Saturday, May 27, 2017

Robots vs. Humans

There has been a lot of talk recently about robots taking jobs from Humans.  There is concern for consequent widespread unemployment, a focus on better education so that Humans can compete, etc.  Nobody seems to know what to expect, which engenders fear.

There is no need for concern.  A perfect model for what the robot future will be like for Humans is already available: Robots and Humans will become like Humans and Dogs.  Ahhh, for the dog's life.  Come on you tech guys - get to work.

Friday, May 26, 2017

Obama Administration's Massive and Unconstitutional Surveillance Programs

Jonathan Turley's blog has the following.
With the steady stream of controversies swirling around the White House, there has been little attention given a highly disturbing report that the Obama Administration engaged in previously undisclosed and violations of the Fourth Amendment.  Just a few days from the 2016 election, the Foreign Intelligence Surveillance Court (FISA) reportedly raised a highly unusual alarm over the creation of “a very serious Fourth Amendment issue” by possibly unconstitutional surveillance conducted under President Barack Obama.  If true, this should be given equal attention to the other stories crowding our front pages and cable coverage.  The Obama Administration has a well-documented history of abuse of surveillance and stands as one of the most antagonistic administrations toward privacy in our history.  Indeed, if true, many of the former Obama officials currently testifying against the Trump Administration were responsible for a far broader scope of abusive surveillance programs.

Recently disclosed top-secret documents from the FISA court suggest that the government admitted that the NSA was regularly violating surveillance rules. Not that these violations were occurring after the unconstitutional surveillance programs revealed by Wikileaks and Snowdon were curtailed.  It also would have occurred after the disclosure that the Obama Administration put journalists under surveillance.

The FISA indicate that the government informed the court that NSA analysts had been violating rules, established in 2011, that protect the privacy of citizens on the Internet.  Once again, the NSA claimed new “inadvertent compliance lapses.”  The Court noted in its dealings with the NSA a certain “lack of candor” in its disclosures to the FISA court.

It is very rare for the FISA court to make such statements.  (For full disclosure, I had occasion to go to the FISA court when I was an intern with the NSA and later became a critic of the court).  The standards for FISA are so low and easily satisfied (with little judicial review) that it is difficult to establish any illegality under the law.

Passed in 1978 as a compromise with the Nixon Administration, FISA allows for “foreign intelligence” surveillance and was designed to evade the fourth amendment protections governing the use of warrants.  FISA surveillance is permitted based on a finding of probable cause that the surveillance target is a foreign power or an agent of a foreign power. That is manifestly different from probable cause to believe someone has committed a crime.   It is true that, if the target is a “U.S. person,” there must be probable cause to believe that the U.S. person’s activities may involve espionage or other similar conduct in violation of the criminal statutes of the United States.  However, citizens can be collateral to the primary target under FISA. In 1994 Congress extended FISA further to allow for covert physical entries in connection with “security” investigations, and then in 1998, it was amended to permit pen/trap orders. It has been used to gather business records.

By any measure, this story deserves the attention of the national media and Congress.  However, it is being buried in the crush of controversies related to the Russian investigation, embarrassing leaks, and other items. The media is correct in pursuing these legitimate stories but it should also give attention to this chilling report. There was equally limited coverage of the expansion of surveillance authority in the final days of the Obama Administration.  Privacy advocates have serious concerns about these privacy stories being pushed from public review.

The Armed Citizen

Thursday, May 25, 2017

The Manchester Bomber and Refugee Restrictions

The Manchester Bomber (MB) turned out to be the son of Libyan refugees, born in the UK.  Some media personalities, politicians, and talking heads have taken advantage of this to point out, often gleefully, that Trump’s desired restrictions on refugees would not have prevented the MB from doing his dirty work because the MB is not a refugee.  This logic is appalling – so appalling and faulty that, once again it is clear that their anti-Trump political agenda trumps (pardon the pun) what may be good for the country.

The MB’s parents are refugees, hence if Trump’s restrictions had been in place when the parents immigrated to the UK, they may not have been admitted and the bombing might not have occurred.  Moreover, refugees that are admitted to a new country often tend to live among other refugees and maintain their own culture, in some cases complete with the same adversarial relationship with their new country’s culture and people that is responsible for the violence perpetrated by their home countries on their new countries.  This has turned out to be the case with the MB’s parents.

Contrary to what the gleeful anti-Trump crowd claims, the fact that the MB was born in the UK is actually a reason for, not against, refugee restrictions.

Tuesday, May 23, 2017

Wind Is An Irrelevance To The Energy And Climate Debate

Here is a column by Matt Ridley.  MR is on target.  He points out the problems with wind (and solar) that the environmentalists forget to tell you.
The Global Wind Energy Council recently released its latest report, excitedly boasting that ‘the proliferation of wind energy into the global power market continues at a furious pace, after it was revealed that more than 54 gigawatts of clean renewable wind power was installed across the global market last year’.

You may have got the impression from announcements like that, and from the obligatory pictures of wind turbines in any BBC story or airport advert about energy, that wind power is making a big contribution to world energy today. You would be wrong. Its contribution is still, after decades — nay centuries — of development, trivial to the point of irrelevance.

Even put together, wind and photovoltaic solar are supplying less than 1 per cent of global energy demand. From the International Energy Agency’s 2016 Key Renewables Trends, we can see that wind provided 0.46 per cent of global energy consumption in 2014, and solar and tide combined provided 0.35 per cent. Remember this is total energy, not just electricity, which is less than a fifth of all final energy, the rest being the solid, gaseous, and liquid fuels that do the heavy lifting for heat, transport and industry.

[One critic suggested I should have used the BP numbers instead, which show wind achieving 1.2% in 2014 rather than 0.46%. I chose not to do so mainly because that number is arrived at by falsely exaggerating the actual output of wind farms threefold in order to take into account that wind farms do not waste two-thirds of their energy as heat; also the source is an oil company, which would have given green blobbers a excuse to dismiss it, whereas the IEA is unimpleachable But it's still a very small number, so it makes little difference.]

