American Elephants


Confused by the Budget Control Act? Here’s Help! by The Elephant's Child

The Budget Control Act is a big victory for…? Who?  Depends on who you listen to. Republicans are troubled because the budget cuts are not big enough. Democrats are beside themselves. If you are confused, welcome to the club.  Keith Hennessey, who was senior economic adviser to George W. Bush, and is now teaching at Stanford has 3 brief analysis posts on the Budget Control Act. He’s a good explainer.

1. A Quick Summary of the Budget Control Act

2. Understanding the Budget Control Act

3.  Strategic Analysis of the Budget Control Act

— Democrats are deeply attached to Keynesian economics. They see the problems of the economy as a lack of demand by consumers, and the remedy is spending more money to put into the hands of consumers to revive demand.  They believe it worked for FDR, and consequently is the right remedy for this, the greatest crisis since the Great Recession.

The evidence casts doubt on their convictions, but evidence cited by Republicans is dismissed as false, evil, letters from Satan and so forth.They want more revenue, which means higher taxes.  Remember when Nancy Pelosi said that you revived the economy by giving the unemployed more unemployment benefits?  She thought that would increase demand.

— Republicans see that when business is sitting on their money and not hiring, the solution is to ease the burden on business. We have one of the highest corporate taxes in the world.  The effective tax rate on new investment is 34.6%, the highest rate in the OECD, and 5th highest among 33 countries.  Average OECD rate is 18.6%.

Regulation has vastly increased.  Uncertainty has increased as well with ObamaCare, EPA regulation and energy costs. Relieving business of some business taxes and a lot of  uncertainty by removing regulation and repealing ObamaCare would see the economy recover.  Evidence from the Coolidge administration, Kennedy administration, Reagan administration and the George W. Bush administration prove that it works. Raising tax rates particularly on the rich doesn’t necessarily bring in more revenue. The rich have many ways to avoid paying taxes if they choose.

Sorry, Senator Durbin.  Keynesian economics has been dead for a long, long time. You can’t keep digging up the corpse.



The Fight Over Forests, Owls, and Myths of Nature by The Elephant's Child

                                                                                                photo by Gary Braasch

This cute little fellow is a female Northern Spotted Owl. She’s around 16 ” long, and in trouble.  And she has been trouble as well. Back in the 1980s, before the owl was listed as a threatened species, nearly 200 sawmills were found in the forests of Oregon, and as many in Washington. The Oregon mills were churning out eight billion board feet of federal timber every year. Today, there are less than 80 mills operating. Mills dependent on federal timber have closed, the rural communities which depended on the mills have declined and unemployment in many Oregon counties exceeds 20%—double the national average.

First they said that spotted owls could only nest in old-growth forest, and there were special efforts to see that old-growth was not logged. Then it was discovered that they lived in young forest as well.  Despite a 90% cutback on harvesting on federal lands, the population of spotted owls continues to decline. Was the whole law a fraud?

In 2002, the Biscuit Fire in southern Oregon and northern California burned 500,000 acres, cost $150 million to fight, and destroyed $5 billion worth of timber.  It also killed an estimated 75 pairs of spotted owls. Unmanaged forests have become immense fire traps as the recent fire in Arizona and New Mexico demonstrated.

Washington State listed the owl as endangered in 1988, and began working on a recovery plan. The same year, Oregon Wildlife Commission reaffirmed the owl as threatened and considered protecting it on private lands under the state’s Forest Practices Act. What is the trade-off between owls and people?

The final Revised Recovery Plan, issued on June 30, 2011, calls for expanding protections for owls beyond the nearly six million acres currently set aside.  It also calls for the “removal” — shooting— of hundreds of barred owls. The barred owls are a larger and more adaptable rival of the spotted owl that competes for nesting sites and prey, and sometimes breeds with the spotted owl. There’s no doubt that barred owls are having a negative effect on the spotted owl, but is it  competition or is it just a complication?

We don’t know much about endangered species. The Endangered Species Act has saved remarkably few species. Many species have gone extinct. Many extinct species turned out not to have been extinct after all.  It is extremely hard to count birds or animals in the wild. Should we allow nature to take its course? Assuming that the northern spotted owl  can be saved, how much cost is too much?  Do the preservationists have the right to tell property owners of private land what they may or may not do? There are enormous complications, many myths, and an uncertain way forward.

Environmentalists have a tendency to find an “endangered” species wherever there is a project of which they disapprove.  In California they declared the Delta smelt an endangered species and devastated California’s vast Central Valley, one of the great breadbaskets of the nation. The water for millions of acres of farmland was cut off, and crops and orchards died.  Was the Delta smelt really endangered?  Who knows? Was it worth the devastation to the Central Valley? Probably not.

How much will it cost to protect the northern spotted owl?  The Fish and Wildlife Service says the species could be rejuvenated over the next 30 years at a cost of about $127 million, but all that money will do nothing to help the depressed communities where still more timber will be off limits to harvesting. But the costs go far beyond that. The lumber for building has increased horrendously in cost, and plays no small part in the increased price of houses. We have learned how to use every part of a tree, so we are getting more value out of a tree than we ever did before.

People love the woods,  and want to keep them just the way they are, beautiful, pristine and wild.  But forests are a crop. Their growth cycle is just many years longer than other crops.  Trees start as seedlings, grow up, get old and die. Unmanaged forests burn, trees grow too thickly and need to be thinned. Environmentalists are often ideologues who are more interested in their political ideology than in the health of the natural world. Oddly enough, the increased carbon dioxide that environmentalists fear so, is a natural fertilizer for plants — including forests.

The Endangered Species Act is bad law.  Means well, but ventures heavy footed with giant steps into the woods. Private property owners have been known to cut down all their trees to prevent the possibility of having an endangered species on their land to destroy their use of their own land.  We have no accurate accounting of the costs of endless delays, lawsuits, and cancelled projects. Some are simply because environmentalists don’t like fossil fuels, but a desert tortoise is holding up a solar energy project in the California desert.

On the other hand there are wildlife biologists desperately trying to save species. What would we do with the Neanderthals today?

  • This article from the Smithsonian takes on the battle to save the spotted owl from the point of view of the environmentalists and those invested in the idea of global warming.
  • Professor Alston Chase’s 1995 book In a Dark Wood is a fascinating story of the battle over the spotted owl and old growth forests, assumptions about the environment and the lives of all who have been caught up in the battle. I recommend it highly.
  • Rebuilding the Ark is a new volume of essays examining the Endangered Species Act and how to reform the Act by a number of environmental law experts who evaluate its successes and failures.


Plant a Garden, Go Directly to Jail for 93 Days? by The Elephant's Child

You didn’t pay any attention to the post below about overcriminalization, did you? Sure that you can’t be breaking any laws?  Think again.

The nanny government type that insists that little kids can’t sell lemonade in their front yards without a license from the city, are the same type who populate a big chunk of Congress, making laws that respond to current hot buttons.

They want to make the world a better place by telling us what to do. They are unable to exercise the restraint that characterizes a free people.  I call it the temptation towards tyranny.  You will find it in the requirement that restaurants post nutritional information on their menus. It’s rampant in San Francisco. There’s a reason why New York’s mayor is called Nanny Bloomberg.  Banning Happy Meals is typical. I hate tattoos, and piercings. I think they are remarkably ugly, but it’s their body, and not my business.

(h/t: Instapundit)



Judge Judy Takes on the Welfare State! by The Elephant's Child


%d bloggers like this: