August 27, 2007

Sick the Book

Jonathan Cohn replied via e-mail to me recent remarks on health care regarding his comments at the Plank. He directed me to check out his book Sick. I've decided to check it out and ordered it from Amazon, but it will take a week or so to get here.

In the mean time, I looked around for some reviews, and this was the most detailed one I could find quickly.

According to Nicholas Beaudrot's review, the book is essentially a series of sob stories coupled with some observations about the status quo which Beaudrot identifies with an inability to spread risk in the current system. I suspect Cohn's argument is a bit more complicated than that, but I'm not sure how universal health care will "spread risk". Perhaps I'll find out...

August 22, 2007

Government Money for Symptoms or Real Solutions?

Recently, the bloggers at The Plank have been posting quite a few articles supporting government health care, and SCHIP (State Children's Health Insurance Program) in particular. What struck me about these two posts:

The SCHIP on Bush's Shoulder - Ben Crair
The Kids are Alright - Jonathan Cohn

was the lack of any willingness to consider what a real health care solution might look like and clear demonstration that such programs are incremental national health care programs.

Real Success

Cohn claims the program has been "remarkedly successful at reducing the number of low-income children without insurance". While it is true that SCHIP provides health care for some children, what should the real measure of success be for such a program? It is great to help children, but Ben Crair notes in his article that "since 1996...the average cost of a premium for a family plan has grown five times as fast as the federal poverty level" (emphasis mine). In other words, while the government throws money at a problem symptom (uninsured children), the underlying problem (health care costs) is becoming horribly worse and tax payers are eating it (in taxes and in funding their own health care).

Rather than stopping to wonder what government could do (or stop doing?) to address the root problem of high cost health care in the US, Crair and Cohn argue that the program needs to be expanded. Indeed, Cohn declares that he has no problem with expanding the program to cover the middle class and even upper class households.

Incremental Nationalization of Health Care

Crair reveals that "When SCHIP was first created...eligibility [was generally restricted] to families making less than 200 percent of the federal poverty level. Since then...several states have increased that cap to 300 [or 350 in NJ] percent. Cohn addresses concerns that a program established to provide health care for poor children is becoming a program to provide health care for middle class children in two ways. First, he observes more than 90% of the children in SCHIP are under 200% of the poverty line. Second, and more importantly, he admits that he "personally would have no problem with government insuring middle-class Americans -- and upper-class, too."

It seems to me that rather than ignoring the rising costs of health care and just hoping for a magical government solution, one should try to understand why health care costs so much and what can be done to solve the real problem.

August 18, 2007

The Global Warming Challenge, Take 1

Yesterday, I challenged [2] those who fear global warming and think we should take drastic and often coercive regulatory measures to save ourselves from the dreaded roasting of the earth to providing substantiated arguments for three primary ideas:
  1. Human cause
  2. Consequences
  3. Human solutions

This morning, Sharon took a crack at these on Facebook.

Human Cause

Whether or not humans caused the problem is a great argument. But I think it's irrelevant to the situation at hand, or at best, not the only thing to consider. - Sharon

It is reasonable to argue that global warming is a natural occurrence, that it will cause horrible things to happen, and that we should do something about it, but it seems like the action we should take is much less clear in this case.

Point 1 has been argued back and forth hundreds of times. It's impossible to say at this point who's feeding whose pocket, and where the truth really lies. Without being a climatologist myself, the best I can say is that there's good evidence on both sides of the argument, enough to convince any reasonable person of either side, with a sufficiently open mind to good logic and facts. All that really goes to show is that *we don't know*. - Sharon

I obviously disagree. It seems to me that the doom prophets are long on supposed disasters and calls to action, and short on solid evidence and arguments. Indeed, I would argue that this also characterizes much of the discussion we have been having here. I have spent quite a bit of text examining reasons to doubt that global warming is caused by humans and in reply I have received limited claims and opinions to the contrary and a lot of arguments that we should do something.


Sharon begins with several seemingly well justified premises:
  1. Temperatures are rising
  2. Polar caps are melting
  3. Ocean levels are rising

Before moving to any negative impacts, she attempts to bolster to expected magnitude of these three effects by arguing that global warming begets more global warming.