Such numbers are not hard to find, but they don’t figure prominently in reports on energy derived from the unreliables lobby (solar and wind). Their trick is to hide behind the statement that close to 14 per cent of the world’s energy is renewable, with the implication that this is wind and solar. In fact the vast majority — three quarters — is biomass (mainly wood), and a very large part of that is ‘traditional biomass’; sticks and logs and dung burned by the poor in their homes to cook with. Those people need that energy, but they pay a big price in health problems caused by smoke inhalation.

Even in rich countries playing with subsidised wind and solar, a huge slug of their renewable energy comes from wood and hydro, the reliable renewables. Meanwhile, world energy demand has been growing at about 2 per cent a year for nearly 40 years. Between 2013 and 2014, again using International Energy Agency data, it grew by just under 2,000 terawatt-hours.

If wind turbines were to supply all of that growth but no more, how many would need to be built each year? The answer is nearly 350,000, since a two-megawatt turbine can produce about 0.005 terawatt-hours per annum. That’s one-and-a-half times as many as have been built in the world since governments started pouring consumer funds into this so-called industry in the early 2000s.

At a density of, very roughly, 50 acres per megawatt, typical for wind farms, that many turbines would require a land area [half the size of] the British Isles, including Ireland. Every year. If we kept this up for 50 years, we would have covered every square mile of a land area [half] the size of Russia with wind farms. Remember, this would be just to fulfil the new demand for energy, not to displace the vast existing supply of energy from fossil fuels, which currently supply 80 per cent of global energy needs. [para corrected from original.]

Do not take refuge in the idea that wind turbines could become more efficient. There is a limit to how much energy you can extract from a moving fluid, the Betz limit, and wind turbines are already close to it. Their effectiveness (the load factor, to use the engineering term) is determined by the wind that is available, and that varies at its own sweet will from second to second, day to day, year to year.

As machines, wind turbines are pretty good already; the problem is the wind resource itself, and we cannot change that. It’s a fluctuating stream of low–density energy. Mankind stopped using it for mission-critical transport and mechanical power long ago, for sound reasons. It’s just not very good.

As for resource consumption and environmental impacts, the direct effects of wind turbines — killing birds and bats, sinking concrete foundations deep into wild lands — is bad enough. But out of sight and out of mind is the dirty pollution generated in Inner Mongolia by the mining of rare-earth metals for the magnets in the turbines. This generates toxic and radioactive waste on an epic scale, which is why the phrase ‘clean energy’ is such a sick joke and ministers should be ashamed every time it passes their lips.

It gets worse. Wind turbines, apart from the fibreglass blades, are made mostly of steel, with concrete bases. They need about 200 times as much material per unit of capacity as a modern combined cycle gas turbine. Steel is made with coal, not just to provide the heat for smelting ore, but to supply the carbon in the alloy. Cement is also often made using coal. The machinery of ‘clean’ renewables is the output of the fossil fuel economy, and largely the coal economy.

A two-megawatt wind turbine weighs about 250 tonnes, including the tower, nacelle, rotor and blades. Globally, it takes about half a tonne of coal to make a tonne of steel. Add another 25 tonnes of coal for making the cement and you’re talking 150 tonnes of coal per turbine. Now if we are to build 350,000 wind turbines a year (or a smaller number of bigger ones), just to keep up with increasing energy demand, that will require 50 million tonnes of coal a year. That’s about half the EU’s hard coal–mining output.

Forgive me if you have heard this before, but I have a commercial interest in coal. Now it appears that the black stuff also gives me a commercial interest in ‘clean’, green wind power.

The point of running through these numbers is to demonstrate that it is utterly futile, on a priori grounds, even to think that wind power can make any significant contribution to world energy supply, let alone to emissions reductions, without ruining the planet. As the late David MacKay pointed out years back, the arithmetic is against such unreliable renewables.

MacKay, former chief scientific adviser to the Department of Energy and Climate Change, said in the final interview before his tragic death last year that the idea that renewable energy could power the UK is an “appalling delusion” -- for this reason, that there is not enough land.

The truth is, if you want to power civilisation with fewer greenhouse gas emissions, then you should focus on shifting power generation, heat and transport to natural gas, the economically recoverable reserves of which — thanks to horizontal drilling and hydraulic fracturing — are much more abundant than we dreamed they ever could be. It is also the lowest-emitting of the fossil fuels, so the emissions intensity of our wealth creation can actually fall while our wealth continues to increase. Good.

And let’s put some of that burgeoning wealth in nuclear, fission and fusion, so that it can take over from gas in the second half of this century. That is an engineerable, clean future. Everything else is a political displacement activity, one that is actually counterproductive as a climate policy and, worst of all, shamefully robs the poor to make the rich even richer.

Monday, May 22, 2017

Your Government at Work Destroying Your Freedom

George Will in the Washington Post
A blind spider creeping through America’s judicial thicket might be heading to the Supreme Court, which will have to decide if the contentment or even the survival of the Bone Cave Harvestman spider species, which lives only in two central Texas counties, is any of the federal government’s business. If it is, what isn’t?

The U.S. Fish and Wildlife Service (USFWS), which administers the Endangered Species Act, is blind to the limits of its imperium, which it thinks encompasses telling John Yearwood what he can and cannot do on the ranch that has been in his family since 1871. To stymie the USFWS, Yearwood must surmount, among other things, a precedent involving Roscoe Filburn, the Ohio farmer whose 1942 loss in the Supreme Court mocked the doctrine that the federal government is one of limited, because enumerated, powers.

Filburn was minding what he thought was his business when Washington taught him that the Constitution’s commerce clause (“Congress shall have power to . . . regulate commerce . . . among the several states”) means that almost everything is the federal government’s business. To stabilize prices, the government set production quotas not only for wheat sold into interstate commerce but for wheat consumed on the farm for animal feed. Filburn expressed his dissent by producing 269 bushels in excess of his quota and refusing to pay the fine.

