Being Green Is Not a Sign of Health

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There are two new reports in the Wall Street Journal about flops in the green energy movement — further illustrations of how much hype there is in it.

The first (Jan. 19) reveals that the vaunted new “amazingly energy efficient,” compact fluorescent light bulbs aren’t so energy efficient after all.

Pushing the hapless consumer to replace incandescent bulbs with CFLs (compact fluorescent lamps) has been the received wisdom among lawmakers for years, and no more so than in California, the ever-green state. California’s utilities alone spent $548 million over the past seven years in CFL subsidies. In fact, California utilities have subsidized over 100 million CFLs since 2006. And on the first of this year, the state started phasing out incandescent bulb sales.

Of course, when I say that the California utilities have been subsidizing the CFLs, I really should say that the aforementioned hapless consumers have been doing so, because all the subsidy money — about $2.70 out of the actual $4.00 cost of the CFL, i.e., more than two thirds of the actual cost — is paid by the consumer in the form of higher utility rates.

Naturally, the rest of the country — and, for that matter, the world — is set to follow California’s lead on CFLs. A federal law effective January 1 of next year will require a 28% step-up in efficiency for incandescent bulbs, and bans them outright by 2014. One consequence of this federal policy — unintended, perhaps, but none the less foreseeable — is that the last US plant making incandescent bulbs has been shut down, and China (which now makes all the CFLs) has seen even more of a jobs expansion, and is able to buy even more of our debt.

The UN is also pushing CFLs to help solve global warming, estimating that about 8% of all greenhouse gas emissions worldwide are caused by lighting. The World Bank has been funding the distribution of CFLs in poorer nations. Last year, for example, Bangladesh gave away five million World Bank funded CFLs in one day.

But now — surprise! — California has discovered that the actual energy savings of switching to CFLs were nowhere near what was originally estimated. Pacific Gas and Electric, which in 2006 set up the biggest subsidy fund for CFLs, found that its actual savings from the CFL program were collectively about 450 million kilowatt hours, which is only about one-fourth of the original estimate.

There are several reasons for the fact the switch to CFLs hasn’t lived up to expectations. First, not as many of the heavily subsidized CFLs were sold as originally estimated. PG & E doesn’t say why, but I will hazard a guess, based on personal experience. Many consumers dislike the light produced by CFLs, which they find dimmer or more artificial in its effect. Also, many complain that lights create static in AM radio reception. In a free market (i.e., one that, among other things, contains no subsidies), it is likely that few consumers would want to switch.

Surprise! — California has discovered that the actual energy savings of switching to compact fluorescent lamps were nowhere near what was originally estimated.

Second, the useful life of the CFLs is less than 70% of original estimates. Amazingly, the estimates were based on tests that didn’t factor in the actual frequency with which consumers turn them on and off. CFLs burn out more quickly the more often they are turned on and off than do the old incandescent bulbs.

Not mentioned in the story is the fact that CFLs contain mercury, and so are supposed to be specially disposed of (which presents an added cost to the consumer in time, money, and energy). The alternative is for the consumer to throw them out in the regular trash, making toxic waste sites out of ordinary trash dumps, with future clean-up costs of God only knows what.

The second Journal story (Jan. 18) reports that Evergreen Solar has closed its Massachusetts plant and laid off all the workers there.

This is deliciously ironic. Evergreen Solar was the darling of Massachusetts. Governor Deval Patrick, devout green and all-around Obama Mini-Me, gave Evergreen a package of $58 million in tax incentives, grants, and other handouts to open a solar panel plant there. In doing so, he simply ignored Evergreen’s lousy track record — a record of losing nearly $700 million bucks in its short life (its IPO was in 2000), despite lavish subsidies from federal and state governments.

Now Evergreen is outsourcing its operations, blaming competition with China, and whining like a bitchslapped baby about China’s subsidies of its solar energy and its lower labor costs. But Evergreen has itself sucked up ludicrously lavish subsidies, and it knew all along about China’s labor rates compared to Massachusetts’.

So Patrick winds up looking like a complete ass, and the taxpayers of Massachusetts wind up eating a massive loss.