Positive or Negative Feedback

Sharon argues that given these premises, global warming will make itself worse through positive feedback. In support of this idea, she cites a Science Daily article. The article offers the following argument:

an increase in arctic temperatures...could result in...higher levels of carbon dioxide being released into the atmosphere...[fueling] global warming even more.

The study found...elevating summer temperatures by about 2 degrees Celsius...on plots of arctic tundra increased the CO2 emissions by 26 to 38 percent under normal snowfall. When snowfall on some plots was increased...[a reasonable possibility]...CO2 emissions increased 112 to 326 percent.

Although this is interesting, the article presents no significant impact or magnitude of this discovery. It makes no attempt to compare expected CO2 emission increases caused by this effect given expected warming with any figure (CO2 emissions from cars) that means anything at all to me. Furthermore, as the mechanism for the release is plants drawing CO2 out of the soil and releasing more of this absorbed CO2 into the air than it draws from the air and uses, I suspect the equilibrium here is relatively low. Therefore, this article provides very little reason to suspect a significant increase in global CO2 emissions and thereby global increases in the concentration of CO2 in the atmosphere.

Rather than accepting that Global Warming will worsen as a result of natural positive feedback, it seems to me that the global system is much more self-correcting. Assuming the CO2 even is a major cause of the global warming we are experiencing, it also stimulates the growth of plants, which work to extract it out of the atmosphere, as demonstrated by sources I cited in my last article. [2.5, 2.6]

Therefore, it seems to me more likely that rather than a delicately tuned system that could spiral out of control on account of minor changes, the climate seems much more like a self-correcting system. Furthermore, as the articles also demonstrate, this effect will be a boon to farmers, helping them grow more food to feed people around the world. So far, on the whole, global warming sounds like a positive thing for the world, not a negative thing.

Swift Destruction

As further evidence, Sharon points to the recent discovery of well-preserved frozen mammoths, which were probably frozen pretty quickly. I don't remember a whole lot about this case, so I can't say much about it without further research. However, as Sharon remarks, I would consider the flood as a prime suspect, but I do not think the event, whether by global or local flood, lends itself to the granted causes (melting polar caps and thermal expansion of the ocean). It seems to me that both of these lend themselves to a slow creep of rising water (mm over years) [3] rather than a sudden deluge.

It should also be noted that the mammoths froze before SUVs.

Death and Destruction

Based on these 2 arguments, Sharon makes the following argument:

The polar ice caps melting drastically in unpredictable manners causing vast havoc over the world will definitely cause a lot of death. I'm not going to argue that's a bad thing, other than that I'd kind of like humanity to be around for a while. I'm fond of them. And while aquatic life is great and all, a tree falling in the forest is just that.

This is certainly a real impact. Allow me to summarize:
  1. Vast Havoc on Land
  2. Destruction of Humanity (and probably many animal and plant species as well)

However, I do not see how these really follow from the given premises and the 2 arguments Sharon presented, given for the moment. Am I misunderstanding an extent here?

Human Solutions

But the important part of what I believe falls around point 2. Assuming A.) we'd like humans to be alive and B.) we'd like humans to be alive on THIS planet forces us to say a few things. - Sharon

Sharon follows this with the two examples:
  1. NASA's search for asteroids on route to strike earth
  2. The fate of the Spotted Owl

Essentially, the argument offered here is summed up by this excerpt:

The world is complicated. Bloody complicated, even...My point here is that we don't always know what we're doing in terms of ecological harm or help. In fact, we barely know at all. But if we do nothing, we're guaranteed to lose all of what [evolution|God] has created so far. And so it seems that even though our hand may be heavy and stupidly placed sometimes, we should try to save some of it. Because once it's gone, like the spotted owl, we're not going to get it back. And who knows but what might some species or other be essential in the long run to our survival. - Sharon

