Go read this article: http://www.thenation.com/doc/20100503/parenti.
The EPA represents one of the better examples of federal oversight and regulation over a matter of interstate commerce. The federal legislation that creates the EPA permits states, if they so elect, to create their own state-wide environmental protection agencies, and to regulate environmental concerns in their jurisdiction, so long as they standards are equal to or exceed the regulations of the federal EPA. Consequently, the EPA simply sets up benchmarks for state agencies to follow, investigate polluters that may pollute in two states or more, and enforce the laws in areas where a state EPA may decline to do so, or where a state EPA does not exist.
Sounds pretty simple to me. It's a good example of the federal government using its power in a limited fashion. It could have simply regulated every state; instead, the legislation respects the ability of the state to police activities within its own jurisdiction. Imagine if the SEC, the DOC, and the ATF worked in a similar fashion.
Instead, the Democrats (with Republican support) are proposing bills that would consolidate more power into the federal EPA, and strip the ability to regulate greenhouse emission gases from many sources from the state EPAs. If that isn't outrageous enough, the proposal to have all 100% of licenses in the new cap-and-trade system auctioned off has been reduced to only 15%, and the new Kerry-Lieberman-Graham bill may reduce that amount to 0%. The licenses not auctioned off will merely be given away.
I have argued at length with many folks about how the cap-and-trade bill is an utter failure. I've heard many arguments as to its strength: (1) that it will provide revenue to the federal government to enforce laws; (2) that it will allow the market to determine the right to pollute, and provide a hard cap that cannot be exceeded; (3) that it will encourage private industry to innovate and create more environmentally-friendly technology in order to avoid the fine of polluting beyond one's limit.
All of it is bullshit.
(1) The federal government does not to the lion's share of regulating its own EPA's regulations. That would fall to the state EPAs. There's no provision in the legislation provided which forces the federal government to give money raised to the state EPAs.
(2) The market encourages monopolistic behavior, and it will happen again. Larger companies will outbid smaller companies for the right to pollute. Smaller companies will face fines to continue business, and will likely shut down. The larger companies win; the larger companies continue to pollute.
(3) Setting up tighter regulations and enforcement will also force companies to innovate and develop environmentally-friendly technology. The reason why it has not happened as of late is because the EPAs have been collectively stripped of resources. It's hard to enforce the laws when you do not have the money to conduct a proper investigation.
Much like what happened in the lending industry, the environmental protections that were fought for by environmentalists and conservationists before the new generation of politicians are being stripped away. The cap-and-trade system is a monopolistic system that will do far more damage to the environment than it will save. It is a ridiculous premise to believe that private industry will magically make carbon-emission problems a memory when they have consistently taken an adversarial position against past environmental measures. In my opinion, anyone who honestly believes that a cap-and-trade system will work is either unbelievably naive or willfully ignorant.
The federal government should enforce the laws they already have. Make the corporations pay for destroying our environment. Shut them down if they cannot comply with regulations that can be met easily. Stop listening to their bitching and whining. The best and brightest companies will emerge ahead of the pack.
That's how capitalism works.
Friday, April 16, 2010
Thursday, April 15, 2010
I love tea parties!
It seems highly unlikely that a progressive would ever have something in common with a member of the Tea Party movement. However, as Katrina vanden Heuval rightly points out, there's a great deal of common ground that could be reached between the two seemingly-disparate groups.
I think the middle and working classes pay too much of the tax load. I think that the federal government intrudes in our lives a little too much. I also think that the federal and state governments try to seize too much control over the life of the everyday American. Further, I think that our federal debt is getting unwieldy, and I think that the federal government should take more steps to balance out the budget, even in these tough economic times.
The difference is in the implementation of these changes.
Generally, the Tea Partiers demand fewer taxes -- period. There's no differentiation in their rhetoric with regard to whether there ought to be a progressive tax, whether we ought to place more of the tax burden on the wealthy and corporations, or whether we ought to adjust our taxation policies to better serve economic realities. No, the average Tea Party site simply complains of the tax burden. That's all. Their solution: less spending. This is the basis for their argument against federal stimulus activities, which have, from all accounts, helped to slow the disintegration of the over-inflated American economy.
This, of course, is a short-sighted approach to the matter.
The fact is that the economy is spurred by spending. Jobs are not created when spending is tight, and if the American consumer is not spending -- and they are not -- then someone or something is going to have to "spend" in order to keep businesses afloat. This is a simple and unescapable reality: in order for jobs to be created, there must be spending. If the American people cannot afford it -- and they cannot -- then the burden falls on the government.
Obviously, there has to be a way to make up this spending. This has been the trap of Republicans since Reagan, a trap that was avoided by Bush, Jr., by either calculation or stupidity. When Reagan dropped taxes for the wealthy, he discovered that social programs simply could not remain. Medicare and Social Security loomed high in the horizon. So, like a wise conservative, Reagan bit the bullet and raised taxes in the next year. George Bush, Sr., made the promise of no new taxes, but had to raise taxes after a drop in order to secure payment for the increase in spending that was required at the end of the savings-and-loan scandal, and to ensure that the government would continue to float after Desert Storm. However, unlike his Republican predecessors, Bush, Jr., decided that it would be best to make record tax breaks for the wealthy and corporations in the wake of the invasion of Afghanistan and Iraq. He did it when he added benefits to Medicare and reformed bankrtupcy laws. In short, the only President to think it would be a good idea to lower taxes in the face of increased spending was George Bush, Jr. That's it. If you're a Reagan fan, therefore, you have to recognize the fact that you need to raise taxes in order to fund your government projects.
