Mike | The Disappointed Optimist

The Growth of Wind Power

According to a new report by the U.S. Department of Energy, wind energy is the fasted growing source of power in the nation. In 2012, wind accounted for 43% of all new electric power production. According to wind sector sources, wind production employs over 80,000 American workers.

Wind production is not only clean, but it helps diversify the power grid. Many wind production facilities, meaning wind mills, turbines and distribution systems, are localized and on a small scale. This minimizes the impact of a power outage at a large facility, or a down major power distribution line.

According to some reports, nearly 90% of all wind turbines were made in America.

The full news release can be found here: Wind Energy Production

The report also included a link to an interactive map showing where wind generating facilities are located. The map can be found here: Wind Farm Growth

According to the map, there is a single wind production facility in Kentucky, near Ashland.

Economic Growth in the Developed World

Recently an economics professor from Northwestern named Robert Gordon published a working paper on line called “Is U.S. Economic Growth Over?” His central thesis is that the effects of the Industrial Revolution have played out across most of the world’s economies, and the high growth rates present during various periods of the industrial revolution will largely be a thing of the past.

Part of the reason is that modern countries are about as modern as they will get. We might get new gadgets, but there aren’t any truly transformative technologies on the horizon. Phones might get fancier with more functions, but we are at a point where most people in the developed world, and certainly in the US, have the ability to quickly and easily communicate with other people. One example cited in the article is that a contemporary kitchen has most of the same appliances as a kitchen of 50 years ago – modern stove and oven, refrigerator, dishwasher – but the kitchen of 1960 was dramatically different from the kitchen of 1910, where food was cooked over a real fire and where ice boxes held real ice. Modern kitchens might have new gadgets, cool wine decanters, food processors, etc., but these have only a minor impact on making cooking easier and more efficient.

The countries with higher rates of economic growth are those countries where people are moving from a pre-industrial existence to a modern existence. Think China, where peasants are moving from the country-side, where they lived in huts and cooked over fires, to the city where they live in apartments with modern appliances.

A New York Magazine article analyzing the article can be found here: The Blip.

The Full article can be found here: Is U.S. Economic Growth Over.

I should note that I have not read the full article, but have read the New York Magazine piece.

The article notes that many other economists view Gordon as unduly pessimistic. They note that new technologies still have the power to transform economies. The bad news is that there is probably some truth to Gordon’s theory. It does explain why economic growth has slowed in modern economies.

Nothing Funny About Nullification

State Senator Damon Thayer was on The Daily Show recently arguing that Kentucky had the right to nullify laws that it did not agree with. The show mocked Thayer, and plenty of other people have piled on, but it seems like a good time to actually address the issue of nullification.

Thayer’s argument was that the people of Kentucky did not vote for President Obama so they don’t necessarily have to comply with laws he supports. He also mention in an interview in the newspaper that he discussed the Tenth Amendment on the Daily Show, but that argument was cut.

The Tenth Amendment says “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.” Conservatives frequently argue that this amendment proves that the nation was envisioned as a federation, and that the states are equal to, if not supreme over, the national government.

The only problem with this argument is the Supremacy Clause, which says that “This Constitution, and the laws of the United States which shall be made in pursuance thereof … shall be the supreme law of the land …..” Courts, including the Supreme Court, have consistently held that this provision means that Federal laws supersede state laws, and that the states cannot nullify federal laws.

States have long sought to nullify federal laws that they don’t like. In the early years of the nation southern states attempted to nullify federal laws regarding slavery that they opposed. The first attempt was the Kentucky and Virginia Resolutions, drafted and pushed largely by Thomas Jefferson and James Madison in opposition to President Adams’ Alien and Sedition Acts, that said the states had the power to interpret the Constitution and could not be forced to apply laws they found unconstitutional. Jefferson attempted to get other states to pass similar resolutions, but every other state rejected the idea.

There were numerous subsequent cases where the Supreme Court rejected the idea of state nullification of Federal Law. In 1809, in the case of United States v. Peters, 9 U.S. 115 (1809), the Supreme Court held that the state of Pennsylvania could not pass a law nullifying a federal court decision. In McCullock v. Maryland, 17 U.S. 316 (1819) and Osborn v. Bank of the United States, 22 U.S. 738 (1824) the Supreme Court held that states could not impose restrictions on the Federally chartered Bank of the United States. In Worcester v. Gorgia, 31 U.S. 515 (1832), the Supreme Court held that the state of Georgia could not pass a law making Georgia law applicable on Indian Territory, which is governed by federal treaty.