In other words, we do not know if global warming is a problem or not, but we should try to fix it anyway. Unfortunately, it is one thing to plan for contingencies and significantly restrict the production of certain goods based on the idea that something might be a problem. If we tried to fix every possible problem, not only would find ourselves attempting obviously impossible things, but we would find ourselves attempting contradictory solutions. For example, consider trying to stop global warming because it might be happening, and at the same time trying to stop global cooling, because that might be happening as well! It was not so long ago that the next Ice Age, rather than the next Scorching Age was what people were concerned about. Even today, some people are concerned that global warming will cause the next ice age. [4]

In short, we should require solid evidence that global warming is going to cause serious problems (1) and that there is something we can do about it (2). And remember, this isn't just a question of us "doing something". Many of the proposed plans to solve global warming would cause major hardship and possibly even death for many people around the world. For example, as I pointed out in my previous article [2], the diversion of corn production from food to ethanol is causing food shortages in Mexico and CAFE standards designed to decrease emissions from cars kill about 2000 people in the US every year. As someone once said, "the road to hell is paved with good intentions."

Trusting God

It is true that the Bible does outline some future events that require humanity to still be around when the events occur. As a result, we can know that Global Warming won't kill us all. However, that does not mean God won't allow humanity to hurt itself pretty badly. The Biblical account is full of people who did stupid things that God let come back to bite them.

But if I were in my home with the rising water and praying to the God of the Bible to save me, at least one scenario has him up there saying "Well you dummy, I showed you how you were supposed to be careful and responsible. It was your own choice not to be careful with your [nuclear plants|emissions|resource usage|]." - Sharon

I suspect God would also be wondering why the person was sat in the house and watched the water coming, then stayed in the house will the water came in the house. This analogy reminds me of the story of a woman who climbed onto her roof during a flood. Once there, she proceeded to pray to God for deliverance. A boat and a helicopter both came by and offered to save her, but she replied that God would save her. After drowning, she got to heaven and asked God why He did not rescue her. God replied that He tried twice, once with a boat and once with a helicopter and she turned them down.

Human Arrogance

I have heard the argument several times that the very idea that humans could affect any global system is patently arrogant and absurd. I do not subscribe to this notion. It should be noted that it was because of man's wickedness that God destroyed the earth with a flood (not by our power, of course, but on account of us).


I am not sure what fate vs. freewill really has to do with this discussion.


[Forgive me for the rhetoric, I'm a 2AR junkie. It's habit.] - Sharon

Don't worry, rhetoric happens. ;)


In summary, I asked for three arguments regarding Global Warming:
  1. Human cause
  2. Consequences
  3. Human solutions

and I'd say she spent most of her time arguing for 2.

Human Cause

She presented a reasonable dodge on 1, arguing that the whether man caused it or not, any potential problems will hurt us just as much. This approach makes it possible to argue that bad things will happen and we should do something, but it also makes it unreasonable to blame people for destroying the planet. It also makes it harder to argue that there is much we can do about (or else we'll probably have to work harder, if we've influenced the global climate once, it shouldn't be as hard to influence it again. However, if we accept that human activity has not yet significantly influenced global climates, we have a lot further to go).


Unfortunately, I did not see any specific or substantiated consequences to global warming. What I saw was two fairly weak and vague arguments attempting to support the idea that global warming will speed up and that climate change can happen fast. This was followed by several long arguments illustrating that we don't know what is happening, but we should do something. All of this was interspersed with repeated leaps of logic to the destruction of humanity and the earth as we know it.

Human Solutions

No concrete recommendations with accompanying expected results were presented, although many calls to do something were included. Again, what I am looking for here is specific actions that we can take and what results we should expect from these actions. Even if I bought the Consequences of Global Warming arguments, I'd be left with nothing specific to do or any expectation of actually helping at all. In fact, I might do the wrong thing and just make us burn or freeze faster!

In conclusion, I find Sharon's argument in defense of global warming devastations and the call to act now decidedly unsupported by facts, evidence, or reason.

