Category: Law
Subsidies for virtual water
From Robert Glennon:
In 2012, the drought-stricken Western United States will ship more than 50 billion gallons of water to China. This water will leave the country embedded in alfalfa–most of it grown in California–and is destined to feed Chinese cows. The strange situation illustrates what is wrong about how we think, or rather don’t think, about water policy in the U.S.
Here is more, and for the pointer I thank the estimable Chug.
Michael Pollan on Proposition 37
I am a big fan of the food writings of Michael Pollan, but his recent opinion piece on GMO labeling could be stronger.
His argument for voting “yes” on mandatory labeling is mostly mood affiliation, namely that this is part of some broader battle against “Big Food.” He doesn’t for instance consider how the Proposition may damage many smaller farmers, or that GMOs seem to lower carbon emissions and otherwise help the environment. Here is yet another discussion of benefits, or see this survey post.
His final and in fact main argument contains a simple error in economics, all too common among food writers:
…to date, genetically modified foods don’t offer the eater any benefits whatsoever…
He forgot to mention that they increase supply and lower price. Quick question: how did the GMO products otherwise obtain market share?
For the pointer I thank Michael.
Eric Maskin on Patents
From a letter to the NYTimes:
… in the software industry, progress is highly sequential: progress is typically made through a large number of small steps, each building on the previous ones. If one of those steps is patentable, then the patent holder can effectively block (or at least slow down) subsequent progress by setting high license fees.
Moreover, like any other monopolist, it has the incentive to set such fees.
Thus, in an industry with highly sequential innovation, it may be better for society to scrap patents altogether than try to tighten them.
ERIC S. MASKIN
Cambridge, Mass., Oct. 8, 2012The writer, a professor of economics at Harvard, is a 2007 Nobel laureate in economics.
An MR reader on Proposition 37 (GMO labeling)
He wrote to me:
There’s two things about the labeling debate that really bother me:
First, we have to concede that not everything can be labeled. If so, the burdens would almost instantly put huge swaths of businesses out of business. My dad, a dentist, does not have to label every instrument to describe where the metal came from, which machines made it, etc. So the question is: where do we draw the line on what should be labeled? My view is, if there is scientific evidence suggesting a plausible connection to harm, then requiring labeling makes sense. But the view of the food activists is that they should just know everything, regardless of evidence, irrespective of cost. So everyone should pay high costs because of their fears, which have no basis in evidence or fact.
On related matters, here is Mark Bittman on his ideal food labels, serving up a rather ambitious proposal.
On one specific point, he wants to levy a black mark against companies which treat their workers poorly. On the contrary, that is a sign the product likely comes from a poor country and probably you are doing the world more good in buying it and, in the longer run, bidding up wages and working conditions in that country. It helps other people more to buy from China than Portland, even though workers fare much better in the latter locale. This difference in perspective is a simple illustration of how “ideal” food labeling can rather rapidly go wrong, especially when it is tangled up with the desire to make expressive statements about what one wishes to affiliate with or not.
A further question: at which margin do consumers stop paying attention? When was the last time you read your new iTunes “I agree” contract before clicking? Attention is scarce, so we need to pick and choose priorities.
What about the cost of producing such complicated labels and the enforcement of their veracity? Food supply chains these days are often quite complicated. Do you need to monitor how the fish sauce or oyster sauce in your composite food product was produced? Bittman writes:
These are not simple calculations, but neither can one honestly say that they’re impossible to perform.
That is setting a rather low bar, and vaguely at that. Most bad economic policies would meet that standard. I would rephrase it: first figure out how many small and poor and foreign farmers this labeling proposal would put under — and then get back to us with a proposal.
Here is my earlier survey post on Bittman and evidence relating to GMOs. And here Jonathan Adler offers an excellent analysis, including freedom of speech issues.
Good sentences
…it’s simply not the case that contracting out lets you do away with the unelected panel of experts that Obama needs to make his price controls work. The premium support model of Medicare has at its heart a panel of experts determining the value of each person’s voucher since absent demographic and health status adjustment the whole system will be ruined by adverse selection.
Here are some related points from Ezra Klein, including a discussion of Paul Ryan.
