Technically feasible, but economically unfeasible? - On UCS Report on Renewables

Flaws in the UCS Report on Renewables
IER, April 15, 2009

In the ongoing debate over “renewable energy,” one of the primary sticking points is the compliance costs that government mandates would impose on utilities, consumers and the broader economy. Critics of a federal electricity mandate have warned that the Southeast in particular would be hard-hit by proposals to produce a certain percentage of electricity from approved technologies.

In response, the Union of Concerned Scientists (UCS) has recently released a new study prepared by the Southern Alliance for Clean Energy.[i] The study surveys some of the literature and declares that:

The Southeast has the ingenuity and renewable energy resources to become more prosperous and energy independent. Utilities across eleven Southeastern states can tap homegrown clean energy resources to meet a significant percentage of electric power demands. Our analysis of renewable energy estimates in the region show sufficient resources to fulfill an aggressive national mandate for renewable energy.

Yet despite the triumphant conclusion, the UCS’s touted study does little to move the debate forward. For one thing, its projections of renewable “potential” rely on very optimistic assumptions, and pick only the most favorable estimates from among the spectrum of plausible forecasts. Perhaps more significant, because the study focuses on matters of engineering, rather than economics, it almost entirely misses the point: The issue is not whether a proposed renewable electricity mandate is technically feasible, the question instead is how much will it hurt the economy? Unfortunately, the UCS study contributes nothing to answering this crucial issue.


Rosy Scenarios

The UCS study explores the feasibility of a national renewable electricity mandate that requires 15% generation from renewables by 2015, 20% by 2020, and 25% by 2025. (It’s fortunate they did not attempt such legislation a few decades ago; one can imagine President Jimmy Carter signing a law requiring 85% renewables by 1985, 90% by 1990, and 95% by 1995…)
In achieving its optimistic projections for renewable electricity production in the Southeast, the UCS study relies on many assumptions. In its words:

Twenty-first century policies must prioritize actions that will achieve energy independence and minimize global warming pollution. In addition to a national Renewable Energy Standard (RES), the following policies are needed (and assumed in this analysis) to help achieve these goals:

• National carbon dioxide “cap-and-trade” or equivalent policy.
• Third party suppliers of electricity paid at market-based cost of service, reflecting off-peak and peak system value.
• A solar “carve-out,” feed-in tariff, or other policy that provides a premium value for investment in solar energy (to the extent that this value is not already reflected in payments at a market-based cost of service).
• Complementary government biofuel policies.
• Responsible and predictable permitting for low-impact hydro, onshore wind, offshore wind and biomass power plants.
• Extension and expansion of state and federal tax credits for renewable energy and efficiency through 2020.

Beyond the above, the study goes on to explain that its analysis also assumed:

• Moderately high fossil fuel costs.
• Relatively low capital costs for renewable energy projects that are sustained from recent experience.
• Biomass resources proven to be available at the higher end of resource potential range.
• Relatively rapid rate of technology adoption.

The Energy Information Administration (EIA) has done various studies on renewable mandates[ii] that show that the Southeast would need to buy credits from other regions to meet the mandate and that the Southeast’s major renewable technology is biomass.[iii] The EIA analyses compare favorably with the assumptions for biomass resources and capacity in the UCS study’s “feasible” category,[iv] but the resources in the study’s “potential” category[v] are more than double EIA’s total “potential” for biomass. EIA’s maximum generation capacity in the Southeast from biomass is 40.5 gigawatts, irrespective of price, while the UCS study purports over 90 gigawatts of “total biomass potential.”[vi]

Other renewable technologies are even more exaggerated in the study, relative to the government estimates. For example, EIA indicates about 7 gigawatts of offshore wind “potential” for Florida, which is in relatively deep water and of the lowest quality wind resource. Yet incredibly, the UCS study shows over 40 gigawatts of “potential” offshore wind resource in Florida with no indication regarding depth or wind quality, and claims that 612 megawatts are “feasible.” If offshore wind gets built in the U.S., it is unlikely to be built any further south than Cape Hatteras since the wind quality drops off quite precipitously in the south and decent quality wind is in very deep water. Costs would be prohibitively too high to access these lower quality wind resources and would not make economic sense unless there is a very severe push toward local renewable generating technologies. Further, the UCS study indicates that 14 gigawatts of onshore wind are “feasible,” while EIA analyses show that low quality wind resources in the West would be built before lower quality wind resources in the Southeast—a situation that would require the Southeast to buy credits from other states. Some federal lawmakers from the Southeast are quite worried about this potential wealth transfer from their region to other parts of the U.S.