[1] "Increased Arctic Temperatures Could Speed Up Global Warming". ScienceDaily. 3/2/1999.
[2] Me. "Global Warming Revisited". Ramblings. 8/14/2007.
[3] Sea level rise. Wikipedia.
[4] Thom Hartmann. How Global Warming May Cause the Next Ice Age.... 1/30/2004

Some Environmental Issues

CAFE standards

In the Facebook comments on Global Stewardship, Sharon argues that the vehicle emissions problem is exacerbated by people too poor to buy efficient vehicles, rich people too unforgivably stupid to buy efficient vehicles, and corrupt regulators who fail to enforce government standards.

First, for the purpose of clarification, I would like to know what the it in "that's the way it is" is refering to. Sharon, were you referring to the CAFE standards (government coercion) or people to poor or stupid to buy the high mileage vehicles?

Second, as I pointed out before, CAFE kills. Of course, people die driving anyway, and a few more deaths really is a small price to pay to save humanity. However, if global warming is not a real problem, then the sacrifice purchases nothing. Given the evidence I have presented that global warming is not a real problem, I am inclined to conclude that CAFE is an unjustified and unproductive regulation with horrible consequences.

Human's can impact local environments

Humans have the ability to impact our planet in ways that no other species do. And disregarding history following the industrial revolution, most of the impacts were felt relatively quickly by the communities that caused them. You fish an area out, you don't get fish, and you bugger up the food chain. Etc. - Sharon

I definitely agree that there are many excellent examples of humans drastically changing and even harming local environments and ecosystems. It also does not seem that far-fetched to posit that at least at some point, humans may be able to significantly impact such systems globally was well. However, it seems to me that in the case of global warming the facts are at best inconclusive regarding a significant human influence, and even less convincing regarding the supposed consequences of global warming.

Year of Rest

Remember how the Jews were commanded to plant crops in an area for six years, and leave it fallow on the seventh? A perfect example of intelligent planning, on a local level. Now it'd probably take 50 years of farming to totally destroy that land of nutrients...but that is stupid. Plan now, don't get buggered later. I'd have to say that knowledge like that in the old testament is one of the strongest testaments to veracity of the bible, even though I do not believe in any sort of deity.

Agreed (except on the lack of God's existence). I think it is also important to remember that the rest was not only for the land, but for the people too. I often think that our society gets caught up in acquiring things and making money and often forgets to take a break and enjoy life.

Tragedy of the Commons

...we have to come up with that type of guidelines technologies...Common sense says so, religious sense (stewardship) says so, and the planet is even starting to tell us so... - Sharon

It seems to me that a lot of the real problems that we face here are really a problem of ownership. For example, consider over-fishing. There is not much incentive for fishermen to limit there catches because they know that most other fishermen won't. This leads to a lack of restraint in fishing because the fish are held in common, and the benefits go to the first one to catch them. Such a system also lacks incentive for anyone to restock supplies, because they would be unlikely to receive a significant return on their investment as other fishermen catch their fish.

For this reason, I support fish farming, which introduces ownership into the picture. It provides a more sustainable food supply based in fish.

Similarly with logging, when the logging lands are held in common, there is a great incentive to cut trees down before anyone else gets to them, and almost no incentive to replace them for someone else to cut down later. It seems to me that a better system for the production of lumber is tree farming.

Nuclear Power and Grey Magic

Cameron offered the following argument support of the point I made on using non-sustainable resources. He remarks:

there is no reason [not?] to use something just because it is "limited."...When it comes to limited items, say nuclear fuel, what other uses do they have? And why shouldn't we use them while they are a *better* option then what we have now, until we can actually do the right thing? Making incremental improvements? Easy. Change from gasoline and refineries to electric and nuclear and THEN to electric and . Everytime I see an argument, it seems completely along the lines "USE WHITE MAGIC", and ignoring the gray magic in between. - Cameron

Sharon and Remington seem to agree, for the most part. Especially on the issue of using nuclear power. Unfortunately, as Sharon points out:

People are afraid of nuclear power. That's about it. It's not rational, it just is. Nuclear power, imnsho,is one of the better options we have right now. - Sharon

I wish it weren't true, but I think Sharon is right about why the rate of replacing coal and oil powerplants in this country with cleaner nuclear power is so slow.

Hopefully that will change in the near future.