But that’s not all. Near the end of last year, the Journal (Dec. 20) revealed still another case of American crony capitalism, of the green sort. It turns out that the wind industry — aptly dubbed “Big Wind” — copped a one-year, $3 billion extension of government support for wind power. It was part of the end-of-2010 tax deal.

Originally, this government subsidy was a feature of the infamous 2008 stimulus bill, under which taxpayers were forced to cover 30% of the costs of wind power projects. The American Wind Energy Association (AWEA) begged for the subsequent bailout, because without it 20,000 wind power jobs would be lost (one-fourth of all such jobs in America). But despite the billions in subsidies, Big Wind is sucking wind; its allure is dropping like a stone. The AWEA’s own figures show a 72% decline in wind turbine installations from 2009, down to the lowest since 2006.

Besides trying to make the 30% subsidy(!) permanent, the AWEA is pushing for a national “renewable energy” mandate that will force utilities to buy a large chunk of the power they sell from renewable sources (mainly solar and wind), irrespective of the fact that the price of renewable energy is sky high. The association has gotten more than half the states to enact such mandates, with higher energy bills for consumers as the result. Not surprisingly, Big Wind is also pushing the EPA to make energy from fossil fuels vastly more costly.

According to the federal government’s own figures, wind and solar take 20 times the subsidy to produce electricity than do coal and natural gas. So you can see why Big Wind keeps blowing smoke up the public’s rear about the fabulous future of renewable energy. You can also see why Big Wind is such a big contributor to the campaign coffers of Democratic politicians. They are the only ones who keep this outrageous boondoggle awash in money.

Meanwhile, the promises of green energy look more and more hollow, every day.




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At Least Some People Get It

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The Obama administration continues to scratch its collective head over what to do about creating jobs. After the disastrous failure of the numerous mega-billion-buck bailouts intended to lower the unemployment rate, even the now happily departed lame-duck Congress refused to pass another massive pork bomb. The Obamanistas, devoted Keynesians all, have pushed through more spending more quickly than any other administration in history. The national debt, which stood at $13 trillion on June 2, 2010, closed the year at $14 trillion. So we have spent beyond the dreams of Keynes’ avarice, and the unemployment rate still hovers near 10%.

Meanwhile, up in the Great White North, our Canadian friends have shown the way. For the fourth year in a row, they are lowering their federal corporate tax rate. It has just been dropped to 16.5%. This is less than half the American federal rate of 35%. Amazing, considering that Canada is sometimes supposed to be the pure welfare state, while we are the pure capitalist one.

And it won’t stop there. In 2012, the Canadian federal rate will drop to 15%, bringing the combined federal and provincial rate on businesses to about 25%. Back in 2000, the combined Canadian corporate income tax rate was 42.6%, so the decline has been dramatic.

Besides cutting the corporate tax rate, the Canadian government has eliminated corporate surtaxes as well as levies on capital.

All these incentives, combined with Canada’s healthy financial sector — Canada never created crazy government agencies to encourage and then purchase bad mortgages (it apparently grasps the concept of moral hazard!) — are enticing increased business investment. Spectra Energy of Houston, for example, has decided to invest $2 billion in Canadian energy and infrastructure projects. The Citco Group, a financial firm, has decided to open its only North American bank in Canada. And the big accounting firm KMPG has moved many of its operations to Canada.

American corporate taxes remain the second highest in the industrialized world. Our competitors to the north have grasped the idea that to tax an activity is to deter it. The Canadians obviously want more business, not less. And the reason they want more is that they grasp the fact that business creates jobs.




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Are You Kidding?

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Jonathan Alter, a leading Obama sycophant, appeared on a talk show recently with Washington Examiner columnist Tim Carney. The topic turned to a comment made by Rep. Darrell Issa (R-CA), who observed that Obama’s administration is “one of the most corrupt administrations ever.” Issa’s claim sent Alter into an apoplectically angry rant, saying there was “zero” evidence of corruption.

To Alter’s evident surprise, Carney immediately demurred, incredulous that Alter couldn’t see any evidence. While Carney said that Issa’s comments were “hyperbolic,” he gave a few choice illustrations, and later listed a few more on the Examiner’s website. Carney’s list included the following:

1. Ex-Google lobbyist Andrew McLaughlin, employed by the White House as a tech policy specialist, chatting with Google lobbyists about the rules governing “Net Neutrality,” from which Google stands to gain. (Carney’s blog doesn’t mention it, but Google gave lavishly to the Obama campaign.)

2. A former Goldman Sachs lobbyist took the job of the Treasury Department’s Chief of Staff within nine months of his Goldman employment. (Again, we can add that upper-level management at Goldman Sachs was a big contributor to Obama’s coffers.)

3. Former H&R Block CEO Mark Ernst was hired by Obama to help the IRS write new regulations on tax preparation (which Block subsequently endorsed, because it stands to benefit from them).

4. Obama officials have met “off-campus” repeatedly in order to dodge the Presidential Records Act.

5. When AmeriCorps Inspector General Gerald Walpin started investigating Obama’s friend and supporter Kevin Johnson, Walpin was summarily fired.

6. In the Obama-orchestrated Chrysler bankruptcy, the UAW was given the bulk of the stock in the new company (while the secured creditors were burned).  Naturally, the UAW was a big contributor to Obama’s campaign.

As good as Carney’s list is, it only scratches the surface. Here are a few more illustrations:

7. Besides the crony bankruptcy deal that gave the bulk of the stock in the new company to the UAW, there was a similar deal that gave a big chunk of the new GM stock to the UAW.

8. Moreover, in the recent IPO, the feds held onto the public’s shares while the UAW was allowed to dump its own. This ensured that the UAW pension fund would be made whole.

9. ACORN, the bogus “community service” group for which Obama was counsel and which worked so hard to register voters (even fictional ones) on Obama’s behalf, received lavish amounts of “stimulus” money.

10. When Obama was campaigning for Democrats in the last election, he doled out stimulus money in the states he visited (especially Nevada). Indeed, the stimulus fund was a grab-bag of cash for Obama’s backers. A disproportionate share of the money was spent in precisely those states that supported Obama.

As to whether Issa’s statement was “hyperbolic,” I don’t think so. The Obama administration has racked up a lot of corruption in its two years in office. If it isn’t one of the most corrupt administrations in history, it is surely on track to become so.




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The Government's "Green" Jobs

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Jonathan A. Lester, president of Continental Economics Inc., has written an insightful critique of artificial stimulus to wind power and the like (“Gresham’s Law of Green Energy,” in the Cato Institute’s journal Regulation, Winter 2010–2011, pp. 12–18). Like similar critiques, however, it could benefit from better placement of emphasis.

Lester laments the wasteful diversion of resources into uses that would otherwise not pay (waste, that is, barring untypically sound “externality” arguments). Furthermore, as for jobs created by subsidy- or regulation-based spending on green energy, the money so spent would have to come from somewhere. It would necessarily be diverted from spending on other public or private activities, where jobs otherwise created or maintained would be lost.

Such arguments put too much emphasis on spending itself relative to the allocation of real resources, including labor. Would the workers newly drawn into green jobs come from elsewhere, or would they have otherwise remained unemployed? Do green subsidies, tax breaks, and regulations really remedy economy-wide unemployment exceeding the frictional unemployment of normal times?

Unemployment in a recession reflects discoordination. Mutually advantageous transactions among workers, employers, and consumers are somehow frustrated. That is what needs attention. Putting emphasis on spending and its destinations is superficial. As W.H. Hutt used to say, spending is a measure of transactions accomplished; it is not what drives transactions.

Now, what impedes transactions in a recession? Usually or often it is a deficient quantity of money in relation to desires to hold it at the prevailing price and wage level. Sometimes (as now, apparently) the demand to hold money has increased, even if only passively or by default, because individuals and firms are especially uncertain about what transactions would be worthwhile. Adding to the usual uncertainty about business is uncertainty about taxation, government deficits and debt, complicated and costly regulations, and other government interventions, including unintended consequences of earlier ones.  This is what needs attention, not the allocation of spending between green and other employments.

Recession is not something to be remedied by shifting resources around. Besides channeling resources into relatively inefficient uses, artificially favoring green energy obscures the true nature of recession.




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When Pigs Fly

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There is an old adage in which I find considerable wisdom: “When a pig flies, you don’t criticize it for not staying up very long.” I take the meaning of this saying to be that when someone who has a habit of making poor choices finally makes a moderately good one, you ought to praise the success, even if you feel he could have done more.

Well, a pig has flown. President Obama, who for his first two years ran the most anti-free-trade administration since the days of the Smoot-Hawley tariff, has managed to salvage a free-trade agreement (FTA) with South Korea, after stalling it for two years and being snubbed in Asia when he tried to strongarm a new deal. He managed a minor renegotiation, getting some relief from Korea’s environmental regulations on our cars and a slowing of our phase-out of tariffs on the Koreans’ trucks. He did this, however, at the cost of keeping Korea’s tariffs on our cars in place for five more years, and of an extra two years of Korean tariffs on American pork products. Hardly worth the wait on a deal that was already well negotiated in 2007.

But the good news is that Obama will finally let the deal proceed, and that 95% of all US and South Korean tariffs will be eliminated within five years. The deal also opens up greater trade in services, allowing (for example) more Korean banks in America and more American banks in Korea. That’s all good.

Now that Speaker Pelosi is finally history, chances are good that Speaker Boehner (“Blubbering Boehner” to his chums) will get the FTA with Korea through the House — and also the FTAs with Colombia and Panama, which have been languishing on the sidelines since Bush left office. It would be helpful if the pig could stay aloft long enough to help get these deals past Congress. So far, Obama hasn’t bothered to do that. He has shown a touching deference to the unions that oppose them, and that gave so much to his presidential campaign.

Yet it seems to be dawning on the exceptionally obtuse Obama that it may be far more useful to his 2012 reelection (gag!) campaign to have lower unemployment than to have higher union contributions poured into his campaign coffers. Perhaps the pig isn’t just flying; perhaps he has had an epiphany.

If for that we are hardly ecstatic, we can at least be satisfied.




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The New Landscape of Libertarianism

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New York magazine published an article called “The Trouble With Liberty” in its January 3–10, 2011 issue. I was intrigued by a line on the magazine’s cover. It asked, “Are we all libertarians now?” And what I found in the essay was very interesting.

The author, Christopher Beam, presents a brief yet wide history of libertarianism, ranging from Ron and Rand Paul and Paul Ryan to David Boaz to Ayn Rand and Friedrich Hayek. Beam explains that libertarianism has elements from both the Right and the Left and does not fit easily into either mode, and he outlines the various attempts to promote a libertarian country — from those that would enlist the Republican Party or the Libertarian Party, to Brink Lindsey’s Liberaltarianism, to the Free State Project and the Seasteading Institute.

Beam pegs libertarians as crazy old uncles or Dungeons & Dragons players, but his history of libertarianism is quite complimentary. He says that the Founding Fathers and the Constitution were actually more libertarian than anything else. The gist of the essay is that with the Tea Party movement and the rise of Rand Paul and Paul Ryan, libertarianism is on the rise and our moment has come.

But halfway through, Mr. Beam changes his tone and gets to the heart of his essay, which is a critique of libertarianism and an explanation of why he thinks it is a bad policy for the United States. His arguments aren’t theoretically sophisticated and are designed to appeal to a mass audience: if there are poor people, and charity can’t provide for them, then we need welfare or else they will steal from us; we need public education in case the free market can’t educate everyone; we need a central bank in order to print a uniform currency. He mentions “asymmetrical information” and “public goods,” and argues that if the bailout had not happened then innocent investors and homeowners who innocently misunderstood the riskiness of their loans would have been punished. “There’s always a tension between freedom and fairness,” he says, and we libertarians “pretend the tension doesn’t exist.”

We must shift the alignment of America’s political discourse so that socialism no longer sounds like common sense, and our proposals seem like the new common sense.