 His insubordination reached the Supreme Court, which by then was thoroughly deferential to the New Deal’s capacious theory of federal power. The court held that Congress could regulate even Filburn’s wheat that never reached interstate commerce, because that wheat “supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce.”

Seventy-five years on, recent decisions have brought commerce clause jurisprudence closer to the Founding Fathers’ intention as presented by Chief Justice John Marshall in McCulloch v. Maryland (1819). The clause requires a “plain” connection, not merely attenuated chains of inferences, between a congressional act and an enumerated power. Furthermore, recent decisions require not only that a federal statute pertain to “activities having a substantial relation to interstate commerce,” but also that the statute pass muster under the necessary and proper clause: Congress may “make all laws . . . necessary and proper” to executing enumerated powers. A statute, Justice Clarence Thomas has said, must be “appropriate,” bearing an “obvious, simple, and direct relation” to an enumerated power.

A lower court has sided with the USFWS against Yearwood, dogmatically postulating that all species are “interdependent.” Therefore, even the tiniest bit of the ecosystem is presumptively implicated in potentially substantial effects on interstate commerce.

So, Yearwood, who hitherto made his property available cost-free to 4-H, church and military groups for camping, horseback riding and other activities, has stopped this, and even ceased clearing brush to reduce the risk of snakes and fires, lest he be subject to federal prosecution for disturbing, harming or endangering the spiders. Indeed, such is the federal government’s unsleeping solicitude for the spiders, it says they must be protected from other bugs, such as fire ants. Reverence for nature evidently requires preventing natural competitions.

Judge Alex Kozinski of the U.S. Court of Appeals for the 9th Circuit has written that modern commerce clause decisions make one wonder why it is not called the “Hey, you-can-do-whatever-you-feel-like clause.” So far, the spider story — the application of the Endangered Species Act to an entirely intrastate species that is neither bought nor sold nor traded in interstate commerce — demonstrates that federal power, like kudzu, will expand everywhere and into everything until it is stopped.

The Supreme Court can stop it if the spider case gets there. The court can apply its 2005 ruling that congressional regulation of intrastate, noncommercial activity is proper only when the activity is an “essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated.”

Furthermore, in 2012, while Chief Justice John G. Roberts Jr. was irritating conservatives as he saved the Affordable Care Act by creatively construing some of its provisions, he simultaneously held that even a necessary exercise of power under the commerce clause is not proper if it “would work a substantial expansion of federal authority.” The blind spider might make other courts, and the rest of the government, see the Supreme Court’s 1995 ruling that the government may not “convert congressional Commerce Clause authority to a general police power of the sort held only by the states.”

Friday, May 19, 2017

Elizabeth Warren: A Politician Who Will Make Things Worse

Here is a column from that shows Elizabeth Warren is likely to make things worse for you.  What the column describes should be taken as an indication of EW's philosphy of governing - and that she is not the kind of person that is good for your health - or freedom.
It sounds good - and that's the problem.

Massachusetts Sen. Elizabeth Warren has proposed legislation that would make it perfectly legal to buy hearing aids over the counter.

Great, right?

The thing is it is already legal to buy them.

Warren’s dishonestly titled bill — the Over The Counter Hearing Aid Act of 2017 — would regulate them.

Some clarification is necessary.

Currently, it is legal to buy some “hearing aids” — more accurately known as personal sound amplification products, or PSAPs — without a prescription. Over the counter, online — however.

For example, the speaker manufacturer, Bose, sells a product called HearPhones; there are many other such. These are used to enhance normal hearing — very much like TV’s Six Million Dollar Man used his bionic ear, to hear things people without normal hearing but not assisted hearing can’t hear or have trouble hearing.

PSAPs are also purchased as low-cost alternatives to hearing aids, which are strictly regulated by the FDA and which currently require a doctor’s prescription.
These often cost thousands of dollars.

People without thousands of dollars can currently buy PSAPs — available at stores like Wal-Mart for $20 or so — much in the same way that anyone can buy magnifying or reading glasses — which are likewise readily available at most supermarkets and drug stores without any bureaucratic middlemen or a doctor’s prescription.

No one seems to have a problem — yet — with people buying low-cost reading glasses on their own without government “help.”

The key point is these PSAPs, though sometimes used as an alternative to hearing aids, are not the same things as the hearing aids prescribed by a doctor. But Warren’s bill would treat them as such for regulatory purposes, granting the FDA sweeping new powers to micromanage their manufacture and sale — thereby increasing costs.

Low-cost PSAPs as an end-run around prescription hearing aids would go the way of the Dodo, leaving potentially millions of people who can afford a PSAP — but not a doctor-prescribed hearing aid — out in the cold.

Not surprisingly, Warren’s proposal is generating a tsunami of opposition from seniors, conservative lawmakers, and consumer groups, an indication that the  legislation — currently being considered in subcommittee and scheduled to be marked up this Thursday before going to the floor for a vote as soon as next week — is anything but designed to reduce the hassles and expenses imposed by Washington.

Twenty conservative opponents undersigned an open letter to Health, Education, Labor and Pensions Committee Chair Lamar Alexander (R-TN) stating that Warren “… wants to subject PSAPs to FDA regulation and explicitly lock states out of any role in the process and then designates these PSAPs as (being) ‘available over the counter,’ as if that were some big, new innovation — conveniently failing to mention that they are already available to anyone at thousands of stores.”

Just like low-cost reading glasses.

So, why?

As usual, because there’s money — and control — on the table.

The control part is obvious. Warren’s legislation would increase the authority of the FDA regulatory apparat and government busybodies generally. What was a simple go-to-the-store (or go online) and buy what you want thing would become a government-monitored and heavily regulated thing.

It’s worth noting that Warren is a huge backer of “single-payer” — that is 100 percent government-controlled — health care, with federal bureaucrats deciding how much care you’ll get, how you’ll get it, and — of course — how much you’ll pay for it.

