The Conquest of Climate – Progress and Peril

Source: The Conquest of Climate – Progress and Peril

How bad will climate change be? Not very.

No, this isn’t a denialist screed. Human greenhouse emissions will warm the planet, raise the seas and derange the weather, and the resulting heat, flood and drought will be cataclysmic.

Cataclysmic—but not apocalyptic. While the climate upheaval will be large, the consequences for human well-being will be small. Looked at in the broader context of economic development, climate change will barely slow our progress in the effort to raise living standards.

To see why, consider a 2016 Newsweek headline that announced “Climate change could cause half a million deaths in 2050 due to reduced food availability.” The story described a Lancet study, “Global and regional health effects of future food production under climate change,” [1] that made dire forecasts: by 2050 the effects of climate change on agriculture will shrink the amount of food people eat, especially fruits and vegetables, enough to cause 529,000 deaths each year from malnutrition and related diseases. The report added grim specifics to the familiar picture of a world made hot, hungry, and barren by the coming greenhouse apocalypse.

But buried beneath the gloomy headlines was a curious detail: the study also predicts that in 2050 the world will be better fed than ever before. The “reduced food availability” is only relative to a 2050 baseline when food will be more abundant than now thanks to advances in agricultural productivity that will dwarf the effects of climate change. Those advances on their own will raise per-capita food availability to 3,107 kilocalories per day; climate change could shave that to 3,008 kilocalories, but that’s still substantially higher than the benchmarked 2010 level of 2,817 kilocalories—and for a much larger global population. Per-capita fruit and vegetable consumption, the study estimated, will rise by 6.1 percent and meat consumption by 5.4 percent. The poorest countries will benefit most, with food availability rising 14 percent in Africa and Southeast Asia. Even after subtracting the 529,000 lives theoretically lost to climate change, the study estimates that improved diets will save a net 1,348,000 lives per year in 2050.

What Happens When an MBA Student Raised in Communist China Reads Hayek – Foundation for Economic Education – Working for a free and prosperous world

When I was in college, we had four exchange students from Mainland China. A couple of them were majoring in physics, and we’d have occasional conversations in the physics lounge. One day, one of the students asked me what my monthly ration of potatoes was. He just couldn’t believe they weren’t rationed.

If he’d asked me that question a few years later, my response would have been to state my monthly income, and divide it by the per-pound price of potatoes. And then part two of my answer would have been to introduce the opportunity cost of buying only potatoes.


Source: What Happens When an MBA Student Raised in Communist China Reads Hayek – Foundation for Economic Education – Working for a free and prosperous world

Planning Is Counterproductive
The Chinese students in that 1999 economics class began their MBA studies much like the essay writer who explained, “I had trouble conceiving of an economic or social order that is not deliberately made for a specific purpose.” “Government planning,” it seemed to him, was needed “to bring order and coordination to otherwise chaotic economic conditions.”

Reading Hayek’s, “The Use of Knowledge in Society” convinced him otherwise. He wrote, “Central planning ignores its impossible knowledge requirements. It demanded that all the fragments of knowledge existing in different minds be brought together in one mind, a feat requiring that single mind process knowledge far in excess of what anyone could ever comprehend.”

The student realized, quoting Hayek from his book Law, Legislation and Liberty, Vol. 2, there is no need to agree on aims: “The Great Society arose through the discovery that men can live together in peace and mutually benefiting each other without agreeing on the particular aims which they severally pursue.”

Even Jeanne Dixon got a few right

Tomorrow, Sunday, April 22, is Earth Day 2018 In the May 2000 issue of Reason Magazine, award-winning science correspondent Ronald Bailey wrote an excellent article titled “Earth Day, Then and Now” to provide some historical perspective on the 30th anniversary of Earth Day. In that article, Bailey noted that around the time of the first Earth Day […]

via 18 examples of the spectacularly wrong predictions made around the first “Earth Day” in 1970 — Watts Up With That?

Markets are the worst system…

…except for all the others that have been tried.