Libertarianism can never succeed, he claims, because politicians must compromise and libertarians refuse to compromise or cooperate. One of the overarching criticisms in the essay, and perhaps its most obnoxious, is the subtle implication that libertarians have such a hard time accomplishing real change because we know that our theories are mere impractical abstractions unsuitable for pragmatic flesh-and-blood reality, so we would be revealed as idiots if we ever achieved political power.

The refutations of Beam’s arguments are so obvious that I need not detail them. What is more significant is the mere existence of his essay. It is, in my opinion, one of the early post-Tea Party attempts by the Left to come up with an ideological response to people with open minds from taking libertarianism seriously. I strongly doubt that libertarianism has reached the peak of its popularity, but what this essay signals to me is that people who ten or twenty years ago might never have known what libertarianism is are now hearing the word “libertarianism” and asking what it means. Beam provides a leftist answer to that question. But he also cites surveys showing that more people now define themselves as libertarians than ever before, and that this poses a threat to the liberal-conservative establishment.

If the Tea Party phenomenon grows and Rand Paul’s career continues, we should expect to see many more such essays. I think that they will all follow Beam’s pattern. “The Trouble With Liberty” shows what two challenges we must overcome in order to be taken seriously.

First, there is something, call it “common sense” or the “social imagination” or whatever, but there is a set of simple political ideas that, whether true or false, permeates a culture. We need to introduce arguments into the American intellectual culture to refute the “common sense” arguments for statism, such as the argument that we need a welfare state to rescue the poor. We must shift the alignment of America’s political discourse so that socialism no longer sounds like common sense, and our proposals, which Beam skewers as extremist, seem like the new common sense. This is similar to what Glenn Beck claims the socialists did to us with the Overton Window – shifting cultural common sense by gradually introducing extreme ideas until they become mainstream  — but it works in reverse.

Second, we must prove that libertarianism can work in practice as well as in theory, and we must call upon our libertarian politicians to show the American people that it is possible to have noble ideals while still being pragmatic and getting things done. In my opinion the danger is not that Rand Paul and Paul Ryan will make too many compromises; it is the opposite: they will be too idealistic and take an all-or-nothing approach to change, and thus will be unable to work with their Republican colleagues. In that way, they will confirm the fears that Beam would like to promote.

“Libertarianism is still considered the crazy uncle of American politics,” Beam writes. It is only natural for the liberal-conservative establishment to oppose us by laughing at us so loudly that nobody will take us seriously. That is, after all, right out of Ellsworth Toohey’s playbook. The question is how we will respond to the laughter — by behaving like weird extremists and impractical idealists, or by showing that we deserve to be taken seriously and that our abstract theories really will work in practical reality.




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Not Gittin' Outta Gitmo

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One has to think that the libertarian Obamanistas — libertarians who supported Obama, thinking that he couldn’t spend more money than the Republicans, and would at least end the war on terror and dramatically reduce the military posture of the country, must feel some uncertainty about their guy.

Certainly, in terms of spending and deficits, he makes Bush look like a fiscal hawk. In his two years in office, Obama’s yearly deficits have been over four times the size of Bush’s largest. And in terms of state control of the economy — the socialization of the medical system, the nationalization of the auto industries, the massive increase in regulations, the dramatic increase in the size of the federal bureaucracy, and the expansion of environmentalist hegemony over natural resources — he has explored a whole New Frontier of statist economics.

As to the war on terror, he hasn’t ended it, or even diminished it appreciably, much less brought in a new era of isolationism. We are still in Iraq — though scheduled to exit, but no earlier than Bush’s plans called for — and are fairly well stuck in Afghanistan. Virtually all of Bush’s executive orders on the war on terror remain essentially unchanged.

A recent Reuters report (Jan. 7) underscores this point. While Obama was in the Senate, then on the campaign trail, then during his first two years in office, he relentlessly bashed Bush for holding prisoners outside the regular court system, detained at the Guantanamo Bay prison. Obama promised to give the Gitmo detainees fair trials in our regular court system, though he also promised they would all be convicted and jailed — well, indefinitely!

But quietly, on a Friday when news coverage is guaranteed to be minimal, Obama signed a law that prohibits bringing the remaining 175 Gitmo prisoners here for court trials.