August 14, 2007

Global Warming Revisited

Apparently, my remarks on Global Warming touched a nerve with Remington on Facebook, who made 3 comments on them today. He starts off by challenging my laziness. He asks:


What is it that You don't want to give up or change, to help change for a "subjectively" better world? Your car? Food and other resources that are transported...obscene distances to save a few cents? - Remington

First, the primary thrust of my first post was that I remain unconvinced that Global Warming is a significant problem. To summarize, Global Warming Worries rely on 3 primary tenets:
  1. Global temperatures are rising
  2. Rising temperatures are substantially caused by human activity
  3. Rising temperatures will cause many bad things to happen

While I agree that the case for tenet one is fairly strong, I believe that the case for the latter two is much weaker.

Cause of Warming

First, regarding the human cause of global warming, I pointed out that history and climate archaeology indicates that earth has experience periods of warming before, well before the advent of the gas guzzling SUV. This is further driven home by the recent discover of an error in NASA's data for US temperatures. The correction of this data knocked several of the recently touted "streak of hot years" down quite a bit in the rankings (at least in the US), giving us 4 of the top 10 hottest years in the 1930s [1] and the discovery of a global warming the 20s. [2] Admittedly, the NASA adjustment is not huge and is still relatively warm (if a degree or so can count as significantly warmer). [3]

In fact, scientists have long argued that earth's climate goes through cycles. Some short term cycles are El Nino and El Nina which go back and forth over periods of years, while some long term cycles take place over periods of thousands to millions of years (supposedly ;)), such as Ice Ages (which must obviously be interspersed with Warmer Ages). Included in this list is the previously mentioned polar melting on Mars [4], and it is quite reasonable to conclude that there are natural causes of global warming. Thus, the fact that we are observing warming trends does not mean that this is significantly influenced by human activity.

Results of Warming

Second, I pointed out that there are possible benefits to not only a warmer climate, but having more CO2 in the atmosphere. [5][6]

Error on the side of Safety?

Would it not make sense to place your bet and error on the side of safety, rather than splurge now and worry later? How much would your life really change if you took mass transportation? - Remington

As a minor point, I also observed that most of the plans to reduce emissions do not sound like they provide any significant benefit, even according to the doom prophets promoting them and these plans are not without their own harms.

Furthermore, such plans often have unintended consequences. Consider the rising cost of food in Mexico, not a rich nation, [7][8] as a result of the emphasis on using ethanol and the potential risk of corn shortfalls further exacerbating food and fuel supplies (and thereby prices). [9] And lets not forget that while biodiesel releases less CO2, it releases 2% to 10% more NOx than standard diesel, and NOx aggravates respiratory problems, such as asthma. [10]

To err on the side of safety is not a bad idea, but one can not live without some risks. Consider the man who stays in bed all day to "err on the side of safety", fearing that he may fall, be run over by a car, etc. if he gets out of bed, only to become sickly and weak as his muscles atrophy. The issue is not as simple as just doing something.

My Carbon Footprint

You will probably, as a computer programmer, have the same office that you go to, 9 to 5 (or worse) everyday, theoretically making a commute with mass transportation possible. Imagine the horrors if you gave up driving everyday from a suburb, lived near work, and rode a bicycle. - Remington

Actually, especially during the school year, I do not drive my car that much. I live close enough to the university to walk and I usually do. Furthermore, Cameron and I consistently use much less energy than the average household of our size, according to PSE.

When I work in the summer, I have car pooled at least most of the way with my dad for the last two summers. Finally, the thought of living close enough to work to ride a bike is actually inviting to me, but not something I can afford to do at this time.

Admittedly, I dislike riding buses, primarily due to their slower pace, indirect routing, and time sensitive nature. I also suspect that rumors of their energy efficiency are highly over-rated, given that much of the time, they seem to be less than full.

We Live Here Too

Your dissmissal of Shanon's first argument basically amounts to "everything we do makes us a fuck up, so why worry about fucking it up more?" - Remington

I am afraid that you misunderstood my point there. First, I agreed with the general idea of what Sharon had to say. We are stewards of this earth and thus need to take care of it. However, my second point was to point out that clarification is needed in understanding what is good stewardship and what is truly abusing the environment.