At a recent rally in Boston with Vermont socialist Sen. Bernie Sanders, she announced that single-payer “sure ought to be at the top of the list” (see here). She has been a fervent pusher of Obamacare, which despite all the promises made, has raised costs for most people and increased the bureaucratic hassle of getting insurance as well as care.

But the worst part of Warren’s “plan” is the crony capitalist part.

Some manufacturers of hearing assist devices actually want them to be regulated because it will give them the opportunity to charge more for them — in part because the federal government will have effectively outlawed the low-cost alternatives via regulatory fiat.

It’s analogous to the way federal “safety” mandates that require a car company to destroy a dozen or more new cars in crash tests to certify they meet arbitrary government bumper-impact standards make it economically difficult for small, start-up car companies to even try to compete with the established major car companies. A small, start-up company simply can’t afford to destroy a dozen new cars just to “certify” them to Uncle’s satisfaction.

Under Warren’s “plan,” the FDA would redefine what a PSAP is, imposing new standards on labeling and audio output, among other things. Those devices that do not meet the standard would become illegal to sell.

Reportedly, Apple, Bose, Samsung and Panasonic already have “Warren-compliant” devices in the pipeline. These and other tech companies are actively pushing the Warren legislation, which they see as a way to pad their profits.

It makes sense — because it will.

Can you think of anything the government regulates that doesn’t become more rather than less expensive? What will happen to the cost of PSAPs, when the Feds get involved? There is the very real possibility that the FDA will ultimately decide to regulate all hearing assist devices as “hearing aids” — perhaps even imposing a requirement that a doctor’s prescription is necessary prior to any purchase.

Meanwhile, you can buy a pair of reading glasses for less than $10 at almost any drug store or supermarket. Imagine what a pair of reading glasses would cost if they had to be government-approved; imagine what they would cost if you had to get a doctor’s nod before you could even try a pair on.

Not everyone can afford a doctor-approved hearing aid, and PSAPs provide them with an affordable alternative without affecting medically prescribed hearing aids.

It’s the same kind of “help” as telling a drowning man that he may only use a government-approved flotation device, even when a perfectly serviceable life jacket could be thrown to him.

Tuesday, May 16, 2017

Walter Williams: Environmentalists Are Dead Wrong

Walter E. Williams is a professor of economics at George Mason University.  Here is WW's column.

Environmentalists often throw statistics around that suggest catastrophe.  However, even a cursory statistical analysis of their forecast accuracy suggests otherwise.  WW is on target.
Each year, Earth Day is accompanied by predictions of doom. Let’s take a look at past predictions to determine just how much confidence we can have in today’s environmentalists’ predictions.

In 1970, when Earth Day was conceived, the late George Wald, a Nobel laureate biology professor at Harvard University, predicted, “Civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind.” Also in 1970, Paul Ehrlich, a Stanford University biologist and best-selling author of “The Population Bomb,” declared that the world’s population would soon outstrip food supplies. In an article for The Progressive, he predicted, “The death rate will increase until at least 100-200 million people per year will be starving to death during the next ten years.” He gave this warning in 1969 to Britain’s Institute of Biology: “If I were a gambler, I would take even money that England will not exist in the year 2000.” On the first Earth Day, Ehrlich warned, “In 10 years, all important animal life in the sea will be extinct.” Despite such predictions, Ehrlich has won no fewer than 16 awards, including the 1990 Crafoord Prize, the Royal Swedish Academy of Sciences’ highest award.

In International Wildlife (July 1975), Nigel Calder warned, “The threat of a new ice age must now stand alongside nuclear war as a likely source of wholesale death and misery for mankind.” In Science News (1975), C.C. Wallen of the World Meteorological Organization is reported as saying, “The cooling since 1940 has been large enough and consistent enough that it will not soon be reversed.”

In 2000, climate researcher David Viner told The Independent, a British newspaper, that within “a few years,” snowfall would become “a very rare and exciting event” in Britain. “Children just aren’t going to know what snow is,” he said. “Snowfalls are now just a thing of the past.” In the following years, the U.K. saw some of its largest snowfalls and lowest temperatures since records started being kept in 1914.

In 1970, ecologist Kenneth Watt told a Swarthmore College audience: “The world has been chilling sharply for about 20 years. If present trends continue, the world will be about 4 degrees colder for the global mean temperature in 1990 but 11 degrees colder in the year 2000. This is about twice what it would take to put us into an ice age.”

Also in 1970, Sen. Gaylord Nelson wrote in Look magazine: “Dr. S. Dillon Ripley, secretary of the Smithsonian (Institution), believes that in 25 years, somewhere between 75 and 80 percent of all the species of living animals will be extinct.”

Scientist Harrison Brown published a chart in Scientific American that year estimating that mankind would run out of copper shortly after 2000. Lead, zinc, tin, gold and silver were to disappear before 1990.

Erroneous predictions didn’t start with Earth Day. In 1939, the U.S. Department of the Interior said American oil supplies would last for only another 13 years. In 1949, the secretary of the interior said the end of U.S. oil supplies was in sight. Having learned nothing from its earlier erroneous claims, in 1974 the U.S. Geological Survey said that the U.S. had only a 10-year supply of natural gas. The fact of the matter, according to the U.S. Energy Information Administration, is that as of 2014, we had 2.47 quadrillion cubic feet of natural gas, which should last about a century.

Hoodwinking Americans is part of the environmentalist agenda. Environmental activist Stephen Schneider told Discover magazine in 1989: “We have to offer up scary scenarios, make simplified, dramatic statements, and make little mention of any doubts we might have. … Each of us has to decide what the right balance is between being effective and being honest.” In 1988, then-Sen. Timothy Wirth, D-Colo., said: “We’ve got to … try to ride the global warming issue. Even if the theory of global warming is wrong … we will be doing the right thing anyway in terms of economic policy and environmental policy.”