He said he had no choice but to sign the bill — the defense authorization act for fiscal 2011 — because the military funding was necessary, even though the bill contained that provision banning domestic civilian trials for the terrorist detainees. And he vowed to fight to get the provision repealed — although the ban was put in the bill by one of the most left-wing Congresses in American industry, so it is hard to see why he thinks he can get it through a more right-wing Congress.

Obama’s claim that he had to sign the bill is just a lie. He certainly could have vetoed it and made it clear to Congress that he would not sign any future bill that included the provision. But he didn’t, and this raises a dilemma about him.

Perhaps he still wants to give the Gitmo guys domestic civilian trials, and has merely decided that trying those prisoners here would be too politically costly. Certainly, the public opposes such trials by a large margin. But if that is the case, he is not much of a man of principle.

On the other hand, perhaps he has changed his mind on the matter, and no longer views such trials as worthwhile. After all, the showpiece of the Obama policy of domestic civil trials for terrorists was the trial of Ahmed Ghailani, the Gitmo guy who was involved in the 1998 bombings of US embassies. The trial ended late last year with the jury finding Ghailani not guilty on 279 of the 280 counts Obama’s Justice Department brought against him, finding him guilty on only one count: planning to destroy US property. He was not found guilty of even one of the 224 murder counts against him. Hardly bracing for the prospect of keeping the other Gitmo guys safely away from society.

However, if Obama has changed his mind, what does that say about his judgment — compared to, say, George Bush’s?




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The Serious and the Buffoons

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I like to congratulate countries that, unlike ours, take energy policy seriously. Serious energy policy simply means that you seriously try to find and exploit new energy sources, using reality-based rather than delusional thinking.

Our present administration, which cherishes the delusion that noisy, ugly, and inefficient windmill farms and costly, ugly, and inefficient solar panel farms will allow us to dispense with oil, gas, and coal, is the paradigm case of unserious (i.e., joke) policy makers.

For being serious, kudos should go to Israel. As noted by the Wall Street Journal on Dec. 30, it has encouraged extensive exploration for fossil fuels off its shoreline, and the search has paid off prodigiously. The most recent discovery may tip the Mideast balance of power in Israel’s favor. A huge field of natural gas, aptly called Leviathan, apparently contains 16 trillion cubic feet of natural gas (according to Noble Energy, the American firm developing it). That field alone could supply Israel’s gas needs for a century. It might even make Israel a net energy exporting country.

Leviathan was found in the vicinity of smaller fields discovered earlier in the Levant Basin, an area of Mediterranean seabed off the coasts of Israel and Lebanon. The first two fields, Noa and Mari, discovered in 1999 and 2000 respectively, together contain about 11 trillion cubic feet of natural gas. The Tamar and Dalit fields, both discovered in early 2009, together contain about 9 trillion cubic feet.

The US Geological Survey estimates that the Levant Basin holds a total of 122 trillion cubic feet of natural gas, not to mention 1.7 billion barrels of oil. To put that in perspective, the Levant Basin’s estimated gas reserves are nearly half of what America’s entire natural gas reserves are thought to be.

These huge fields, together with Israel’s laws favoring energy exploration and development, caused the Israeli energy sector stock index to soar 1,700% in 2010. They also led to Lebanon’s passing laws to develop its share of the Levant Basin.

A second story appeared in the Journal on Dec. 31. It reports that even as our unemployment rate hovers near 10% and the price of gasoline continues to rise, the harlequins in the Obama administration have issued a directive sealing off even more lands from productive exploration. This directive requires the Bureau of Land Management (BLM) to search its huge holdings to find “unspoiled” back country that it can then decree to be “wild lands” and lock away from development of any kind.

This may block from use many millions of acres of land in Alaska, Arizona, California, Colorado, and everyplace else where the feds own land. (The BLM supervises 250 million acres of land!) You can just forget about the uranium, oil, natural gas, and other valuable resources of the areas the BLM shuts down.

The BLM used this power freely back in the 1970s and 1980s, but in 2003, after a lawsuit from the government of Utah, it relinquished the power. Now Obama, having lost his legislative power, is trying to build up the executive power necessary to carry out his jihad against carbon energy, and reverse the 2003 decision. He seems to think that shortages of — and high prices for — energy are the keys to economic prosperity.