Markets Fail. Use Markets.

Among Arnold’s themes that I especially like is this one: “Markets fail. Use markets.” The idea is the vital one that the case for markets does not depend on markets being perfect—or to use economists’ terms, the case for markets doesn’t collapse simply because of the existence of some “market failures.”

First, the concept “market failure” is notoriously slippery. The absence, say, of more light-rail transportation in Little Rock might plausibly be seen by Jones as evidence of market failure but also might plausibly be seen by Smith as evidence of the prohibitively high cost of expanding such transportation in Little Rock. Social and economic reality being what it is, there are simply no tests available to settle this question with the sort of certainty that is often achieved by tests of physical matter.

Importantly, Jones’s assessment might be correct. Perhaps investors and entrepreneurs really are underestimating the demand for—or overestimating the costs of building and operating—more light-rail lines in Little Rock. Arnold wisely advises friends of free markets to recognize and to publicly concede that markets can and do fail, even though such failure might never be provable in the way that the earth’s elliptical rotation around the sun is provable.

To reject Arnold’s advice is inadvertently to strengthen the hand of those who insist that instances of market failure are sufficient justification for government intervention. It is (at least to appear) to concede that if and when markets should fail, government should intervene to correct the failure.

But in reality markets aren’t perfect. They’re just not. Markets do sometimes fail because of (bear with me as I parade before you a band of fancy economics terms) “asymmetric information,” “moral hazard,” “time inconsistency,” “free-rider problems,” “opportunism,” “strategic behavior,” “empty cores,” “lumpiness,” “transaction costs,” “bounded rationality,” and other features of reality that prevent markets from performing ideally.

These sources of market imperfections are themselves a second reason to take seriously Arnold’s advice to use markets even though markets sometimes fail. Too many people—including economists—remain stubbornly unaware that even the proven existence of a “market failure” is only a necessary condition to justify government intervention; market failure is not a sufficient condition.

Voters and government officials don’t become more godlike simply by acting in the domain of politics. So voters and government officials are at least as likely as are investors, consumers, and other private-market participants to be poorly informed, to let their emotions block their rational faculties, and to suffer each of the other decision-making quirks that can lead to market failure.

But this fact suggests only that political outcomes are likely to be as imperfect as market outcomes. It does not suggest that political outcomes are likely to be worse than market outcomes. So why the strong advice to “use markets”?

The answer is that market institutions are better than political institutions at minimizing the frequency, intensity, and ill consequences of uninformed, emotion-ridden, and otherwise fallible decision-making.

The competition among businesses for consumers’ dollars, being never-ending, is more continuous than is the intermittent competition among politicians for citizens’ votes.


Yet another feature of government that causes its outcomes to be less desirable than those of the market is “lumpiness.” When Congress and the president agree on an annual appropriation for the U.S. military, every American is party to that specific annual appropriation. I—a dove—don’t get to have a lower appropriation than does my neighbor the war hawk. Government’s provision of national defense comes in a largely indivisible lump.

Not so in markets. If I prefer wine to beer, I get to have more wine than beer while my neighbor with opposite preferences gets to have more beer than wine. And all the while the teetotaling couple down the block chooses—and receives—a third, alcohol-free bundle of consumption goods.

Arnold Kling endorses free markets not because they are foolproof or flawless. They aren’t. Arnold supports them because the alternative is generally much worse: an especially flawed institution that fosters unusual amounts of foolishness.

Trump Tax Cuts Are Boosting Growth And Mostly Paying For Themselves, CBO Report Says

Source: Trump Tax Cuts Are Boosting Growth And Mostly Paying For Themselves, CBO Report Says

When the Congressional Budget Office released its updated budget forecast, everyone focused on the deficit number. But buried in the report was the CBO’s tacit admission that it vastly overestimated the cost of the Trump tax cuts, because it didn’t account for the strong economic growth they would generate.

Among the many details in the report, the one reporters focused on was the CBO’s forecast that the federal deficit would top $1 trillion in 2020, two years earlier than the CBO had previously said.