Solar technology is another area of major discrepancy between the UCS report and official government projections. EIA does not believe that solar will be competitive for wholesale markets through 2030. In EIA’s renewable electricity analyses, solar energy penetration, which is all in end-use markets, reaches 20 gigawatts for the nation due to being awarded a “triple credit” in the proposed bill analyzed, meaning that distributed photovoltaics (PV) is awarded three times the credit price. That is, if renewable credits are trading at 2 cents per kilowatt-hour, end-use PV would be awarded a credit of 6 cents per kilowatt-hour. The UCS study believes that almost 80 gigawatts of solar are “feasible” in the Southeast alone, with a total “potential” of 545 gigawatts. While it is true that there is enough sunshine in the Southeast to serve energy needs several orders of magnitude in excess of expected demand, the economics for solar central station generation are not competitive with other renewable technologies, with its cost being more than three times higher than onshore wind and biomass and 1.5 times higher than offshore wind.[vii]

Finally, the UCS study also has extremely high values for total “potential” capacity for geothermal in the Southeast, at over 1,000 gigawatts, though they admit that the “feasible” capacity is zero. EIA’s analyses of renewable electricity mandates result in less than 10 gigawatts of geothermal capacity nationwide.


Engineering versus Economics

In the section above, we explained the numerous shortcomings in the study’s estimation of renewable potential. But even if we conceded the UCS study’s numbers, just for the sake of argument, it would still not follow that a national renewable electricity mandate is a good idea, or that the Southeastern economy would absorb the blow easily. This is because the UCS study has confused engineering with economics.

At best, all of the tables and citations in the UCS study prove only that it is physically possible for the utilities in Southeastern states to adapt to the renewable percentage mandates under a national renewable mandate. But so what? Just because something is technically feasible, does not make it economically efficient.

For an analogy, suppose that in an effort to reduce carbon emissions, the federal government mandates that 20 percent of every large corporation’s employees must ride bicycles to and from work. Business groups would of course complain that this would put an undue burden on large corporations and many employees would likely quit and seek work elsewhere. It would also impose huge new expenses on municipalities, who would have to completely revamp their roads to accommodate the huge surge in cyclists. Yes, these adaptations would be possible, but nonetheless, the draconian measure would still be incredibly costly. It would make business operations much less efficient and Americans on average would be poorer, because many workers would now be producing less output per day.

We face a similar situation when it comes to electricity generation. Currently, the United States only relies on the politically correct “renewable” technologies to produce 3% of its electricity.[viii] The reason for this isn’t some pro-fossil fuel bias on the part of the utilities; on the contrary, they rely on coal, oil, and natural gas because these are the most economical and dependable sources of power, at least with current technologies.

The marketplace is perfectly capable of fostering innovation. It didn’t take a federal tax on buggies or an annual cap on horse manure to force the U.S. transportation sector to switch over to automobiles in the early 20th century. By the same token, as wind, biomass, and other sources of electricity generation become more competitive with coal, oil and natural gas, then utilities will naturally expand their use. The UCS study had to assume “Extension and expansion of state and federal tax credits for renewable energy and efficiency through 2020” precisely because renewable energy sources can’t survive without government handouts.

An Energy Information Administration (EIA) report[ix] indicates that Federal subsidies for renewable generation for wind and solar in fiscal year 2007 were almost 100 times those for oil and gas-fired generation and over 50 times that of coal-fired generation. For example, EIA data show that solar power was subsidized at $24.34 per megawatt hour and wind power at $23.37 per megawatt hour for electricity generated in 2007. By contrast, traditional coal received 44 cents, natural gas and petroleum received 25 cents, hydroelectric power 67 cents, and nuclear power $1.59 per megawatt hour.[x] For wind power, these subsidies include a production tax credit of 2.0 cents per kilowatt-hour.[xi] However, they do not include accelerated depreciation (a five-year write-off), a favorable accounting treatment that wind developers receive.