All this inclines me to say “Mazel tov!” to the Israelis, and “Go to hell!” to the Obamanista environmental extremists, who are trying to choke off this nation’s energy.




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The Dangers of Diagnosis

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“Nearly 1 in 5 Americans had mental illness in 2009.” This recent CNBC online headline captured my attention.

The brief article that followed was based on a report by the Substance Abuse and Mental Health Services Administration, a federal agency (oas.samhsa.gov). The article repeats highlights from the agency’s report entitled “Results from the 2009 National Survey on Drug Use and Health: Mental Health Findings,” available in PDF form.

The article states that an estimated 45 million US residents had a mental illness, and 11 million had a serious mental illness, and that these numbers reflect increasing depression among the unemployed.

The article’s intention — to create alarm — is loosely veiled. If people do not have access to interventionist and preventive treatment, any number of woes can follow: “disability, substance abuse, suicide, lost productivity and family discord.” Lost employment equals lost health insurance equals a lack of access to treatment equals a crisis. The insinuation is that government should step in to close the treatment gap.

Finding this article was fortuitous. Only days before I had read an article in Skeptic magazine about the “foibles of the Diagnostic and Statistical Manual V” — the diagnostic guide for mental health practitioners. (For details, see “Prognosis Negative” in Skeptic, volume 15, number 3 [2010], by John Sorboro, himself a licensed, practicing psychiatrist.)

The state of the psychiatric arts today, complicated by increased government control over our nation’s healthcare industry, should alarm all citizens, not just libertarians.

According to Dr. Sorboro, the upcoming version of the DSM will have a marked increase in diagnosable psychiatric disorders, which may include “compulsive shopping” and “Post Traumatic Embitterment Disorder.” But the problem with the DSM has to do with the validity of what it says.

To rectify the unscientific nature of prior versions of the work, the third version was intended to “increase reliability by standardizing definitions.” Still, critics maintained that “the rhetoric of science — rather than scientific data — was used by the developers of the DSM-III to promote their goal, and science did not support [their] claims.” In 1994, the DSM-IV was published, listing 297 disorders. The latest revision is set to increase that list. Yet according to Dr. Sorboro, almost “every major psychiatric construct is seen as being of questionable validity by a vocal group within the field itself[,] or outside it.”

Psychiatric disorders are supposed to be pathological constructs, as Parkinson’s disease is a pathological construct. For a construct to be valid, Sorboro states, it must differentiate itself from other pathological constructs and provide a theoretical framework for prediction and specific intervention. He likens psychiatric pathological constructs to the construct for fibromyalgia — “a loose collection of non-specific complaints.” Fibromyalgia lacks an underlying, identifiable pathology. So do psychiatric constructs.

Critiques of the DSM include claims that it’s a collection of “the moral objections of a group within power [who] desire to medically pathologize another group for self serving purposes,” and that it is “a-theoretical and purely descriptive.” Evidence in support of the former critique is that homosexuality was not entirely removed from the DSM’s list of mental disorders until the latter half of the 1980s!

A diagnosis based on the DSM is not a divination of pathology. The DSM is tautological. It describes. It does not explain. Thus, diagnosis is subjective, not objective. Sorboro uses bipolar disorders to illustrate. Bipolar I disorder appeared in the DSM-III in 1980, followed by Bipolar II Disorder, Bipolar Disorder NOS (not otherwise specified — that’s worrisome), and cyclothymia. There has been a correlative rise in the diagnoses of such disorders — one statistic that Sorboro cites is a 4000% increase in bipolar disorder diagnoses in children during the past decade, despite the fact that mental health practitioners know “hardly anything more of real scientific significance about bipolar disorder than we did in 1980.”

Soboro states that medical disease classification evolves in a messy and inconsistent way, “and often has to do with politics and not just compelling scientific fact. It’s just much worse in psychiatry.” For example, contributors to the DSM-V include “health care consumers”; and as Sorboro says, no other branch of medicine would ask consumers for advice in defining pathology. Moreover, the American Psychiatric Association taskforce handling this revision is conspicuously closed and non-transparent — task force members must sign confidentiality agreements and cannot keep written notes of their meetings.