And, naturally, most news accounts blamed the tax cuts. “U.S. budget deficit to balloon on Republican tax cuts” is how Reuters put it in a headline.

But there’s more to the story that the media overlooked.

First, the CBO revised its economic forecast sharply upward this year and next.

Last June, the CBO said GDP growth for 2018 would be just 2%. Now it figures growth will be 3.3% — a significant upward revision. It also boosted its forecast for 2019 from a meager 1.5% to a respectable 2.4%.

“Underlying economic conditions have improved in some unexpected ways since June,” the CBO says. Unexpected to the CBO, perhaps, but not to those of us who understood that Trump’s tax cuts and deregulatory efforts would boosts growth.

In any case, the CBO now expects GDP to be $6.1 trillion bigger by 2027 than it did before the tax cuts.

The CBO report also makes clear that this faster-growing economy will offset most of the costs of the Trump tax cuts.

In a table buried in the appendix of the CBO report, it shows that, before accounting for economic growth, the tax cuts Trump signed into law late last year would cut federal revenues by $1.69 trillion from 2018-2027.

But it goes on to say that higher rate of GDP growth will produce $1.1 trillion in new revenues. In other words, 65% of the tax cuts are paid for by extra economic growth.

That faster growth will also reduce federal entitlement spending keyed to the economy — unemployment insurance, food stamps, welfare and the like — by $150 billion, the CBO says.

If you subtract that from the cost of the tax cuts, the net cost drops to $440 billion.

This is what we and other backers of the tax cuts had insisted all along. Not that tax cuts would entirely pay for themselves. But that the economic growth they generate would offset much of the costs.

Looks like we were right.

Spending Is the Real Culprit
That still leaves the problem of the deficit. By 2022, federal deficits will top 5% of GDP, something that happened only once between World War II and President Obama’s spending spree.

What’s more, national debt is on track to top 91% of GDP by 2025 and reach 96.2% by 2028.

Despite what Democrats and the media insist, the culprit here isn’t tax cuts. It is out-of-control spending, which will be nearly $1 trillion higher over the next decade thanks to recent spending deals.

Even with Trump’s tax cuts in place, federal revenues climb every year as a share of GDP, going from 16.6% this year to 17.5% by 2025. (The post-World War II average for revenues is 17.2% of GDP.)

Unfortunately, spending is on track to climb even faster — going from 20.6% of GDP this year to 23.6% by 2028. (The highest spending ever got under Obama was 24.4% of GDP, and the post-War average is 19.3%.)

This is little short of a disgrace, and shows that Republicans love spending taxpayer money as much as Democrats.

In fact, some GOP senators don’t even want Trump to use his rescission authority to strip some of the worst spending items out of the bipartisan $1.3 trillion spending monstrosity.

Someone needs to remind these alleged fiscal conservatives that if they can’t get control of spending today, it’s a virtual guarantee they’ll end up agreeing to a “deficit cutting” tax hike tomorrow.


No, Republican Tax Cuts Won’t Explode The Deficit, Despite What Deficit ‘Hawks’ Say

Love Him Or Hate Him, Trump Deserves Credit For Booming Economy

Go Figure: Tax R

School Discipline Racial Bias: Unfounded Charge | National Review

Source: School Discipline Racial Bias: Unfounded Charge | National Review

n April 4th headline in the New York Times was eye-catching: “Government Watchdog Finds Racial Bias in School Discipline.” Eye-catching, but highly misleading. The Government Accountability Office report, which was commissioned by congressmen Bobby Scott (D., Va.) and Jerrold Nadler (D., N.Y.), found only what we’ve known for a long time — that African-American students are disciplined at higher rates than white students. Buried in a footnote, the GAO report concedes that disparities by themselves “should not be used to make conclusions about the presence or absence of unlawful discrimination.”