Americans have paid a steep price for buying into environmental deception and lies.

Monday, May 15, 2017

The Effect of a Corporation Tax

Richard Teather at

This article provides perspective on why the CBO's estimates of economic impact are not likely to be correct.  Once again,  you cannot trust what you hear from the CBO, talking heads, media, and politicians.
The Labour party has proposed increasing corporation tax to 26%, from its current rate of 19%, and in contrast to the government’s proposed reduction to 17%.

That would leave the UK with a tax rate one and a half times the level the government is proposing, putting us around the middle of European corporate tax rates rather than near the bottom (although still the lowest in the G7).

Labour claims that this will raise around £20 billion to fund various spending commitments.
On a simple mathematical basis, that looks about right.  The Treasury estimates that a 1% increase in the corporation tax rate would raise about £2.3 billion.  Multiply that by Labour’s proposed 9% increase and allow for inflation until 2021 when they propose to implement it, and £20 billion looks reasonable.

The problem is that the economy and business do not remain static while politicians fiddle with the tax rates.  People and companies react to changes; and the bigger the change is, the more they react.

A 9% increase in tax rates therefore is highly unlikely to raise nine times as much as a 1% increase.

Higher rates, lower revenues

One thing that is increasingly well evidenced is that higher tax rates generally result in lower than expected revenues.

This is not just shown by the outcomes of previous tax changes, but is also what we would expect from people reacting to tax changes.  When tax rates are increased, the return on investment is reduced, so there will be less investment and therefore less growth.  If investors and entrepreneurs will see less of the rewards, there will be fewer new businesses started up, less investment in expanding existing businesses, and fewer international businesses deciding to locate in the UK.

The effect of this is difficult to quantify, but to get an idea we can look at the time when corporation tax was last at the 26% proposed by Labour.  That was in 2011/12, and the tax at that level raised around £41 billion[1].  Add on inflation and that would be around £44.5 billion today.  However in fact, with the rate cut to 20%[2], the tax revenues have now soared to almost £50 billion a year.[3]

Although the rate is now significantly lower than it was in 2011, the corporation tax collected is actually higher because the lower tax rates have encouraged companies to set up or expand, or to set up operations in the UK.

If that trend continues, the government’s proposed 17% might raise around £52.5 billion, £8 billion more than it raised when rates were last at Labour’s proposed 26% (all figures at today’s prices).

Assuming that trend works the same in reverse, the proposed rate increase to 26% would be expected to reduce corporation tax revenues by £8 billion, not increase them by £20 billion, as the UK becomes a less attractive place for business investment.

Who bears the pain of corporation tax?

This is not just an abstract matter of changes in an index of GDP.  Nor is it merely a question of whether investors see the value of their investments fall.  The effect will be real and wide-ranging, because any reduction in investment means fewer jobs, and less well-paid jobs, as companies reduce investment and try to cut costs in response to higher taxes.

The Institute for Fiscal Studies responded to Labour’s proposal by saying that “taxes are paid by people” and so corporations do not actually pay tax.  They have been criticised for that by supporters of higher taxes, with one saying the IFS is “so obviously factually wrong … companies are separate legal persons … only they can pay the corporation tax a company owes”.  However that criticism confuses the practicalities of “paying”, transferring money to the tax authority, with an economic concept of payment in the sense of bearing the burden of the tax.

The truth behind the IFS claim is that people, rather than companies, suffer the burden of corporation tax.  Either the company has less wealth (so the shareholder bears the burden), or the company increases its prices to keep its after-tax income the same (so the consumer suffers), or wages are reduced, staff are laid off and new staff are not hired, to cut costs and maintain the same after-tax income (so the workforce bears the pain).

In practice there is a combination of the three.  However, in an open, free economy, there is usually not much scope to increase prices (the business would become uncompetitive), and if shareholders see too much of a cut in their returns then they will invest elsewhere.  That means that the main pain of increasing the corporation tax rate falls on the workforce, as the company seeks to cut costs to maintain its after-tax profits.

And not just the company’s employees that lose out; some of the main losers are young people trying to find their first jobs, only to discover that few companies are hiring because they have cut back on their expansion plans in the face of higher taxes.

Pretty much all economists are agreed on this; the only question is how much of the burden of a corporation tax rise falls on workers rather than shareholders or customers.  However a major study by Oxford University’s Centre for Business Tax[4] concluded that a rise of £100 in corporation tax would reduce wages by £75, through a combination of lower wages and fewer jobs.  Some studies have found even higher tax burdens on the workforce, others lower, but the Oxford study is one of the largest.

If 75% of the burden of increasing the tax rate falls on the workforce, that means that Labour’s proposed £20 billion a year from extra corporation tax receipts would reduce wages by £15 billion a year.

With average private sector wages of just under £26,500[5], that cut in companies’ salary bills is equivalent to over 565,000 jobs.

Knock-on tax losses

If wages are reduced by £15 billion as companies react to higher corporation tax rates, that will also reduce the government’s income tax and national insurance receipts.

On that average private sector wage of £26,500, the government would expect to take around £7,720 through income tax and National Insurance.  That means the lost wages of £15 billion could see a fall of £4.4 billion in the Treasury’s revenue from employment taxes.

Double whammy

Would the fall in wages happen as well as the fall in corporation tax receipts?   Yes, it could, because they are two results of the same process.

As tax rates are increased and companies invest less, because the after-tax rewards are lower, two things happen; company profits are lower, so there is less to tax, and also there are fewer jobs and those that remain are less well paid.

The effect then is potentially disastrous for the Treasury; lower company profits to tax and less employment taxation.  Plus of course the additional welfare costs; benefits for those who are unemployed because of the reduced investment, and in some cases higher tax credits for those who are still in work but on a lower income.

With a potential loss in corporation tax receipts of £8 billion and lost employment taxes of £4.4 billion, the government could be looking at a potential loss of over £12 billion of tax revenues, if this policy were implemented, not to mention the huge financial, social and personal cost of a possible 565,000 people losing (or failing to find) jobs.