Imprisonment and infant mortality
Here is a new study by Christopher Wildeman (pdf):
This article estimates the effects of imprisonment on infant mortality using data from the United States, 1990-2003. Results using state-level data show consistent effects of imprisonment rates on infant mortality rates and absolute black-white inequality in infant mortality rates. Estimates suggest that had the American imprisonment rate remained at the 1973 level—the year generally considered the beginning of the prison boom—the 2003 infant mortality rate would have been 7.8% lower, absolute black-white inequality in the infant mortality rate 14.8% lower. Results using micro-level data from the Pregnancy Risk Assessment Monitoring System (PRAMS) show that recent parental incarceration elevates early infant mortality risk, that effects are concentrated in the postneonatal period, and that partner violence moderates these relationships. Importantly, results suggest that recent parental incarceration elevates the risk of early infant death by 29.6% for the average infant in the sample. Taken together, results show that imprisonment may have consequences for population health and inequality in population health and should be considered when assessing variation in health across nations, states, neighborhoods, and individuals.
How much would it matter if we deregulated health insurance across state lines?
Allowing insurance sales across state lines comes up perennially as a way to drive down the cost of health care.
Conservatives argue that allowing a plan from a state with relatively few benefit mandates – say, Wyoming – to sell its package in a mandate-heavy state (like New York) would give consumers access to options that are more affordable than what they get now.
Liberals tend to argue this is a bad idea, contending that it would create a “race to the bottom,” where insurers compete to offer the skimpiest benefit packages.
A new paper from Georgetown University researchers suggests a third possible outcome: Absolutely nothing at all will happen. They looked at the three states – Maine, Georgia and Wyoming – that have passed laws allowing insurers from other states to participate in their markets. All have done so within the past two years.
So far, none of the three have seen out-of-state carriers come into their market or express interest in doing so. It seems to have nothing to do with state benefit mandates, and everything to do with the big challenge of setting up a network of providers that new subscribers could see.
“The number one barrier is really building that provider network that’s attractive enough to get patients to sign up,” said lead study author Sabrina Corlette. “To do that, you have to offer providers attractive reimbursement rates, which makes it difficult to get them in network.”
Corlette and her colleagues talked to insurers and regulators in all three states. And they heard this barrier come up again and again: Entering a new state is really difficult, whether there are benefit mandates or not. “We kept hearing about the cost of building a provider network that’s strong enough to market,” she said.
Sentences to ponder
Starting January 1 of 2013 the top tax rate on dividends in the US will officially become the highest in the developed world. If you live in NY for example, the top rate on stock dividends will be close to 50% – which is significantly higher than France.
…According to JPMorgan, this dividend tax will reduce mature firms’ valuations by $1.5 trillion. That’s going to hit private and state pensions as well as IRA, 401K, and 529 accounts.
And JPMorgan adds:
Capitalizing this foregone capital income generates a $1.5 trillion reduction in equity market value, or about 6% of the $24 trillion value of corporate equities at the end of 2Q. Standard wealth effects suggest this will reduce consumer spending by a little over $50 billion, or about 0.5%.
Natural Products Association opposes California GMO labelling proposition
Read their reasons here.
For the pointer I thank Mark Thorson.
*Mismatch*
The authors are Richard H. Sander and Stuart Taylor, Jr., and the subtitle is How Affirmative Action Hurts Students It’s Intended to Help, and Why Universities Won’t Admit It.
Here is the book’s website, and a summary:
… law professor Richard Sander and journalist Stuart Taylor, Jr. draw on extensive new research to prove that racial preferences put many students in educational settings where they have no hope of succeeding. Because they’re under-prepared, fewer than half of black affirmative action beneficiaries in American law schools pass their bar exams. Preferences for well-off minorities help shut out poorer students of all races. More troubling still, major universities, fearing a backlash, refuse to confront the clear evidence of affirmative action’s failure.
As you may know, the Supreme Court starts hearing oral arguments on affirmative action on October 9th. I have not much followed the empirical debate on affirmative action, but it seems to me this is likely the best recent book on the “anti” side. On the pro side, you can read The Shape of the River, by William Bowen and Derek Bok.
Lottery Winners as Natural Experiments
The Detroit News: A Lincoln Park woman who won $1 million in the Michigan Lottery and was later convicted for still collecting state welfare died Saturday from an apparent drug overdose.