So, you need the stimulus, and you need to raise taxes in order to keep the entitlement programs running. You can't slap the middle class around because they are the hamsters that keep the consumption-machine of the American economy running. What's the harm in taxing the rich folk that benefit from the toil and labor of the weak?
In fact, if we all took a moment to go back to our Capitalism textbooks, we would find that Adam Smith himself proposed that those who benefited the most from capitalism and the protection of laws ought to pay the highest level of taxes. Productive labor should not be taxed because the result would increase production costs; unproductive labor, however, should be taxed because it has less of an effect upon the cost-pricing of goods. The difference between the dollar an investor earns as a dividend from ownership of stock and the dollar earned by the laborer on the job is, therefore, the fact that the investor put neither time nor effort into the production of the good or service provided. Subsequently, the dollar the investor receives has been taken out of the productive economy, and put into his pocket.
If the Tea Party folks and the progressives actually sat down and talked, they would probably find room for negotiation and understanding. There's nothing wrong with wanting to lower taxes for the middle and working classes. They deserve it. However, so long as the Tea Party movement continues to cling to out-dated and incorrect asssumptions about how a capitalist economy works, there will always be a difference that cannot be bridged.
We call that difference "ignorance".
I think the middle and working classes pay too much of the tax load. I think that the federal government intrudes in our lives a little too much. I also think that the federal and state governments try to seize too much control over the life of the everyday American. Further, I think that our federal debt is getting unwieldy, and I think that the federal government should take more steps to balance out the budget, even in these tough economic times.
The difference is in the implementation of these changes.
Generally, the Tea Partiers demand fewer taxes -- period. There's no differentiation in their rhetoric with regard to whether there ought to be a progressive tax, whether we ought to place more of the tax burden on the wealthy and corporations, or whether we ought to adjust our taxation policies to better serve economic realities. No, the average Tea Party site simply complains of the tax burden. That's all. Their solution: less spending. This is the basis for their argument against federal stimulus activities, which have, from all accounts, helped to slow the disintegration of the over-inflated American economy.
This, of course, is a short-sighted approach to the matter.
The fact is that the economy is spurred by spending. Jobs are not created when spending is tight, and if the American consumer is not spending -- and they are not -- then someone or something is going to have to "spend" in order to keep businesses afloat. This is a simple and unescapable reality: in order for jobs to be created, there must be spending. If the American people cannot afford it -- and they cannot -- then the burden falls on the government.
Obviously, there has to be a way to make up this spending. This has been the trap of Republicans since Reagan, a trap that was avoided by Bush, Jr., by either calculation or stupidity. When Reagan dropped taxes for the wealthy, he discovered that social programs simply could not remain. Medicare and Social Security loomed high in the horizon. So, like a wise conservative, Reagan bit the bullet and raised taxes in the next year. George Bush, Sr., made the promise of no new taxes, but had to raise taxes after a drop in order to secure payment for the increase in spending that was required at the end of the savings-and-loan scandal, and to ensure that the government would continue to float after Desert Storm. However, unlike his Republican predecessors, Bush, Jr., decided that it would be best to make record tax breaks for the wealthy and corporations in the wake of the invasion of Afghanistan and Iraq. He did it when he added benefits to Medicare and reformed bankrtupcy laws. In short, the only President to think it would be a good idea to lower taxes in the face of increased spending was George Bush, Jr. That's it. If you're a Reagan fan, therefore, you have to recognize the fact that you need to raise taxes in order to fund your government projects.
So, you need the stimulus, and you need to raise taxes in order to keep the entitlement programs running. You can't slap the middle class around because they are the hamsters that keep the consumption-machine of the American economy running. What's the harm in taxing the rich folk that benefit from the toil and labor of the weak?
In fact, if we all took a moment to go back to our Capitalism textbooks, we would find that Adam Smith himself proposed that those who benefited the most from capitalism and the protection of laws ought to pay the highest level of taxes. Productive labor should not be taxed because the result would increase production costs; unproductive labor, however, should be taxed because it has less of an effect upon the cost-pricing of goods. The difference between the dollar an investor earns as a dividend from ownership of stock and the dollar earned by the laborer on the job is, therefore, the fact that the investor put neither time nor effort into the production of the good or service provided. Subsequently, the dollar the investor receives has been taken out of the productive economy, and put into his pocket.
If the Tea Party folks and the progressives actually sat down and talked, they would probably find room for negotiation and understanding. There's nothing wrong with wanting to lower taxes for the middle and working classes. They deserve it. However, so long as the Tea Party movement continues to cling to out-dated and incorrect asssumptions about how a capitalist economy works, there will always be a difference that cannot be bridged.