The fact is that, although very important to the company, profits are a tiny part of what companies do; far more important are the goods and services that they provide and the employment opportunities they create.  Over-taxing those profits, which may only be a few percent of turnover, risks losing all the other advantages.

Although taxing companies looks like a painless way for the government to raise money, it is far from that; the pain of lost taxes and lost opportunities can be large and widespread.

[1] That figure is based on HMRC data for tax revenues in the later part of 2011/12 and the early part of 2012/13, because corporation tax is mostly paid in the following year.

[2] It is now reduced further to 19%, but because of the timing of when corporation tax is due, the first tax payments under the 19% rate will not be due until the end of 2017.

[3] Source: HM Revenue & Customs – receipts.

[4]The Direct Incidence of Corporate Income Tax on Wages”, Arulampalam, Devereux & Maffini, Oxford, 2009.

[5] National Statistics, “EARN02 – average weekly earnings by sector”, January 2017 (latest finalised data

Saturday, May 13, 2017


The following discussion is couched in terms of products and a single consumer utility function for each country.  Consequently, it does not address investments directly or the problem of aggregating individuals’ utility functions.  Nevertheless, the discussion provides useful insight that puts the pronouncements of most of the talking heads, media and politicians in perspective.

Advocates of free trade rightfully point out that it can lead to producing more of everything versus no trade, hence can make everyone better off.  What they gloss over or ignore is that actual trade is not the free trade presumed in their analysis and that not everyone ends up better off.

Consider two countries, A and B, that each can produce several products.  Each country has a production possibility frontier (PPF) that represents the maximum possible output combinations of the products, i.e., where increased output of one product necessitates decreased output of one or more other products.  Equivalently, one person cannot be made better off unless another is made worse off.  This is called a Pareto optimum.  Each country’s PPF represents a Pareto optimum for itself.

If a country’s production combination plots inside its PPF, then production of one or more of products can be increased without decreasing production of any other product.  This implies that everyone can be made better off.  Therefore, maximum wellbeing requires that each country’s production schedule be on its PPF.

The PPF’s slope with respect to pairs of products is the ratio of how much more of one product can be produced per unit of the other product foregone.  It is called the marginal rate of transformation (MRT).

The discussion below presumes the following, unless otherwise stated.

·         Perfect competition, i.e., marginal revenue equal to price, no frictions due to government regulations, import or export taxes, subsidies, vampires etc.
·         Business decisions based on marginal analysis.
·         Marginal cost curves that slope upward.
·         A PPF that is convex outward for all countries (all MRTs are negative and decreasing, i.e., more and more of one product’s production must be given up to produce an additional unit of another product.)

In the absence of trade, the optimum point on a country’s PPF is determined by its PPF’s shape and its citizens’ product preferences.  At the optimum point, any increased production of one product produces a positive marginal utility (increased satisfaction) that is exactly offset by the negative marginal utility due to the necessary decreased production of other products.  This is true for each country.

Typically, the PPFs of different countries have different shapes and/or its citizens have different preferences.  If so, then, without trade, it is likely that each country’s production point on its PPF has MRTs for at least some pairs of products that differ from other countries’ MRTs for the same pairs of products. In this case, each country is said to have a comparative advantage for one or more products.  For such product pairs, trade makes possible increasing the aggregate production of one or both products without decreasing the production of other products.  This implies that trade makes it possible to produce more of everything and can make everyone better off if any country has a comparative advantage with respect to another.  Although each country may be at a Pareto optimum separately without trade, the countries cannot be at a Pareto optimum in aggregate without trade.

Thursday, May 11, 2017

The Effects of a Minimum Wage Increase

Some "so-called" experts quoted by the media and politicians claim that a minimum wage increase will not reduce employment.  The following article from

explains, in layman's terms, why you should doubt such a conclusion.
 Most of us who took Econ 101 would expect that an increase in the minimum wage would increase unemployment, at least among low-skilled and younger workers. After all, demand curves slope downards so that an increase in price of labor should result in a decrease in demand for that labor.

Supporters of the minimum wage, however, argue that employers have monopsony power when hiring low-skill workers. What they mean by this is that due to a bargaining power imbalance, employers can hire workers for less than they would be willing to pay in a truly competitive market. As the theory goes, this in turn creates an additional consumer surplus for employers, which manifests itself as higher profits. A minimum wage increase would thus reduce this surplus but not effect employment because companies before the new minimum wage were paying less than they were willing to pay. Thus minimum wage supporters argue that higher wages mandated by minimum wage laws will be paid out of these excess profits, and not result in higher prices or less employment.

My understanding (and I am not an economist) is that the evidence for monopsony power in hiring low-skill workers is weak or at best limited to niche circumstances. However, I am going to argue that it does not matter. Even if companies are able to pay workers less than they might via such monopsony power, whatever gains they reap from workers ends up in consumer hands. As a result, minimum wage increases still must result either in employment reductions or consumer price increases or more likely both.

Sunday, May 07, 2017

The "Right" to Health Care

Kevin Williamson in the National Review.

KW is on target.
There isn't one.

With the American Health Care Act dominating the week’s news, one conversation has been unavoidable: Someone — someone who pays attention to public policy — will suggest that we pursue policy x, y, or z, and someone else — someone who pays a little less careful attention, who probably watches a lot of cable-television entertainment masquerading as news — responds: “The first thing we have to do is acknowledge that health care is a human right!” What follows is a moment during which the second speaker visibly luxuriates in his display of empathy and virtue, which is, of course, the point of the exercise. It’s kind of gross, but that’s where we are, politically, as a country.

