Category: Policy

The Earth is not 10,000 years old

The evolution versus creationism debate has resurfaced over the last few years in the US, primarily as a result of numerous local school boards’ decisions to modify biology curricula to include more creationism-oriented education. Gallup polls conducted in recent years indicate that as many as 45% of all Americans believe in the that God created the Earth and humans within the last 10,000 years. This belief is particularly interesting since the science underpinning the geological age of the Earth is the same science responsible for much of modern technology.

One of America’s foremost strengths is its respect for individual beliefs and belief systems. If 45% of America wants to believe that the world is flat or that babies come from storks, that’s perfectly acceptable. Unfortunately, since technological advancement is founded upon a scientific understanding of the universe, a belief in the soundness of basic science is almost a prerequisite to further study in science and engineering fields.

The principles of radioactive decay that are widely used in geological dating are part of the same physics used to create the atomic bomb and subsequent nuclear devices. Do those who believe the Earth is 10,000 years old refute the existence of nuclear weapons, or deny that 15% of US electrical power comes from nuclear power plants? Perhaps modern medicine is also not of much interest to the young-Earth crowd, as radioactive isotopes and related electromagnetic phenomena are used there as well.

If a plurality of America doesn’t believe in the underpinnings of modern technology, perhaps it’s understandable why the US is falling behind other nations in its education of scientists and engineers. America’s long term position as the center of innovation is further threatened when individual and personal beliefs invade the science classroom. American scientists, engineers, and educators have to do a better job at making clear that without science, modern technology’s comforts cannot be had.

Posted on by praveenghanta 0

I want to be a Farmer

The Census Bureau has reclassified farmers and ranchers as management, with only farm workers officially classified as being in the farming, fishing, or forestry occupations. And according to the USDA, farm households earned 10% more on average than non-farm households. Farming seems like a great business to be in! But if farmers are doing so well, why do we pay them $30 billion per year in subsidies?

Over two hundred dollars in taxes per working American were paid to American farmers last year. On top of that, we protect our farmers from foreign competition in many markets, leaving the American consumer to pay double or triple world prices for commodities like sugar. Meanwhile, the average wheat farm receives twenty grand a year in direct cash payments.

It seems that we American taxpayers have been forking over extra grocery money so that farm management can earn above-average incomes! Proponents claim that American farmers are the most competitive in the world; why not let them compete, saving us on taxes and at the grocery store to boot? Reducing farm subsidies will end a cherished way of life, subsidy-supporters respond. If farming is so cherished as a traditional American way of life, then why does the Census report that only 0.7% of the population is involved in it? Most farm workers are Hispanic immigrants – so exactly what kind of “traditional farming” do farm subsidies mean to protect?

In international negotiations, the Bush administration, like others before it, has always tied reduction in our subsidies to reduction in other nations’ subsidies. Even absent EU cooperation, the US should move forward to slash subsidies and open agriculture markets. Altruistic motives notwithstanding, we should do this simply to save our taxpayers and consumers money.

If America were able to cut subsidies and open agricultural markets, it might just find another problem going away: illegal immigrants wouldn’t want so desperately to come to the US if they could sell us their produce from their home countries.

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Another Immigration Post

I just saw a presentation by George Borjas, a Harvard economist specializing in immigration issues. His research seems to support the common-sense opinion on the effects of large-scale illegal immigration: it has some positive economic benefits, but it also redistributes wealth somewhat from poorer Americans to richer Americans. Since illegal immigrants compete for jobs mainly at the bottom of the economic scale, their arrival tends to increase the wealth of those who use labor (business owners and the upper-middle class), while decreasing the wages of unskilled Americans.

This is perhaps not very surprising, and refines my previous article’s view as to why illegal immigration has continued for so long: it has some benefits, and those benefits accrue primarily to middle and upper class Americans, who tend to vote at a higher rate than the poor. Only recently has the cultural backlash against Latinization reached a level necessary to unbalance the old equation and force immigration reform.

Though most of Lou Dobbs’ rhetoric is of little value, he is right on this: America cannot begin to have a rational immigration policy until it can control who immigrates.

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Gas Prices – and what ever happened to the gas guzzler tax?

Americans have been complaining about gas prices lately; recent polls have shown that high gas prices are their number one economic concern. Of course, high gas prices are driven by high oil prices, which are in turn driven by supply, demand, and a healthy premium to account for terrorism, hurricanes, and other delights. Demand has grown faster than supply lately, shrinking surplus capacity to a minimum. Many point outside our shores to emerging economies as the source of this growth. But no one likes to look inward, right?