The “Nullification Crisis” involved an attempt by the state of South Carolina to nullify the Tariff of 1828 (known as the Tariff of Abomination) which imposed duties on imports of certain manufactured goods. The Tariff benefited the industrial Northern States, but hurt the South. South Carolina passed a law saying the Tariff was unconstitutional, and that the state would not enforce it. President Andrew Jackson, no friend of federal power, threatened to send in federal troops to enforce the laws, but the issue was resolved by a compromise Tariff bill.

The Court dealt with nullification and slavery in a number of cases, particularly involving the Fugitive Slave Act, which required free states to send slaves back to slave states. Pennsylvania tried to prevent enforcement of the law, but the Supreme Court said they could not nullify federal law, in Prigg v. Pennsylvania, 41 U.S. 539 (1842). The Wisconsin Supreme Court held the Fugitive Slave Law unconstitutional, but the U.S. Supreme Court overturned the Wisconsin decision, and also set out a detailed analysis of the idea of nullification. See, Ableman v. Booth, 62 U.S. 506 (1859).

The Civil War ended many arguments over the balance between state and federal power, but the issue arose again starting in the 1950’s, and the national government began to deal with civil rights for African-Americans. In Brown v. Board of Education, 347 U.S. 483 (1954), the Court held that the ideas of equal protection in the Federal constitution superseded state laws segregating schools. Most Southern states were outraged, and they dredged up the theory of nullification. Arkansas passed a law that said that the state did not have to integrate its schools, and the federal government could not make them. The Supreme Court, in a 9 to 0 decision, said that the states had no power to nullify federal law. See, Cooper v. Aaron, 358 U.S. 1 (1958).

I find it troubling that conservatives are again trying to revive this long discredited legal theory. I also find it strange that conservatives, who are supposed to believe in and respect the lessons of history, are so ignorant of history.

A Tale of Two Programs

I was recently reading a blog post by a conservative commentator talking about using on line resources and on-line course to “fix” the “problems” with American higher education. Something struck me about this. There is no doubt that there are some problems facing the American higher education system, the main one being price, and certainly the availability of on line courses could provide greater access at lower cost. But the American higher education system is the best in the world. In fact it is the envy of the world. China and Saudi Arabia are trying to build new universities from scratch to mimic American universities. Students from around the world flock to the United States to attend our colleges and universities. And according to the Shanghai “Academic Ranking of World Universities” the vast majority of the top universities in the world are in the United States.

One could look at this and say that the market has spoken. The worldwide market for education has said that the higher education system in the United States is the best in the world. Despite this many conservatives hate it, and want to change it. On the state level many conservative state legislators are trying to strip funding from public colleges and universities. And at least two conservative governors, Rick Perry of Texas and Bob McDonnell have proposed plans to restructure state schools that most academics say will erode the quality of state universities.

So the United States has the best higher education system in the world, and conservatives want to change it.

Compare that with the American health care system. It is a system fraught with problems. Millions are uninsured and lack access to adequate health care services. They do have access to emergency health care services, but this drives up the cost of health care for everyone else. The cost of health care is rising far faster than the rate of inflation. The United States spends more per capita on health care than any other nation, yet we have a poor infant mortality rate and a relatively low life expectancy, particularly for a developed country. The cost of health care is a drain on the economy, and a competitive disadvantage for American businesses.

Despite these problems, conservatives oppose changing the system.

I’m baffled. Conservatives want to change the best system in the world, but don’t want to change a deeply flawed system. Weird.

Economists Agree: Immigration is Good for the Economy

Now we just need to get politicians on board.

A recent study indicates that most of the growth in the U.S. labor force over the next twenty years or so will be from immigration. The study also shows that immigration is good for the economy. This should not be a surprise since most economic studies show the positive effects of immigration. In fact the only people who disagree are conservative politicians.

This study also shows that most immigrants live in metropolitan areas. And for metropolitan areas to thrive they need to continue to be a magnet for immigration.

An article describing the study, with a link to the study itself, can be found on Quartz at Almost all Growth.

The Barr Report July 29

This week Rep. Barr talks about his work on the Financial Services Committee to reform the government supported mortgage system, stopping furloughs at the Blue Grass Army Depot, and funding for the NSA. One of the common themes in all three notes is his desire to get a good swift partisan kick in at every opportunity.

Lets start with his comments on the so called PATH Act, which is an attempt to reformulate government support for some mortgages, and to replace the Freddie Mac and Fannie Mae. Barr says that this committee “took decisive action to build a responsible housing finance system that will help ensure hardworking Kentucky taxpayers are never again asked to bail out corrupt government enterprises like Fannie Mae and Freddie Mac.” I do not doubt that there are problems with the Federal home mortgage system, but I have never heard either Fannie Mae or Freddie Mac described as corrupt.