Hmm.

I have been skeptical of the DSM since I first read it. I was a judicial clerk, and my judge kept a copy of the DSM-IV on one of his bookshelves. He used it for reference during sentencing hearings and when he presided over mental health hearings. During lulls in my clerkship tasks, I read several large chunks of the DSM-IV. My initial thoughts were: there certainly are some people with severe mental problems, but this is bullshit. Symptoms of the indicated mental “conditions” were so encompassing that anyone and everyone could be classified as having some type of mental disorder.

My best friend from high school is a psychiatrist, and after reading the DSM-IV, I asked her about it. She said that it gives a practitioner guidelines for diagnoses. But don’t guidelines have to guide? I asked. Isn't a diagnostic process that has no conceptual limits wholly subjective? The flu is marked by symptoms that make it the flu and not a common cold or pneumonia. But even a brief reading of the DSM shows that mental illnesses are not marked by unique symptoms. Why? My friend had a few forgettable justifications, but no answers.

Homosexuality was not entirely removed from the DSM’s list of mental disorders until the latter half of the 1980s!

Many Liberty readers are familiar with libertarian criticisms of the mental health industry. But the state of the psychiatric arts today, complicated by increased government control over our nation’s healthcare industry, should alarm all citizens, not just libertarians. Psychiatric abuse by states against citizens is well documented; psychiatric imprisonment for dissidents in the Soviet Union is just one example.

The dangers are clear. In the legal realm, when a criminal statute is overbroad, behavior otherwise constitutionally protected is criminalized, subjecting more citizens to state control. Overdiagnosis of overinclusive mental disorders will subject more citizens to treatment — which, under Obamacare, means subjection to more government control. This should be enough to give anyone an anxiety disorder. Considering the political nature of mental “disease” classification, I wonder if a disorder marked by “irrational fear” of a “benevolent government” might be among the disorders included in the new DSM.




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Your 401k Is a Sitting Duck

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In Liberty some time back (“Pension Peril,” March 2009), I reflected on President Kirchner of Argentina, who helped fund her country’s failing public pension system by simply stealing money from the private pension savings accounts that many of her countrymen had managed to accumulate. Her government expropriated (“nationalized”) the $24 billion private pension funds industry in order to save the public system, forcing citizens to trade their savings for Argentinean Treasury bills of dubious creditworthiness. I suggested then that such a thing might happen in the US, where Americans have many billions put aside in various retirement vehicles — a tempting target for any cash-starved government.

I think that dark day is growing closer. My feeling is confirmed by some troubling news, recently reported by the Adam Smith Institute’s wonderful website. The author of the report, economist Jan Iwanik, notes that a number of European countries are shoring up their tottering public pension plans by the Peronista tactic of stealing from those who have prudently put aside some extra money for their retirement.

Bulgaria, for example, has put forward a plan to confiscate $300 million from the private savings accounts of its already impoverished citizens and put those funds into the public social security system. Fortunately, organized protest has cut the amount transferred to “only” $60 million — for now, at least. And Poland has crafted a scheme to divert one-third of all future contributions that are made to private retirement savings accounts, so that the money flows instead to the public social security scheme. This will amount to $2.3 billion a year stolen from frugal people to shore up the improvident public system.

The most egregious case is that of Hungary. This state, which has been teetering on the verge of insolvency for years, has taken a drastic punitive step. Under a new law, all citizens who have saved for their retirement face a Hobson’s choice: either they turn over their entire retirement accounts to the government for the funding of the public system, or they lose the right ever to collect a state pension, even though they have paid and must continue paying contributions to the state system. The Hungarian government thus hopes to pocket all of the $14.2 billion that the hapless Hungarians have managed to squirrel away.

As our own national insolvency grows nigh, it is just a matter of time before the feds take a swing at the enormous pot of private retirement savings held by Americans. If you think you’ve heard nothing but class warfare rhetoric from this administration, just wait till it feels the need to take your 401ks, IRAs, and so on. The demonization of the productive and the prudent will be loud and shrill.




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