We call that difference "ignorance".
Sunday, April 11, 2010
Can the problem of rising post-secondary tuition be fixed?
I'm one of those lucky fools who have parents affluent enough to put him through the years of college that led him to a comfortable life and career. I'm not going to pretend that I know exactly what my friend is going through. She's got loans, see: lots of them. She has loans for her undergraduate education. She has loans for her graduate degree. Hell, she has loans for costs related to getting her professional certification. Loans, loans, loans.
So, that got me thinking: how much has tuition gone up in the past few years? According to whatever media source you decide to read, the number can range from 30% over three years to 4.3% annually, for private colleges. Apparently, there's some disparity between public and private colleges, and their tuition increases. One news article from the U.S. News and World Report suggests that decreasing public subsidies have resulted in increases in tuition, despite budgets being flat or decreased. Meanwhile, private schools, apparently, have spent more money from endowment funds and other private sources, but have managed to keep tuitions from going through the roof; in fact, some have even lowered their tuition costs.
There are many other reasons, of course. Statistical analysis tends to hide the fact that private schools can hire the best and brightest because they can demand higher tuition from incoming students. Public schools, meanwhile, have a duty to the public as a whole, meaning that they have to cater to a wider range of students, with varying needs, and must also spend funds to support students with special or exceptional needs. The bottom line is that the cost of education is slowly slipping away from more and more students. If per-student subsidies are decreasing -- which makes sense in our economy -- then what the public is beginning to see is the true cost of public post-secondary education.
It's expensive.
Consider the following. Suppose a private university charges $35,000 per student per academic year, and a public university $10,000 per year. Also suppose that the profit per student per year for a private university is $10,000, but the public university enjoys a $10,ooo stipend from the State every year per student. In an economy where subsidies decline, and budgets tighten, a public university is going to struggle to keep tuition low. This is because public universities, by their nature, must already keep a tight budget in order to follow their mission of providing affordable post-secondary education opportunities to the public. Meanwhile, the private university -- who has enjoyed years of profits reinvested into itself -- may decide to willingly take in less profit in the face of rising costs. What's really happening, though, is not a rise in the cost of education for the universities (that is not uniform for all schools providing the same services), but an end of public subsidies that have artificially lowered the cost to the student (and his or her family).
As a result, there's no quick fix to the problem of rising tuition. Public universities are already running on shoe-string budgets, with professors that could easily jump into the private sector and make double their money. Neither downsizing nor decreasing subsidies is a solution to the problem, though those paths are tempting. Perhaps the problem cannot be fixed at all; perhaps the subsidies have all made us accustommed to the thought of being entitled to a good education. The reality is that we are now paying for the expansive opulence of public post-secondary education facilities.
And new stadiums for our beloved Buckeyes.
So, that got me thinking: how much has tuition gone up in the past few years? According to whatever media source you decide to read, the number can range from 30% over three years to 4.3% annually, for private colleges. Apparently, there's some disparity between public and private colleges, and their tuition increases. One news article from the U.S. News and World Report suggests that decreasing public subsidies have resulted in increases in tuition, despite budgets being flat or decreased. Meanwhile, private schools, apparently, have spent more money from endowment funds and other private sources, but have managed to keep tuitions from going through the roof; in fact, some have even lowered their tuition costs.
There are many other reasons, of course. Statistical analysis tends to hide the fact that private schools can hire the best and brightest because they can demand higher tuition from incoming students. Public schools, meanwhile, have a duty to the public as a whole, meaning that they have to cater to a wider range of students, with varying needs, and must also spend funds to support students with special or exceptional needs. The bottom line is that the cost of education is slowly slipping away from more and more students. If per-student subsidies are decreasing -- which makes sense in our economy -- then what the public is beginning to see is the true cost of public post-secondary education.
It's expensive.
Consider the following. Suppose a private university charges $35,000 per student per academic year, and a public university $10,000 per year. Also suppose that the profit per student per year for a private university is $10,000, but the public university enjoys a $10,ooo stipend from the State every year per student. In an economy where subsidies decline, and budgets tighten, a public university is going to struggle to keep tuition low. This is because public universities, by their nature, must already keep a tight budget in order to follow their mission of providing affordable post-secondary education opportunities to the public. Meanwhile, the private university -- who has enjoyed years of profits reinvested into itself -- may decide to willingly take in less profit in the face of rising costs. What's really happening, though, is not a rise in the cost of education for the universities (that is not uniform for all schools providing the same services), but an end of public subsidies that have artificially lowered the cost to the student (and his or her family).
As a result, there's no quick fix to the problem of rising tuition. Public universities are already running on shoe-string budgets, with professors that could easily jump into the private sector and make double their money. Neither downsizing nor decreasing subsidies is a solution to the problem, though those paths are tempting. Perhaps the problem cannot be fixed at all; perhaps the subsidies have all made us accustommed to the thought of being entitled to a good education. The reality is that we are now paying for the expansive opulence of public post-secondary education facilities.
And new stadiums for our beloved Buckeyes.
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