As these facts indicate, for the UCS study to point to even the existing level of renewable electricity generation as proof that it “can work” misses the big picture: An operation isn’t efficient if it requires government support against its competition. If the government cut off its preferential treatment for wind and solar, these sources would become an even smaller portion of the current energy mix.

In a small section at its conclusion, the UCS study briefly addresses the economic impacts of a renewable electricity mandate. Yet here the study informs the reader that an additional set of government constraints will help the economy. In its words:

A national Renewable Energy Standard (RES) that reaches a target of 25% by 2025 can play an important role in strengthening our region’s economy. Developing the Southeast’s renewable energy potential will create new economic opportunities and spur demand for a variety of skilled trades and professional careers.

This is quite simply a crude fallacy. There is nothing intrinsic to the argument here about “green” jobs. If this logic is correct, then any government mandate on business—for example, to put polka dot wallpaper up on all their offices—would “create new economic opportunities” and “spur demand.” Yet that analysis can’t possibly be right. It overlooks all of the jobs that would be destroyed by the new mandate. And in the same way, the UCS study is ignoring the jobs that are destroyed by an renewable electricity mandate. It cites studies purporting to show otherwise, but such studies often contain very basic methodological errors.[xii] They can’t disprove the commonsensical insight that the government doesn’t make the economy more efficient by imposing more hoops for businesses to jump through. If it really made economic sense for the solar panel and wind turbine industries to grow and attract new workers, then those industries would do so in a free market.

John Adams once said “Facts are stubborn things; and whatever maybe our wishes, our inclinations, or the dictates of our passion, they cannon alter the state of facts and evidence.” All too often, this important edict gets lost in the public debates on energy and environmental policy. By focusing on the technically “possible” and then claiming that new business regulations would boost the economy, the UCS study ignores the reality that certain and immediate economic harm would come from federal intervention into energy markets. And while some may support such a policy without regard to the costs, they cannot – and should not – be ignored.


References

[i] See “Yes We Can: Southern Solutions for a National Renewable Energy Standard,” available at: http://www.cleanenergy.org/images/stories/serenewables022309rev.pdf.
[ii] For example, see Energy Information Administration, “Impacts of a 15-Percent Renewable Portfolio Standard,” June 2007, www.eia.doe.gov/oiaf/servicerpt/prps/pdf/sroiaf(2007)03.pdf; and Energy Information Administration, “Energy and Economic Impacts of Implementing Both a 25-Percent RPS and a 25-Percent RFS by 2025,” September 2007, http://www.eia.doe.gov/oiaf/servicerpt/eeim/policy.html
[iii] Energy Information Administration, “Regional Generation Impacts of a 15-Percent Renewable Portfolio Standard,” August 2007, http://www.eia.doe.gov/oiaf/servicerpt/prps/regional_generation.html?slide=13
[iv] The UCS study defines a feasible resource as “one that can be developed without compromising an obvious restriction or and under a reasonable (but perhaps aggressive) policy scenario.”
[v] According to the UCS study, “total potential capacity indicates the potential maximum peak output if all resources identified in the study were used to generate power.
[vi] EIA’s Southeast region includes Maryland and West Virginia, which are not in the UCS’s Southesat region.
[vii] Energy Information Administration, “Annual Energy Outlook 2009,” levelized generation costs.
[viii] Energy Information Administration, Monthly Energy Review, Table 7.2a, http://www.eia.doe.gov/emeu/mer/pdf/pages/sec7_5.pdf.
[ix] Energy Information Administration, Federal Financial Interventions and Subsidies in Energy Markets 2007, http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/chap5.pdf, Table 35.
[x] For more information on renewable subsidies, see http://www.instituteforenergyresearch.org/2008/07/30/energy-subsidies-study/.
[xi] Energy Information Administration, Assumptions to the Annual Energy Outlook 2008, page 155, http://www.eia.doe.gov/oiaf/aeo/assumption/pdf/renewable.pdf
[xii] For a critique of several leading “green jobs” proposals, see: “Green Jobs: Fact or Fiction?” at: http://www.instituteforenergyresearch.org/green-jobs-fact-or-fiction/.

From DDT to Dursban (chlorpyrifos)

From DDT to Dursban, by Henry Payne
Planet Gore/NRO, Wednesday, April 15, 2009

Detroit, Mich. — Greens can take a bow: Bedbugs are back with a vengeance.