Next he talks about the furloughs at the Blue Grass Army Depot that are part of the sequestration, which required across the board cuts to both domestic and military programs. The sequestration was purposefully designed to eliminate discretion in programming the cuts, but Barr insists on blaming Obama for not using his discretion in the cuts.

Finally, Barr notes that he voted against cutting funding for certain NSA programs that currently acquire phone records from all Americans. This program came to light with the leaks from former NSA contract analyst Edward Snowden, and shocked most people, even supporters. In response to these leaks Representative Justin Amash, Republican of Michigan, offered an amendment to the Defense Appropriations Bill that would prevent the NSA from obtaining these phone records, except when a person is a legitimate subject of an investigation. The problem is that the NSA needs to have data on all phone calls beforehand so that they can learn who a subject has called. It is a complex problem, and the main opponents of the program have been libertarian and Tea Party Republicans, like Rep. Amash. Barr opposed the cuts. (I should note that so do I, and I wrote about the issue a few days ago on the blog.). But here’s where Barr’s politicized nature comes in. Barr calls the amendment the Amash/Conyers Amendment. Conyers refers to Democratic Congressman John Conyers on Michigan, who is also a supporter of the Amash Amendment. But apparently Barr cannot miss the opportunity to note that a liberal Democrat also supports this bill, and imply that liberals are not patriotic and don’t want to protect America. It’s meaningless, but a nice bit of political theater.

Woman’s Work

I recently came across an interesting study from the Organization for Economic Cooperation and Development that said that countries where women have more economic and political power are richer than countries where women have less power. In other words, the more that women participate in the economy, and in the workforce, the better off the economy of the country.

The study can be found here: Gender Equality in Education, Employment and Entrepreneurship.

The United States ranks pretty high on the list. But it is interesting that some politicians want to limit the ability of women to participate in the economy. There are even some social conservatives, who are generally aligned with the business wing of the Republican Party, who openly call for a return to a world where women stay home.

If the economy improves when more women participate, then we should support policies that help women fully participate in the economy. What kinds of programs? How about programs that support better and cheaper day care? Or programs that ensure adequate maternity leave so that qualified women can easily re-enter the workforce after having a baby. Or laws that ensure equal pay for equal work, so that women are fully compensated when they fully participate. Or laws that ensure adequate access to contraception and reproductive health care services so that women can control their bodies.

The Cost of Discrimination

A recent book, Sharing the Prize: The Economics of the Civil Rights Revolution in the American South, by Gavin Wright, argues that the civil rights movement not only gave blacks basic civil rights, but also has a major beneficial economic impact on the economy of the south.

(Note: I have not yet read the book. I am basic my comments on excerpts and reviews.)

Wright notes that, as barriers to participation for blacks fell away, the overall economy of the south improved.

What we see, in other words, is not a redistribution in the name of historical justice, but an integration of black workers into the regional economy. When we consider that the civil- rights movement opened the South to inflows of capital, creativity and new enterprises from around the world, it becomes clear that most white Southerners were also long-term beneficiaries of this revolution. From: http://www.bloomberg.com/news/2013-02-13/the-stunning-economic-impact-of-the-civil-rights-movement.html

If the removal of discrimination improved the economy then it seems likely that the imposition of discrimination harmed the economy. That should be painfully obvious to anyone who spends time thinking about it. There were obvious costs to Jim Crow. It cost money to install additional drinking fountains and rest rooms. Clearly businesses lost money by not serving black customers. And clearly it cost money to have a police force that spent time enforcing racial restrictions rather than dealing with crime. It cost time and money for state legislatures to debate and enact racially discriminatory bills.

Discrimination not only cost the subject of discrimination, but it costs those who discriminate. They spend time and money discriminating when they could spend that time and money on more productive things.

If discrimination is bad for an economy then it seems likely that the corollary is true: non-discrimination – openness, acceptance, tolerance – are good for the economy.

Security, Surveillance, and Privacy

Edward Snowden’s recent leaks revealed that the NSA (the National Security Agency) has been collecting information on every telephone call made in the United States. The NSA doesn’t listen in on the calls, but it does record the caller’s telephone number, the recipient’s number, and the duration of the call. The Director of the NSA, James Clapper, has confirmed that the NSA is, in fact, collecting this phone information.

The scope and extent of NSA surveillance of American citizens is troubling to say the least, and down right scary to say the most.