The core of my argument here was that the common method of defining human abuse seems to be to imagine an environment without humans, compare this to an environment with humans, and then instantly classify any difference as a negative effect of human beings. This is an incorrect, inconsistent, and unjustified assumption. In circular fashion, it begins by assuming any change by humans is bad, and then reaches the same conclusion. Furthermore, the converse assumption seems to be made about everything else in nature. Thus, when considering animal x, the changes it imposes on the environment are considered part of the natural system or balance, in stark constrast to humans, who are always seem to be viewed as external to the system and therefore a problem rather than a part of the system. Finally, there seems to be no justification for this double standard. My argument there was not that humans are inherent screw ups.

It cuts both ways

If even the middle class (like Brandon) can't be bothered to change their oh-so-wonderful lifestyles, why would the rich and powerful? - Remington

One of the things that strikes me about your remarks is the glaring lack of any attempt to directly engage the arguments I have presented regarding the true nature of global warming. I would submit to Remington that if he can't be bothered to actually demonstrate that a problem exists, he has no basis on which to castigate other people for (1) disagreeing with him and (2) not acting as he sees fit.

Capitalist vs. Socialist Strategy

I would love to see capitalism to support renewable energy and see it as a possible source of profits, but until it becomes, as always, more cost effective, it won't happen quickly. - Remington

The introduction of Capitalism into this discussion, it seems to me, helps to clarify exactly what is going on here in relation to government. Capitalism is, first and foremost, not an economic system. It seems to me that Capitalism is better understood as , a system of personal freedom and property, that has economic consequences. Thus, a Capitalistic society allows individuals the freedom to choose to act, or not to act, on issues such as global warming as they are convinced in the free market place of ideas to do so.

Convsersely, modern liberalism, tends towards a more socialistic approach of elite politicians controlling what we do based on their conclusions. Whether we trust individual citizens to do the right thing or not, I think we should be able to agree that we can't trust politicians any more (and probably less). It should also be noted that politicians and governments have an incentive to grasp onto doomsday scenarios such as Global Warming in order to justify expanding their power.

The Bible's Relevance

...and quotes of the bible (which, as an atheist, I dismiss immediately), are hardly enough for me to change my stance. - Remington

This does not surprise me. I also suspect that Sharon, as an Atheist, did not find them particularly persuasive either. However, as I believe the Bible to be true, I also believe it to be relevant on this issue. This is particularly relevant to others who are not Christians because Genesis is often used against Christians by environmentalists. You cite it yourself in your third comment when you remark that "they demonstrate 'dominion over the earth'". My primary intent in citing Genesis was to show that not only does the Bible teach the stewardship Sharon believes in, but it does so in balance with the human dominion that is so often cited outside of that context.

Iraq's WMDs

I won't say that any argument of mine is terribly strong, but as he believes with Iraq's WMD, I'd rather take the safe course and act now. - Remington

I am not sure how my supposed past misjudgements alter reality against my current arguments or how my own past history at all is related to the reasonability of my current arguments. I am not asking anyone to take my word on this. I am merely asking that they consider my reasons for my views. I would also like to argue that WMDs were a substantiated danger of Saddam's Iraq, but this issue is already large enough. If anyone wants to know what I have to say about that, let me know.

Fuel Efficiency

When people advocate and ask for more fuel efficient vehicles, they are not asking drivers to change their lifestyles, just drive sane vehicles that aren't gas-guzzling peices of materialist bullshit. A stretch Hummer gets 8 miles to the gallon, so that fools and their money can be parted as they demonstrate "dominion over the earth", without consideration of the harm they do. - Remington

Like Remington, I find stretch Hummer's to be absurd and wasteful. However, I do not support forcing others to not make or buy them. Stretch Hummers are also an extreme not driven by most people. Unfortunately, CAFE standards result in lighter, more dangerous cars. As a result, it is estimated that CAFE causes several thousand additional traffic deaths each year. [11]