Responding to the biggest bedbug outbreak since World War II, the Environmental Protection Agency hosted its first-ever “bedbug summit” Tuesday outside Washington to address a widening public outcry. Some of the most vulnerable communities are inner cities like Detroit, and the major culprit, as it turns out, was the summit host.

Nine years ago, the zealots at Bill Clinton’s EPA banned the pesticide chlorpyrifos (to widespread media and environmentalist hosannas), the most commonly available household product in the world to address bedbugs, cockroaches, and other nuisances. Better known by its trade name, Dursban, chlorpyrifos had been available for 30 years in some 800 products in 88 countries around the world.

But despite widespread protest in the scientific community, EPA Chief Carol Browner erased Dursban from the shelves. “EPA has gone to great lengths to present a highly conservative, worst case, hypothetical risk based in large part on dubious extrapolations . . . and exaggerated risk estimates,” said Michigan State University toxicologist J. I. Goodman in a typical response.

Even Dr. Alan Hoberman, the principal researcher whose data Browner cited, told the Detroit News he disputed the agency's interpretation of his findings.

Such critics were also ignored by the press — as was evidence that the nation’s urban poor would be most vulnerable to a ban. Children insect-bite allergies and cockroach-induced allergens outnumber pesticide poisoning by 100:1. “Hardest hit will be lower-income families in cities like Detroit, who can ill afford a weekly house call from the Orkin man,” warned News writer Diane Katz, now with the Fraser Institute. “Yet that is precisely what the EPA is recommending as a substitute for a couple squirts from a can of bug spray.”

Nine years on, Greg Baumann — Senior Scientist at the National Test Management Association — confirms that the Dursban void has been largely unfilled, leaving millions to fight pests with less convenient preventative measures. Extermination, for example, costs between $400 and $900 — out of reach for low-income Detroit families.

And those accountable for this predictable disaster? The very media outlets who were cheerleading the EPA ban now feign ignorance. “Out of concern for the environment and the effects on public health, the EPA has banned many of the chemicals that were most effective in eradicating the bugs in the U.S.,” shrugs the AP in graph ten of its story.

And the EPA Administrator who approved the ban? Browner has been promoted to “climate czar” in the Obama administration.

Costs of a government-run health-care program modeled on Medicare will likely be extraordinary

The Pauper Option, by Jeffrey H. Anderson
Costs of a government-run health-care program modeled on Medicare will likely be extraordinary.
The Weekly Standard, Apr 15, 2009 12:00:00 AM

Democrats frequently claim that government-run health care is more affordable than privately run health care. Too often, Republicans don't challenge this wild assertion. If they don't start doing so, the costs will likely be extraordinary--both to Americans' finances and to their freedom.

Congressional Democrats, with clear presidential support, have recently begun airing sneak-previews of their upcoming summertime health-care blockbuster. It will prominently feature a "public option," which would "compete"--on very uneven terms--with private health insurance. In practice, this "public option" would channel millions of Americans into government-run health care, thereby further contracting--rather than expanding and reinvigorating--the private market and gradually closing off the public's options.

This proposal, the centerpiece of the Democrats' strategy to overhaul the American health-care system, is set to premiere in July (just in time to commemorate our nation's founding). What exactly will it look like? In the words of Tom Daschle, the "public option" will be "a government-run insurance program, modeled after Medicare."

Meanwhile, the New York Times writes that, when it comes to health policy, "The president's main focus is on starting to reduce the soaring cost of health care."

So President Obama's main health-care concern is to control its soaring costs. And his, and Congress's, proposed remedy is to add more government-run health care. High costs are the problem, and a new Medicare-like program the solution. Rarely in the whole history of medicine has there been such a disconnect between the disease and the cure.

Since its launch in 1965, Medicare's costs have soared skyward like an Apollo rocket. But these skyrocketing costs have not generally been made available for public viewing; rather, they have largely been shielded from sight. So before we consider christening another Medicare-like program, let's take a look at Medicare's record.