Here is a thought experiment: You have four children and three apples. You would like for everyone to have his own apple. You go to Congress, and you successfully persuade the House and the Senate to endorse a joint resolution declaring that everyone has a right to an apple of his own. A ticker-tape parade is held in your honor, and you share your story with Oprah, after which you are invited to address the United Nations, which passes the International Convention on the Rights of These Four Kids in Particular to an Individual Apple Each. You are visited by the souls of Mohandas Gandhi and Mother Teresa, who beam down approvingly from a joint Hindu-Catholic cloud in Heaven.

Question: How many apples do you have? You have three apples, dummy. Three. You have four children. Each of those children has a congressionally endorsed, U.N.-approved, saint-ratified right to an apple of his own. But here’s the thing: You have three apples and four children. Nothing has changed.

Declaring a right in a scarce good is meaningless. It is a rhetorical gesture without any application to the events and conundrums of the real world. If the Dalai Lama were to lead 10,000 bodhisattvas in meditation, and the subject of that meditation was the human right to health care, it would do less good for the cause of actually providing people with health care than the lowliest temp at Merck does before his second cup of coffee on any given Tuesday morning.

Health care is physical, not metaphysical. It consists of goods, such as penicillin and heart stents, and services, such as oncological attention and radiological expertise. Even if we entirely eliminated money from the equation, conscripting doctors into service and nationalizing the pharmaceutical factories, the basic economic question would remain.

We tend to retreat into cheap moralizing when the economic realities become uncomfortable for us. No matter the health-care model you choose — British-style public monopoly, Swiss-style subsidized insurance, pure market capitalism — you end up with rationing: Markets ration through prices, bureaucracies ration through politics. Price rationing is pretty straightforward: Think of Jesse James and his “Pay Up, Sucker!” tattoo on his palm. Political rationing is a little different: Sometimes it happens through waiting lists and the like, and sometimes it is just a question of money and clout. American progressives love the Western European medical model, but when Italian prime minister Silvio Berlusconi needed a pacemaker, he came to the United States to have it implanted.

Rich people always get better stuff. That’s what it means to be rich. And money is only one resource: Political connections matter enormously in some places, as might a good family name or employment in a powerful firm. If you live in one of the poorer corners of the world, you may have “free” health care, meaning that if you should become infected with HIV, you will get a free aspirin. On the other hand, the Coca-Cola Company distributes antiretroviral drugs, free of charge, to employees around the world being treated for HIV.

That may seem unfair to us. That may be unfair. It may be unfair that you have four kids and three apples. After we are done lamenting the unfairness of it all, what do we do?

Ideally, we’d plant some apple trees. We would find ways to invest in medical care with an eye toward making it more effective and less expensive. There is no substitute for abundance. And the great enemy of abundance is the bias against profit. There is something deeply rooted in us that instinctively thinks we are being abused if someone else makes a profit on a deal. That is a dumb and primitive way of thinking — our world is full of wonders because it is profitable to invent them, build them, and sell them — but the angel is forever handcuffed to the ape.

Ten years ago, I was in the office of a very fancy doctor who was always very pleased to see me, because I paid him out of pocket — my insurance card said “American Express” on it. If you can do this, I recommend it. The medical experience is very different when there is cash on the barrelhead: Appointments are kept, prices are known and negotiated beforehand, telephone calls are answered. Markets work, if you let them. My doctor had a picture on his wall in which he was posing with a Ferrari — one of his Ferraris. I was driving a Saturn VUE at the time. This seemed wrong in some way.

“I think I am paying you too much,” I said.

He took a pensive moment, and responded: “Do you really want a doctor who can’t afford a Ferrari?”

Citizens carrying guns can save lives

See the following links from John Lott's Crime Prevention Research Center.

Check out this book

The End of Doom by Ronald Bailey.

Saturday, May 06, 2017

Marc Degirolami: Fake Law

Here is Marc Degirolami's column in the Weekly Standard.

Marc O. DeGirolami is a law professor at St. John's University and author of The Tragedy of Religious Freedom.

MD is on target, except where he says "Trump, too, is responsible".  There is no excuse for judges to judge based on their personal agendas.
Something ugly is happening to the First Amendment. It is being contorted to enable judges to protest Donald Trump's presidency. The perennial impulse of judges to manipulate the law to achieve morally and politically desirable ends has only been exacerbated by the felt necessity to "resist" Trump. The result: Legal tests concerning the freedoms of speech and religion that in some cases were already highly dubious are being further deformed and twisted.

Welcome to the rise of fake law. Just as fake news spreads ideologically motivated misinformation with a newsy veneer, fake law brings us judicial posturing, virtue signaling, and opinionating masquerading as jurisprudence. And just as fake news augurs the end of authoritative reporting, fake law portends the diminution of law's legitimacy and the warping of judges' self-understanding of their constitutional role.

Those who try to police the relentlessly transformational projects of constitutional progressives had much to dread from the Obama administration, an inveterate ally of the legal left that did what it could to graft the aspirations of progressives onto the Constitution. But Trump's presidency may be even worse, because too many judges now feel called to "resist" Trump and all his works—no matter the cost to the law's authority and to the integrity of the judicial role.

In one recent deformation, Trump was sued for incitement to riot and assault and battery when, at a campaign rally before he became president, he said "Get 'em out of here" in response to protesters in the audience. Several of these protesters were subsequently pushed and struck by others in the crowd. A Kentucky federal district judge ruled that the case against Trump could proceed because "Get 'em out of here" could reasonably be interpreted as an exhortation to attack the protesters.

The most astonishing part is the court's conclusion that the statement is not protected by the speech clause of the First Amendment because it is plausible to think Trump was inciting a riot. Though the court cites the highly speech-protective test from Brandenburg v. Ohio, in which the Supreme Court held that the freedom of speech does not permit the government "to forbid or proscribe advocacy of the use of force or of law violation except where such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or produce such action," it mangles it. What part of "Get 'em out of here" could plausibly be interpreted as advocating illegal activity, rather than a call for the assistance of security officers? Where is the explicit advocacy of illegality?