The fact that concession was relegated to a footnote is not the only reason to doubt the GAO’s good faith. Education secretary Betsy DeVos is currently considering whether to withdraw the Obama administration’s controversial “Dear Colleague” letter on school discipline. That letter told schools that their federal funding can be cut off if they discipline African-American students at higher rates than white students, even if the difference is the result of the evenhanded administration of their disciplinary code. The GAO report was released to great fanfare on the same day that DeVos met with interested parties on both sides of the issue. The timing suggests GAO officials may have been all too happy to upstage DeVos.

Here’s what the GAO didn’t disclose: The major reason for the disparity is clear, and it isn’t bias. As painful as it may be to admit, African-American students, on average, misbehave more than their white counterparts. Teachers (including African-American teachers) aren’t making this up, and it isn’t doing African-American students any favors to suggest otherwise.

Just recently, the National Center for Education Statistics released a report showing that African-American students self-report being in physical fights on school property at a rate more than twice that of white students. Similarly, California’s former attorney general (and current senator) Kamala Harris reported in 2014 that African-American fifth-graders are almost five times more likely than whites to be chronically truant. In addition, as the Manhattan Institute’s Heather Mac Donald has reported, African-American male teenagers from ages 14-17 commit homicide at nearly ten times the rate of their white male counterparts. Why should anyone assume that rates of misbehavior in school would magically come out equal?

Too many of our leaders like to preen themselves, claiming that they can’t imagine why teachers would disproportionately discipline African-American students unless the reason is racial discrimination. But denying the facts doesn’t help African-American students. The primary victims of the Obama administration’s effort to federalize school-discipline policy are African-American students attending majority-minority schools who are struggling to learn amid increasing classroom disorder.

Why causes these differences in behavior? The short answer is that nobody can explain it perfectly. But common sense suggests, and reams of research show, that children from fatherless households as well as children from economically disadvantaged backgrounds are more likely to get in trouble than other students. That’s at least a large part of the explanation.

The GAO tries to cast doubt on that by arguing that even in schools in prosperous neighborhoods, African-American students are disciplined at higher rates than whites. But the fact that a school is in a relatively prosperous locality doesn’t mean that the African-American students attending it are as well-off as their fellow students.

Everybody’s Lying About the Link Between Gun Ownership and Homicide

Source: Everybody’s Lying About the Link Between Gun Ownership and Homicide

There is no clear correlation whatsoever between gun ownership rate and gun homicide rate. Not within the USA. Not regionally. Not internationally. Not among peaceful societies. Not among violent ones. Gun ownership doesn’t make us safer. It doesn’t make us less safe. The correlation simply isn’t there. It is blatantly not-there. It is so tremendously not-there that the “not-there-ness” of it alone should be a huge news story.

And anyone with access to the internet and a basic knowledge of Microsoft Excel can check for themselves. Here’s how you do it.

First, go to the Wikipedia page on firearm death rates in the United States. If you don’t like referencing Wikipedia, then instead go to this study from the journal Injury Prevention, which was widely sourced by media on both the left and right after it came out, based on a survey of 4000 respondents. Then go to this table published by the FBI, detailing overall homicide rates, as well as gun homicide rates, by state. Copy and paste the data into Excel, and plot one versus the other on a scatter diagram. Alternately, do the whole thing on the back of a napkin. It’s not hard. Here’s what you get:

This looks less like data and more like someone shot a piece of graph paper with #8 birdshot.

If the data were correlated, we should be able to develop a best fit relationship to some mathematical trend function, and calculate an “R^2 Value,” which is a mathematical way of describing how well a trendline predicts a set of data. R^2 Values vary between 0 and 1, with 1 being a perfect fit to the data, and 0 being no fit. The R^2 Value for the linear trendline on this plot is 0.0031. Total garbage. No other function fits it either.

I embellished a little with the plot, coloring the data points to correspond with whether a state is “red,” “blue,” or “swing,” according to the Romney-Obama era in which political demarcations were a little more even and a little more sensical. That should give the reader a vague sense of what the gun laws in each state are like. As you can see, there is not only no correlation whatsoever with gun ownership rate, there’s also no correlation whatsoever with state level politics.