By 1970, having been in existence for five years, Medicare was well-established. That year, its price-tag was $42 billion. By 2008, Medicare's cost had soared to over $468 billion--an 11-fold, or 1000 percent, increase. Given the effects of inflation, this might not seem too surprising. However, that's Medicare's cost-increase after having already accounted for inflation. So, for every $1 in inflation since 1970, Medicare's costs have risen by $1--and then by another $10. In actual dollars, we now spend $62 on Medicare for every $1 we spent in 1970.

True, more people are now enrolled in Medicare. During the span that Medicare's costs have risen more than 11-fold in real dollars, its beneficiaries have slightly more than doubled. Therefore, Medicare's per-beneficiary costs have more than quintupled--after accounting for inflation.

To be sure, other health-care costs have risen as well, although this hasn't happened in a vacuum. Medicare's artificially low, government-set payment-rates lead to rampant cost-shifting, as doctors and hospitals charge higher rates to private individuals and insurers to try to compensate for the below-market fees they receive from Medicare. A recent study by Milliman Inc, a prominent actuarial consulting firm, estimates that this has raised the cost of private health-care by $88 billion annually. In addition, cumbersome Medicare-mandated administrative tasks shackle private health-care providers with much additional work, which has to be paid for by someone--and it can't be Medicare, whose reimbursement rates are fixed.

Despite this rather significant handicap, privately run health-care has proven to be far, far less expensive than the government-run variety. What Medicare saves in lower reimbursement rates for any given service, it more than makes up for in extraordinarily poor coordination of care and good-old-fashioned bureaucratic waste. The numbers speak for themselves:

Since 1970, our overall national health expenditures (NHE) apart from Medicare and Medicaid have risen 83 percent in relation to the gross domestic product (GDP). Meanwhile, the cost of Medicare has risen 304 percent versus GDP--and that is without even counting the relatively new Medicare prescription drug benefit. The passage of decades hasn't notably improved the government's performance: Since 1990, NHE apart from Medicare and Medicaid has risen 19 percent versus GDP, while the cost of Medicare has risen 57 percent versus GDP.

So, while the costs of American health-care have increased greatly in recent decades, such costs haven't, by any stretch, increased evenly across the board. Since 1970, the cost of all health care in America apart from the two biggest government-run programs has not even doubled versus GDP. Over that same span, Medicare's cost versus GDP has more than quadrupled.

And yet the president and the Democratic Congress want to adopt more Medicare-like programs to cut costs?

Given the way that Medicare's costs have been kept in the dark, even a simple cost-to-cost comparison is illuminating: Since 1970, the cost of Medicare has risen almost two-and-a-half times as much as the cost of all health care in the United States apart from Medicare and Medicaid--the vast majority of which is run by the private sector. Since 1970, Medicare's per-beneficiary costs--even without counting the prescription drug benefit--have risen 50 percent more than our overall per-capita national health expenditures aside from Medicare and Medicaid. They have risen 8 percent more since the year 2000 alone.

But the truly amazing thing is this: Since Medicare's costs continue to rise exponentially, they are just beginning to embark on their spectacular path into orbit. Medicare's costs are projected to rise more in the next decade than they have risen in the previous four decades combined, reaching $1 trillion annually--after which, they are projected to rise still faster. And with the baby boomers retiring, the number of workers per beneficiary will drop within two decades from today's figure of just under four, to merely two and a half. As a result, far fewer and fewer people will bear far higher and higher costs.

Perhaps most dazzlingly of all, the United States now has $55 trillion in projected unfunded federal liabilities over the next 75 years. That's money we've already pledged to spend but which our projected budgets don't cover and which we have no plans for how to raise. Much of that is for Social Security or payments on the national debt--both of which pose massive challenges. But the vast majority of that figure--about $34 trillion of it--is for Medicare. To put $34 trillion into perspective, it's twice the size of the annual economic output (as measured by GDP) of Germany, Japan, Italy, Russia, Canada, France, and the United Kingdom--combined.

That's our future financial liability without adding to Medicare, and without adding another program like Medicare.

One wonders how the President and the Democratic Congress can possibly think that adding a new Medicare-like program is the way to reduce our health-care costs, or to make us more financially solvent as a nation. Perhaps they haven't seen the numbers. Or perhaps the allure of further centralization and consolidation of power in Washington under their control is just too tempting for them to resist.

Either way, Dr. Obama needs to find a new cure for his patient's affliction with soaring costs. If not, the American people should sue him for gross negligence and pursue a different course.