…Clayton isn’t the only Michigan Lottery winner to become notorious after making headlines.
In August, millionaire Freddie Young, of Detroit, was sentenced to 20 to 35 years in prison for fatally shooting his daughter’s landlord.
Young, 64, was convicted on second-degree murder and felony firearm charges in the May 2011 killing of Australian native Gregory McNicol.
Prosecutors said Young won an estimated $1.57 million share of a Michigan Lottery jackpot in February 2011. Three months later, he shot 45-year-old McNicol over $1,000 in back rent owed by his daughter.
Here is my previous post on this subject with more systematic data.
A cultural guide for Afghanis
After eleven years, we are trying a new approach:
“Please do not get offended if you see a NATO member blowing his/her nose in front of you,” the guide instructs.
“When Coalition members get excited, they may show their excitement by patting one another on the back or the behind,” it explains. “They may even do this to you if they are proud of the job you’ve done. Once again, they don’t mean to offend you.”
This is news to me, though I would like to see it confirmed:
Fifty-one coalition troops have been killed this year by their Afghan counterparts. While some insider attacks have been attributed to Taliban infiltrators, military officials say the majority stem from personal disputes and misunderstandings.
Finally:
NATO’s coalition is described as a “work of art.”
For my house, I might rather have a Suzani.
Guns don’t kill people, printers do!
Imagine an America in which anyone can download and print a gun in their own home. They wouldn’t need a license, a background check, or much technical knowledge, just a 3D printer. That’s the vision a cadre of industrious libertarians are determined to turn into reality.
Last week, Wiki Weapon, a project to create the first fully printable plastic gun received the $20,000 in funding it needed to get off the ground. The project’s goal is not to develop and sell a working gun, but rather to create an open-source schematic (or blueprint) that individuals could download and use to print their own weapons at home.
The technology that makes this possible is 3D printing, a process during which plastic resin is deposited layer by layer to create a three dimensional object. In the past few years 3D printers have become increasingly affordable, and just last week the first two retail stores selling 3D printers opened in the United States with models ranging from $600 to $2,199.
Here is more.
The sorry truth about military drones
From Glenn Greenwald, a must-read:
A vitally important and thoroughly documented new report on the impact of Obama’s drone campaign has just been released by researchers at NYU School of Law and Stanford University Law School. Entitled “Living Under Drones: Death, Injury and Trauma to Civilians From US Drone Practices in Pakistan”, the report details the terrorizing effects of Obama’s drone assaults as well as the numerous, highly misleading public statements from administration officials about that campaign. The study’s purpose was to conduct an “independent investigations into whether, and to what extent, drone strikes in Pakistan conformed to international law and caused harm and/or injury to civilians”.
There is much more at the link. And there is this:
…American progressives cheered loudly when a similar question was posed by Al Gore in a widely celebrated 2006 speech he gave on the Washington mall denouncing the Bush/Cheney assault on civil liberties:
“‘If the president has the inherent authority to eavesdrop on American citizens without a warrant, imprison American citizens on his own declaration, kidnap and torture, then what can’t he do?'”
What has always amazed me about that is that, there, Gore was merely decrying Bush’s mere eavesdropping on Americans and his detention of them without judicial review. Yet here Obama is claiming the power to decide who should be killed without a shred of transparency, oversight, or due process – a power that is being continuously used to kill civilians, including children – and many of these same progressives now actually cheer for that.
I praise Kevin Drum for his good work on this, but too many others cannot bring themselves to utter much protest or, for that matter, defense, if that is indeed their view.
On foreign policy, here are some related points (too polemic for my tastes but still some good points) and no I am not trying to suggest Romney would be superior on these issues nor am I endorsing any other candidate.
Catalonia, just to keep things interesting
Catalonia government president Artur Mas has called early elections for the powerful northeastern region, a vote that will likely be seen as something of a referendum on independence from Spain.
In a regional parliamentary debate Tuesday, Mas set the date for Nov. 25.
Mas called the elections more than two years ahead of schedule after the central government in Madrid last week rejected a demand to grant Catalonia special fiscal powers.
That is from The Montreal Gazette. Here is FT coverage. You can follow the issue on Twitter here.
I wonder where Andreu Mas-Colell (Finance Minister of Catalonia) stands on all of this?