But hey, we are a relatively unique situation on the planet, given our high ownership rates and high number of guns owned per capita, so surely there’s some supporting data linking gun ownership with gun homicide elsewhere, right?

So off we go to Wikipedia again, to their page listing countries by firearm related death rates. If Wikipedia gives you the willies, you’re going to have a harder time compiling this table on your own, because every line in it is linked to a different source. Many of them, however, come from Their research is supported by UNSCAR, the UN Trust Facility Supporting Cooperation on Arms Regulation, so it is probably pretty reasonable data. They unfortunately do not have gun ownership rates, but do have “guns owned per 100 inhabitants,” which is a similar set we can compare against. And we drop that into Excel, or use the back of our napkin again, and now we are surely going to see how gun ownership drives gun homicide.

Well that’s disappointing.

Remember we are looking for an R^2 value close to 1, or hopefully at least up around 0.7. The value on this one is 0.0107. Garbage.


So let’s briefly recap. Gun Murder Rate is not correlated with firearm ownership rate in the United States, on a state by state basis. Firearm Homicide Rate is not correlated with guns per capita globally. It’s not correlated with guns per capita among peaceful countries, nor among violent countries, nor among European countries. So what in the heck is going on in the media, where we are constantly berated with signaling indicating that “more guns = more murder?”

One: They’re sneaking suicide in with the data, and then obfuscating that inclusion with rhetoric.
This is the biggest trick I see in the media, and very few people seem to pick up on it. Suicide, numerically speaking, is around twice the problem homicide is, both in overall rate and in rate by gun. Two thirds of gun deaths are suicides in the USA. And suicide rates are correlated with gun ownership rates in the USA, because suicide is much easier, and much more final, when done with a gun. If you’re going to kill yourself anyway, and you happen to have a gun in the house, then you choose that method out of convenience. Beyond that, there’s some correlation between overall suicide and gun ownership, owing to the fact that a failed suicide doesn’t show up as a suicide in the numbers, and suicides with guns rarely fail.


Two: They’re cooking the homicide data.
The most comprehensive example of this is probably this study from the American Journal of Public Health. It’s widely cited, and was very comprehensive in its analytical approach, and was built by people I admire and whom I admit are smarter than me. But to understand how they ended up with their conclusions, and whether those conclusions actually mean what the pundits say they mean, we have to look at what they actually did and what they actually concluded.

First off, they didn’t use actual gun ownership rates. They used fractional suicide-by-gun rates as a proxy for gun ownership. This is apparently a very common technique by gun policy researchers, but the results of that analysis ended up being very different from the ownership data in the Injury Prevention journal in my first graph of the article. The AJPH study had Hawaii at 25.8% gun ownership rate, compared to 45% in IP, and had Mississippi at 76.8% gun ownership rate, compared to 42.8% in IP. Could it be that suicidal people in Hawaii prefer different suicide methods than in Mississippi, and that might impact their proxy? I don’t know, but it would seem to me that the very use of a proxy at all puts the study on a very sketchy foundation. If we can’t know the ownership rate directly, then how can we check that the ratio of gun suicides properly maps over to the ownership rate? Further, the fact that the rates are so different in the two studies makes me curious about the sample size and sampling methods of the IP study. We can be absolutely certain that at least one of these studies, if not both of them, are wrong on the ownership rate data set. We know this purely because the data sets differ. They can’t both be right. They might both be wrong.


Series roundup:

In the second article, we unpack “gun death” statistics and look carefully at suicide.

In the third article, we debunk the “gun homicide epidemic” myth.

In the fourth article, we expand upon why there is no link between gun ownership and gun homicide rate, and why gun buybacks and other gun ownership reduction strategies cannot work.

In the fifth article, we discuss why everyone should basically just ignore school shootings.

The sixth article presents a solution free of culture wars, and the finale isn’t about guns at all.