Jeffrey H. Anderson was the senior speechwriter for the U.S. Department of Health and Human Services and is a former Political Science professor at the U.S. Air Force Academy.

Tracking Progress and Security in Post-9/11 Afghanistan

Tracking Progress and Security in Post-9/11 Afghanistan
Brookings, Apr 15, 2009

The Afghanistan Index is a statistical compilation of economic, public opinion and security data. This resource will provide updated and historical information on various data, including crime, infrastructure, casualties, unemployment, Afghan security forces and coalition troop strength.

The index is designed to assemble the best possible quantitative indicators of the international community’s counterinsurgency and nation-building efforts in Afghanistan, to track them over time, and to offer an objective set of criteria for benchmarking performance. It serves as an in-depth, non-partisan assessment of American and international efforts in Afghanistan, and is based primarily on U.S. government, Afghan government and NATO data. Although measurements of progress in any nation-building effort can never be reduced to purely quantitative data, a comprehensive compilation of such information can provide a clearer picture and contribute to a healthier and better informed debate.

Jason H. Campbell and Jeremy Shapiro spearhead the Afghanistan Index project at Brookings, with assistance from Michael O’Hanlon. Jason H. Campbell is a research analyst in Foreign Policy at Brookings. Jeremy Shapiro is a fellow in Foreign Policy and research director of the Center on the United States and Europe. Michael O'Hanlon is a senior fellow in Foreign Policy.

Conservative view: Federal President's New Plan to Decide Where Americans Live and How They Travel

President Obama's New Plan to Decide Where Americans Live and How They Travel. By Ronald D. Utt, Ph.D.
Heritage Backgrounder #2260
April 14, 2009

Title IX: What's good for women's basketball will be good for nuclear physics

A Threat in Title IX, by Christina Hoff Sommers
WaPo, Tuesday, April 14, 2009

What's good for women's basketball will be good for nuclear physics.

To most Americans, that statement will sound odd. To President Obama, it apparently does not. In an October letter to women's advocacy groups, he declared that Title IX, the law that requires universities to give equal funding to men's and women's athletics, had made "an enormous impact on women's opportunities and participation in sports." If pursued with "necessary attention and enforcement," the same law could make "similar, striking advances" for women in science and engineering.

That campaign pledge is hardening into policy, which ought to give people pause. In February, the Congressional Diversity and Innovation Caucusmet with academic deans and women's groups to plan for the new Title IX deployment. Nearly everyone present agreed that closing the gender gap in the laboratory is an urgent "national imperative." What they failed to consider, however, is how enforced parity might affect American science. To get a better idea, let's look at President Obama's statements:

"Title IX has had an enormous impact on women's opportunities and participation in sports." Indeed, Title IX has contributed to significant progress in women's athletics -- but at what cost to male student athletics? Consider the situation at Washington's Howard University. In 2007, the Women's Sports Foundation, a powerful Title IX advocacy group, gave Howard an "F" grade because of its 24-percentage-point "proportionality gap": Howard's student body was 67 percent female, but women constituted only 43 percent of its athletic program. In 2002, Howard cut men's wrestling and baseball and added women's bowling, but that did little to narrow the gap. Unless it sends almost half of its remaining male athletes to the locker room, Howard will remain blacklisted and legally vulnerable. Former Howard wrestling coach Wade Hughes sums upthe problem this way: "The impact of Title IX's proportionality standard has been disastrous because . . . far more males than females are seeking to take part in athletics."

Title IX could make "similar striking advances" for women in science and engineering. Indeed it could -- but at what cost to science? The idea of imposing Title IX on the sciences began gaining momentum around 2002. Then, women were already earning nearly 60 percent of all bachelor's degrees and at least half of the PhDs in the humanities, social sciences, life sciences and education. Meanwhile, men retained majorities in fields such as physics, computer science and engineering. Badly in need of an advocacy cause just as women were beginning to outnumber men on college campuses, well-funded academic women's groups alerted their followers that American science education was "hostile" to women. Soon there were conferences, retreats, summits, a massive "Left Out, Left Behind" letter-writing campaign, dozens of studies and a series of congressional hearings. Their first public victim? Larry Summers, who was forced to resign as president of Harvard University in 2006 after he dared to question the groups' assumptions and drew a correlation between the number of women in the sciences and gender differences implied in math and science test data.

