it seems reasonable to subtract the population of illegal immigrants from the number of people to which health coverage should be extended.

So suddenly our 43.6 million uninsured Americans has decreased by nearly 27% without spending a penny of tax dollars or enacting a single government program.    Not a bad start.

A common reason given for going uninsured is that people can't afford the insurance, so it seems reasonable to look at income demographics.  As it turns out, according to US Census data, 7.2% of uninsured Americans have family incomes of more than $75,000 per year.  As with the illegal immigrant situation, it would seem reasonable that government policy need not be focused on providing insurance to people in the top 20% of all income earners.  We've now reduced our "target group" by another 3.1 million.  If you want to take the uninsured in families with incomes above $50,000 per year, you could subtract another 5.6 million.  Where we draw the line is obviously a point of legitimate debate, so for now we'll keep the cutoff at $75,000 per year.

What we've also not mentioned are younger workers who might not make large sums of money, but make a choice not to buy medical coverage; perhaps some of these workers are healthy, perhaps some have access to wealthy family members, perhaps many are just young and unwise.  I don't really know how to count the number of people in this group, so they won't be included in the overall calculations, but I wouldn't be surprised if there are at least 1-5 million people that fall into this group -- somewhere between 1-10%.

Even accepting that there's probably some overlap in the numbers presented above, it is at least a reasonable assumption that we are now working with a smaller, more manageable number of uninsured people -- approximately 15 million people less than previously thought.  The task of increasing access to medical insurance to the uninsured is less daunting at least.  What methods are there for reducing barriers to these individuals and families acquiring health care coverage?  Does it require government restrictions, mandates, and expansion?  We'll cover that issue in Part 2 to follow.

In the midst of economic bad news — the Bureau of Economic Analysis reports that the economy shrunk by 6.3% in the 4th quarter of 2008 and by an additional 5.7% in the 1st quarter of 2009, and another half-million jobs were lost in April  — some good news is starting to trickle out.  The Bureau of Labor Statistics reports that in April the Consumer Price Index was unchanged, hourly earnings were up and productivity increased.  Additionally, the Institute for Supply Management reports that new manufacturing orders grew in May for the first time in a while, and overall economic activity was up.  Other key indicators tracked by ISM that were still contracting were at least slowing in their negative growth.  The 3-month trend of the Dow Jones Industrial Average is positive, and Larry Kudlow reports that both housing and commercial construction were up in April.

So is the economy on the upswing, finally pulling us out of our doldrums?  Well, the Congress did pass the massive, $787 billion American Recovery and Reinvestment Act earlier this year — the so-called "stimulus bill" — with the claims by President Obama that it was critical to ending our economic slide and moving towards recovery.  He had urged Congress to act quickly to pass the bill;  Congress did so with little (in the Senate) or no (in the House) Republican support, and in spite of a letter signed by over 200 economists urging non-passage of the bill that appeared in the Wall Street Journal and the New York Times.

Is the so-called "stimulus bill" the source of our possible economic recovery?  Should recovery occur, no doubt the politicians instrumental in enacting the legislation — President Obama and Congressional Democrats — will claim credit for their efforts.  But a closer look is in order.

As promised by President Obama, the "stimulus" spending is being tracked by each agency and posted online at www.recovery.gov .  The numbers are interesting:  less than $37 billion has been spent thus far.  That is worth repeating:  out of $787 billion in the total stimulus bill (for projects that were supposedly "shovel ready"), less than $37 billion has been spent in an economy worth nearly $14 trillion per year.  For those counting, that's less than 5% of the total "stimulus" package and approximately 1/4 of 1% of the annual economy.

This begs some questions, but also seems to put the proponents of the spending package in a trap:  if the economic turnaround is the result of the government spending, thus meaning that only $37 billion in stimulus was necessary, why did we need $787 billion?  On the other hand, if the government spending is not the reason for the positive economic signs, then the economy must not have needed any stimulus.  Either way, it would seem that we don't need to spend the entire $787 billion.  It would also seem to suggest, as pointed out by Dr. Russell Roberts, Chairman of George Mason University's Economics department, that perhaps the bill wasn't as urgent as the politicians said it was — perhaps they could have actually read the entire bill after all.