Brandenburg involved a KKK member advocating on film the possibility of "revengeance" against African Americans and Jews, along with other hateful speech. In an earlier case, Terminiello v. City of Chicago, a rabble-rousing priest whipped up an angry throng to confront an enraged mob, shouting: "[T]here will be violence. . . . We will not be tolerant of that mob out there. . . . We are going to stand up and dare them to smear us. . . . We don't want them here; we want them to go back to where they came from." In both cases, the Supreme Court held that these words were constitutionally protected free speech. Neither what Trump said nor the context of his speech is even in the same universe.

And yet this district court found a way to rule that the president of the United States might be deposed on the question of incitement to criminal violence because Trump had on some other occasions "condoned violence," and because had Trump actually wanted the assistance of security officers to remove the protesters, "Trump would have instructed the intervening audience members to stop what they were doing."

It is not possible to explain this jaw-dropping ruling—one that flies in the face of binding Supreme Court precedent—without reference to extra-legal factors: the desire to embarrass the president, for example, or to create mischief for him, or to signal opposition to him. That Trump had previously "condoned violence" is irrelevant to whether he incited a riot at this rally. It is highly relevant, however, if one's purpose is grandstanding to injure a political opponent.

An even more appalling specimen of fake law has been generated by Trump's executive order restricting entry into the country by nationals of six foreign countries for 90 days and suspending refugee admission for 120 days. In one court order, a Hawaii federal district judge rejected the government's claim that the six nations posed special security threats (on this, the Trump and Obama administrations are aligned) and concluded that the order violated the establishment clause. Relying principally on obscure dicta from Justice David Souter's opinion for the Supreme Court in McCreary County v. ACLU (2005), the court held that the "unique," "remarkable" "historical context" of the order, "full of religious animus, invective, and obvious pretext," tainted it with anti-Muslim bias and therefore evidenced a purpose to make a law respecting an establishment of religion.

The court pointed to campaign statements by Trump that "Islam hates us" and by his "surrogate" (a media term appropriated by the judge) Rudy Giuliani's description of a campaign conversation with Trump about a "Muslim ban" to justify its holding. This executive order was narrower than its predecessor—but somehow that counted against the government. In reaffirming its decision in a preliminary injunction, the court erupted in sanctimonious disgust: "The Court will not crawl into a corner, pull the shutters closed, and pretend it has not seen what it has."

McCreary County was a 5-4 decision in which the Supreme Court concluded that two Kentucky counties' displays of the Ten Commandments in their respective courthouses were unconstitutional because each of three iterations of the displays evinced to a "reasonable observer" the same impermissible, nonsecular purpose—the promotion of Christianity. "Reasonable observers," the Court intoned, "have reasonable memories."

And unreasonable observers have unreasonable ones. Put to one side that the Supreme Court has never yet applied the establishment clause to foreign claims—a fact not even acknowledged by this judge. What makes the Hawaii court ruling so absurd—and such a clear example of fake law—is the district judge's use of campaign statements by people without any lawmaking power when they were made to identify the order's purpose. The Ten Commandments case was at least an attempt to discern government purpose because there was actually a government with a law-making history whose purpose could ostensibly be investigated. What "legislative history" did this judge consult? Campaign rhetoric, and the media spouting of a "surrogate" who has no role at all in the current administration.
A large part of the blame for this abomination falls on the Supreme Court. It was only a matter of time before the hollowness of its favored establishment clause test—which focuses on impure motivations, perceived slights, and the hurt feelings of political exclusion—would be exposed in the patently unreasonable use of irrelevant and illimitable "context." The reasonable observer, it seems, is not the judge who faithfully applies the law but the politically motivated judge who swells the scope of the establishment clause and wears his contempt for the president like a medal.

Trump, too, is responsible. His incompetence, his pugnacity, his reliably ill-advised policies, and his boorishness combine to cause his political adversaries to see all shades of red in whatever he does. Enraged legal academics have manufactured grotesque theories about the emoluments clause, the Electoral College, and the establishment clause just to bring him down.

As more courts succumb to similar Trump-hatred in the exercise of their constitutional duties, the damage to the law's legitimacy and to the institution of the judiciary will only intensify. As with fake news, it is one of the pathologies of fake law that we are likely to forget what real law looks like. Soon enough, we won't even know the difference.

Monday, May 01, 2017

Glass Armonica Videos

One of the most beautiful musical instruments.

Math Rap

My grandson Andre's math assignment was to write a one page math rap.  Here it is.
Functions are easy don’t get queasy.
                        X into Y is ok, X into Y and Y should make you uneasy.
                                    Use the vertical line test to see if its legit.
                                                If it crosses more than once - Oh shit

X into Y and Y and Y and Y and Y and Y is big trouble.
            It may be a smooth curve - it could look like a bubble.
                        A function is a factory that makes Y out of X.
                                    Sort of like parents who make babies from sex.

Function are like people, nasty and nice.
            You better know which is which or you will pay the price.
                        Y=mX+B is the shape of a line,
                                    If it crosses the X axis once or nuance it is fine

Two linear functions often meet at a point called their solution.
            You will understand this if you pay enough tuition.
                        Lines can be perpendicular, with diametrically opposed attitudes
                                    You cannot derive one from the other with platitudes.

Parabolas look like a “U” either right side up or upside down.
            Right side up is called concave up or convex down.
                        Upside down is called concave down or convex up.
                                    If that confuses you - it’s ok if you throw up.

The equation for a basic right side up parabola is Y =X^2.
That’s because larger Xs give larger Ys - I hope you cared.
            So what if the parabola is upside down?
                        Larger Xs give smaller Ys - so it’s Y=-X^2, don’t frown.

Math can be strange and perplexing - ripping your brain asunder.
How many integers are there? I wonder.
Are they countless? That cannot be,
For you can count them with themselves, you see.      

Nonlinear functions can be pretty to look at.
            Pretty nonlinear functions are sometimes a little chubby or fat.
                        Sort of like women, like Mona Lisa

And that is that.