Republican Representative Justin Amash of Michigan has filed an amendment to the pending Defense Appropriations Bill that would end “blanket collections” of this phone information, and only allow collection of this data when someone is the subject of an investigation. Amash and an interesting group of liberals and conservatives are concerned that the government is going too far in collecting information on all Americans.

This issue raises important questions about balancing security and privacy. Most people agree that one of the main purposes of government is to protect the security of the nation, but is it possible to go so far in protecting security that it infringes the rights of the people? Certainly so. Clearly it might be possible to maintain the maximum level of security in a militarized police state, but it would no longer the nation our founder’s created. Individual rights, political liberty, and personal freedoms are core components of this nation. We should be loath to trade away any of those in a misguided attempt to protect our security. But most people are certainly willing to accept certain reasonable restrictions in a balanced and thoughtful attempt to gain some added level of security. So is the NSA program the former of the later?

The NSA says that they need to have all of this information so they can sort through it to see who is calling certain places (say the lawless regions on the Afghanistan Pakistan border) or certain numbers. The NSA says that in order to find the needle in the haystack, they need to be able to sift through the hay. The NSA also says that they have used this process to stop a number of terrorist attacks.

Rep. Amash and others say that the NSA is violating our right to privacy, but the courts have long held that there is no right to privacy in our phone records. We have a right to privacy in those things that we keep private, and have far less right to privacy in those things that are essentially not private. The question is whether there is a reasonable expectation of privacy.

The courts note that when we make a phone call we rely on the phone company, and today we rely on numerous phone companies. Once upon a time when we made a phone call we would call an operator who would connect us to the person we were calling. Clearly the operator knew who we were calling, and we knew that the operator knew. While phone companies have long since abandoned operators to connect phone calls, they still need to know where the call is coming from, and where it is going to, in order to make the connection. We give this information to the phone company in a trade off in order to reach our desired party. We may not realize that we are doing this, but we are. And, once upon a time, we used to get a phone bill that showed every number we called, and the duration of the call. This was standard on the old long distance phone bill. So we were aware, whether we appreciated it or not, that the phone company had this information. And if we were sharing this information with the phone company, then it could not be private.

The same holds true for e-mail (since we rely on our ISP and the phone companies to transmit the data) and snail mail (since the address on an envelope is on the outside for anyone to see).

I am concerned about this level of scrutiny and surveillance of the American people. It does smack of big brother. But I also recognize the need for searching through this kind of information. I think the better solution is not to kill the program, but to create better oversight. Perhaps there should be a Congressional Committee that can periodically review the operation of the program. I also think the Foreign Intelligence Surveillance Court (the secret court created to review requests for subpoenas to conduct investigations based on the data obtained from these broad surveillance programs) should have clear, and public, criteria for authorizing a subpoena, and should periodically publish information about how many requests are made, and how many are granted. And if it turns out that government agencies are abusing the program, then perhaps we should consider restricting it, or eliminating it entirely.

The Barr Report July 21

The Uncertainty Edition

Representative Barr often says that uncertainly is one of the key problems stiffing economic recovery. This is a fairly standard conservative line, which says that businesses are unwilling to expand due to the uncertainty of future taxes or regulation. One of the key complaints by conservatives, like Rep. Barr, is that there is a great deal of uncertainly regarding Obamacare, or the Affordable Care Act. Businesses are afraid to hire, according to this theory, because they are uncertain about the impact of the new law on their health care costs for their employees.

What is Barr’s solution to this uncertainty? Create more. Barr has voted with the majority Republicans many times to repeal Obamacare. This week he voted with the majority to delay implementation of various aspects of Obamacare. In other words, delay and extend out the uncertainty.

Read Barr’s Press Release here.

The reality is that the only way to prevent uncertainty is to never allow anything to change. Change is the foundation of uncertainty. But change has been a constant in human history. (Perhaps some day I’ll address the irony of that statement, but not now.) The other way to deal with uncertainty is to get past it. Once you are past it you will no longer be uncertain. Once Obamacare is implemented there will no longer be uncertainty about its impact. All of the speculation, all of the dire warnings, will then have to be weighed against the actual impact.

The reality is that Obamacare will be implemented. Unless Obama is removed from office the law will move forward. Even if Republicans sweep out the Democrats in 2014, various aspects of the law will already be in effect.

The insurance exchanges (AKA the free market in action) will begin operating in October. By November there will no longer be any uncertainty about the impact of the exchanges. The individual mandate will go into effect next year. And so by the 2014 elections in November, we will know the impact of Obamacare, and there will no longer be any uncertainty.

So if you don’t like uncertainty it would seem that you would want to find out the reality. But it is possible that what conservatives really fear is that reality. We will find out in a few months.