Is it true that women are being excluded from academic science programs because of sexist bias? Some researchers agree that bias is to blame; others, perhaps a majority, suggest that biology and considered preference explain why men and women gravitate to different academic fields. But researchers who dispute the bias explanation played little or no role in the Title IX conferences, summits or congressional hearings.

Title IX must be pursued with "necessary attention and enforcement" in the sciences. This is nearly certain to happen. But the president should note the level of partisanship in the groups monitoring the enforcement. For example, in a 2008 briefing statement, the American Association of University Women, one of the more combative advocacy groups and a leader in the Title IX movement, issued a warning to "adversaries" who get in the way of its equity initiatives:

"Our adversaries know that AAUW is a force to be reckoned with. . . . We are issuing fair warning -- we ARE breaking through barriers. We mean it; we've done it before; and we are 'coming after them' again . . . and again and again, if we have to! All of us, all the time."

Federal officials have conducted occasional equity investigations of engineering and physics programs since 2006. But these have been haphazard and far less results-oriented than what Obama and Congress have in mind. The new Title IX initiative, modeled on athletics, will gratify women's advocacy groups. But will it help American science as much as it helped women's basketball?

Activist leaders of the Title IX campaign are untroubled by this question. Some seem to relish the idea of starkly disrupting what they regard as the excessively male and competitive culture of academic science. American scientific excellence, though, is an invaluable and irreplaceable resource. The fields that will be most affected -- math, engineering, physics and computer science -- are vital to the economy and national defense. Is it wise, to say nothing of urgent, for the president and Congress to impose an untested, undebated gender parity policy at this time?

Christina Hoff Sommers is a resident scholar at the American Enterprise Institute and editor of the forthcoming book "The Science on Women and Science" (AEI Press).

In the Age of Pirates

In the Age of Pirates. By Thomas L Friedman
TNYT, April 14, 2009

Excerpts:

[...]

I’m wondering if President Obama and Secretary of State Hillary Clinton aren’t those students, trying to deal with the leaders of Pakistan, Afghanistan, Iran and North Korea. I say that not to criticize but to sympathize. “Mama, don’t let your children grow up to be diplomats.”

This is not the great age of diplomacy.

A secretary of state can broker deals only when other states or parties are ready or able to make them. In the cold war, an age of great powers, grand bargains and reasonably solid client states, there were ample opportunities for that — whether in arms control with the Soviet Union or peacemaking between our respective client states around the globe. But this is increasingly an age of pirates, failed states, nonstate actors and nation-building — the stuff of snipers, drones and generals, not diplomats.

Hence the déjà vu all over again quality of U.S. foreign policy right now — the sense that when it comes to our major problems (Afghanistan and Pakistan and North Korea and Iran), we just go around and around, buying the same carpets from the same people, over and over, but nothing changes.

“We are dealing with states and leaders who either cannot deliver or will not deliver,” notes the Johns Hopkins University foreign policy professor Michael Mandelbaum. “The issues we have with them look less like problems that can be solved and more like conditions that we have to manage.”

The ones who can’t deliver — the leaders of Afghanistan and Pakistan — are the ones who promise to do all sorts of good things, and pull all sorts of levers, but at the end of the day the levers come off the wall because the governments in these countries have only limited powers. The ones who won’t deliver — Iran and North Korea — time and again tell us: “Yes, we need to talk.” But at the end of the day, their hostile relationships with America or the West are so central to the survival strategy of their regimes, so much at the core of their justifications for remaining in power, that it is not in their interest to deliver real reconciliation, but just to pretend to deliver it.

The only thing that could change this is a greater exercise of U.S. and allied power. In the case of Afghanistan and Pakistan, that power would have to be used to actually rebuild these states from the inside into modern nations. We would literally have to build the institutions — the pulleys and wheels — so that when the leaders of these states pulled a lever something actually happened, and the lever wouldn’t just break off in their hands.

And in the case of the strong states — Iran and North Korea — we would have to generate much more effective leverage from the outside to get them to change their behavior along the lines we seek. In both cases, though, success surely would require a bigger and longer U.S. investment of money and power, not to mention allies.