Since the late 80’s, fuel economy in American consumer vehicles has decreased, while vehicle weight and performance have increased (the EIA has the details). Since American vehicles consume 20% of the world’s oil, our driving habits have a huge effect on oil prices. Since everyone seemed to want an SUV until recently, the increased demand eventually impacted gas prices. Another way to look at this: if average fuel economy got back to what we achieved in 1987, we would consume 2 million less barrels of oil per day, driving oil prices down significantly, and cutting our import requirements by 20%.

The federal government instituted a tax on inefficient vehicles – the “gas guzzler” tax – back in 1978. So why hasn’t it had any effect on the demand for inefficient vehicles? The gas guzzler tax doesn’t apply to trucks of any kind, so it doesn’t apply to SUVs and trucks even though they account for 54% of all US vehicle sales today! If you buy a Lamborghini, expect to pay up to $8000 in gas guzzler taxes; if you buy an 8000 pound Excursion, laugh at the other guy on your way out!

Extending the gas guzzler tax to apply equally across all vehicles would seem a logical start to encouraging conservation and decreasing oil dependency. Then again, I’m not aware of any lobbyists who get a paycheck for that, while I expect the auto industry has its forces lining up against this already…

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Fixing Social Security

Two words: Social Security. Together they’ve come to represent a massive defined-benefit pension system in which all working Americans must participate. The system worked well for decades, when life expectancies were lower and a smaller percentage of the population was in retirement. Now, even though a full 12.4% of most workers’ gross salary is devoted to Social Security, the system may run bankrupt before young Americans today retire. Some Republicans are proposing to privatize the system, while Democrats are fiercely fighting change. Why not start with a simpler question: why does Social Security even exist?

Social Security was originally intended as a way to guarantee that the elderly would not fall into poverty after leaving the work force. It has now become the primary, and in many cases, only savings program in which most Americans participate. But why force Americans to save? This is perhaps the most socialist part of the American economy, wherein every working American must set aside one-eighth of their pay for retirement. Rather than forcing Americans to save, why not return Social Security to its original purpose of providing benefits to the impoverished elderly?

By reducing the scope of Social Security benefits so that they cover only the elderly poor, the program will again provide a safety net for the elderly, and not a forced savings program. The resulting program shrinkage can be used to both cut taxes and make the program solvent over the long term.

In practice, this kind of change could be implemented through significant means-testing of Social Security benefits. The change could phased in so that it affects only young workers, while preserving benefits for those who have paid higher rates for decades. By modifying Social Security from a savings program into a safety net, we can both cut taxes and provide for the less fortunate among the elderly. Who doesn’t want that?

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Post 9/11 – Are we any safer?

Yes, we are safer in that our sense of vigilance in the US has been heightened, both within the government and within the population as a whole. But in terms of broader American policy since 9/11, has it made us any safer?

We’ve successfully conquered unfriendly regimes in both Afghanistan and Iraq. Numerous unfriendly regimes remain, however, and the population of almost every Muslim nation (and many non-Muslim nations) became vehemently anti-American after the Iraq war. If the US were to conquer Iran and Syria, effectively controlling the entire Middle East, we might gain security against these enemy states. Ah, but enemy states did not attack on 9/11 – stateless terrorists attacked on 9/11. These sorts of terrorists would have thousands of hiding places remaining, and we can never conquer and hold all of them.

Better intelligence and policework have led to the capture of more terrorists than our invasions; it’s time to redirect investment in that direction. At the end of the day, the US will have to come to terms with the world’s 1.5 billion Muslims. We’re spending 10 billion per month and losing a couple of soldiers per day to control one small nation of 25 million – this strategy cannot work on a wider scale. It’s time to invest in intelligence gathering, domestic security, and arms control. These are the realistic anti-terror strategies for the long run.

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On True Costs – and airline security

First, welcome to my blog. I hope to take my incessant ramblings on politics, economics, and societal issues and crystallize some of those thoughts into coherent entries here; if my entries aren’t well written, I hope that they are at least thought provoking!

So, what is the concept of “True Cost”? If we had the power to know the true cost and benefit of each action we intend to take, surely decision-making would become a trivial process. In reality, people cannot predict the future, and they often disagree agree on the cost or benefit of a particular outcome. Still, this form of analysis has its place in policy-making, as it enables us to rationally approach topics that too often are debated in purely emotional terms.

Take, for example, the current security measures implemented in the airline industry. While fears of terrorism are well-founded, given events of recent history, at what point will the cost of extra security, delays, and trashed cosmetics outweigh the perceived benefit of increased security? No real terrorist has ever been caught by airport screeners (which is not to say it will never happen); but is this really the most effective way to effect airline safety?

More broadly, more Americans died from slips and falls (according to the CDC) during 2001 than from terrorism. Should we then live in fear of ladders and slick floors? Thinking individuals can work to balance security and risk in airline security – but they can do so only by weighing the cost and benefits, and not by reacting irrationally in the face of a new threat.

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