As I pointed out earlier, Remington presents no reason to believe that Global Warming is caused by humans, that it can be stopped by humans, or that it will actually cause anything horrible to happen. He merely assumes that it does. Therefore, I challenge Remington and anyone who believes that Global Warming is man-made, reversible, and/or will cause horrible things to happen to present arguments and evidence that this is so. Specifically:
  1. Present evidence that human activity does cause significant global warming. Please include a reasonable impact here, such as 25% of Global Warming is due to human emissions.
  2. Present actions that we can take to decrease global warming significantly. This should likewise include some ballpark figure as to what we can expect to receive for our sacrifice. Ideally, this will also be tied to presented harms of Global Warming.
  3. The Harms of Global Warming. Please present real impacts. Things like death (any creature) are particularly good here. The cost of air conditioning does not count.

If anyone thinks that I am being unreasonable in these requests, please let me know how.


[1] Mark Steyn. "Warm-mongers and cheeseburger imperialists". ocregister. 8/12/2007
[2] John McCaslin. "Inside the Beltway", The Washington Times. 8/14/2007
[3] Bradford Plumer. "Global Warming Debunked! (or not....)". The Plank. 8/13/2007
[4] Kate Ravilious. "Mars Melt Hints at Solar, Not Human, Cause for Warming, Scientist Says". National Geographic News. 2/28/2007
[5] Sylvan H. Wittwer. "Rising Carbon Dioxide is Great for Plants". Policy Review. Fall 1992
[6] Mark Shwartz. "High CO2 levels can retard plant growth, study reveals". Stanford Report. 12/5/2002
[7] Brittany Sauser. "Ethanol Demand Threatens Food Prices. Technology in Review. 2/13/2007
[8] Manuel Roig-Franzia. "A Culinary and Cultural Staple in Crisis". Washington Post Foreign Service. 1/27/2007
[9] Ethanol and food price volatility. Econbrowser. 7/22/2007
[10] "Comparison of Biodiesel, ULSD and CNG for Use in On-Road Heavy-duty Applications". Steve Richardson & Company, LLC. 2004?
[11] "Corporate Average Fuel Economy". Wikipedia.

August 2, 2007

Warren Buffet's Low Tax Rate

Several weeks ago, Cameron was wondering on Facebook why Warren Buffet pays less taxes than he does. Curious, I asked for a reference and Cameron sent me this link a few days ago:

Warren Buffet Pays 17.7% Tax Rate; His Employees Pay 32.9%

The article cites Warren Buffet himself as complaining that he unfairly pays less taxes (about 17.7%) than his secretary (about 32.9%). The author then links to 4 other article commenting on the same issue. I found Greg Mankiw's remarks to be the most insightful.

Essentially, Buffet's observations are misleading for two primary reasons:
  1. Social Security Taxes
  2. Pre-Capital Gains Taxes

As Mankiw points out, the vast majority of Buffet's immediate income is taxed as capital gains, whereas his secretaries immediate income will be taxed as regular income. It appears that Buffet's figures are really based primarily on this fact (15% capital gains tax vs. a 33% rate, including 12% Social Security taxes, for his secretary).

If my memory serves me correctly, social security taxes max out at around $100k. Thus, the money Buffet makes over $100k, which is most of his income, will essentially diminish the effect of that 12% on his income to a negligible amount. Accounting for this fact, his secretaries comparable taxes were really only around 21%, just 4% more, not 16% more, as Buffet claims.

Furthermore, as Mankiw points out, Buffet's capital gains do not come from nothing. They come from assets he owns, such as businesses, which are taxed at a corporate rate of about 35%. Thus, the capital gains tax is not really a 15% tax on income, but a 35% + 15% of the remainder, effectively a double tax. This is most easily seen in the case of dividends. When a stock holder receives dividends, he receives them proportionally to his ownership in a business, which is taxed before he gets paid. Thus, his assets are taxed at about 35% in the corporate pool, and then he gets taxed another 15% (maximum) on the 65% remaining when it comes out of the pool and into his directly controlled assets. Hardly a mere 15% tax and probably enough even with multiple caveats to actually place Buffet's real tax rate significantly higher than his secretaries.