Instead, I fear that we are adopting a middle-ground strategy — doing just enough to avoid collapse but not enough to solve the problems. If our goal in Afghanistan and Pakistan is nation-building, so they will have self-sustaining moderate governments, we surely don’t have enough troops or resources inside devoted to either. If our goal is changing regime behavior in Iran and North Korea, we surely have not generated enough leverage from outside. North Korea’s defiant missile launch and Iran’s continued development of its nuclear capability testify to that.

So, in sum, we have four problem countries at the heart of U.S. foreign policy today that we don’t have the will or ability to ignore but seem to lack the leverage or the allies to decisively change. The big wild card — a critical mass of people who share our aspirations inside these countries, rising up and leading the fight, which is ultimately what tipped Iraq for the better — I don’t see. As such, I fear we are sliding into commitments in Afghanistan and Pakistan without a real national debate about the ends or the means or the exits. That is a recipe for trouble.

Given all that is on his plate, you cannot blame President Obama for looking for a middle ground — not wanting to abandon progressives and women in Afghanistan and Pakistan, but not wanting to get in too deeply. But history teaches that the middle ground can be a perilous place. Think of Iraq before the surge — not enough to win or lose, but just enough to be stuck.

Libertarian: Federal President's Preschool Emphasis Is Misdirected

President's Preschool Emphasis Is Misdirected. By Andrew J. Coulson
This article appeared on cato.org on April 13, 2009

"When it comes to our children's future," writes president Obama in his first budget, "we cannot waste dollars on methods, programs, and initiatives that are not effective and efficient." He's right, but his budget fails to heed his own dictum.

The president is proposing education policies that are neither the most effective nor the most efficient means of achieving his laudable goals. He plans to expand Head Start and double funding for Early Head Start — federal programs aimed at preschool children. Though the president appears convinced that such programs can save many times what is spent on them, the evidence for that view is weak.

Even economist James Heckman, whose work has influenced President Obama's thinking on the subject, is far more guarded. In 2007, Heckman identified three small preschool programs from the 1960s and 1970s that studies suggest have more than paid for themselves in lower subsequent welfare and criminal justice costs incurred by their participants. But Heckman cautioned that "a much more careful analysis of the effects of scaling up the model programs... has to be undertaken before these estimates can be considered definitive."

His caveat is well justified. The "Perry preschool" study which yielded the highest estimated return enrolled just 123 children. There is good reason to doubt that it can be replicated by the federal government nationwide. A large body of research on other Head Start programs finds that while they sometimes offer short term academic benefits, these generally disappear by the elementary school grades. The largest review of this literature, published by the Department of Health and Human Services, looked at more than 200 studies and concluded that there was no lasting academic advantage to participation in Head Start.

If spending on Head Start and other federal education programs had produced widespread, significant benefits since their inception in the mid 1960s, overall student achievement and graduation rates should have risen over time. The achievement gap between children of high-school dropouts and those of college graduates should have narrowed as well, because most federal education programs are targeted at disadvantaged students. None of these things occurred.

According to the National Assessment of Education Progress, the best available measure of academic trends, U.S. seventeen-year-olds score no better in math or reading today than they did nearly forty years ago. In science they perform slightly worse. The gap between children of dropouts and children of college graduates is unchanged in reading and science, and has decreased by only one percent in math. According to Heckman himself, the high school graduation rate peaked a few years after Head Start was passed and has declined by four or five points since then.

For these disappointing results, the federal government has spent roughly $1.85 trillion dollars on education programs since 1965. So while some small local preschool programs may have generated lasting, significant effects, the federal government cannot be counted on to reproduce those effects on a national scale.

If the president really wants effective, efficient programs, he should look at Florida's scholarship donation tax credit. Under this program, businesses can contribute to non-profit scholarship organizations that subsidize private k-12 tuition for needy families. For each dollar they donate, the businesses owe one fewer dollar in taxes. Last December, Florida's own government accountability office found that this education tax credit saves $1.49 for every dollar it reduces tax revenue. That is three times the largest return on investment for the preschool programs cited by Heckman —and it comes from a policy that is already serving 23,000 students statewide.

Giving at-risk children access to private schooling has been repeatedly shown to improve their educational attainment. Economist Derek Neal has found that Catholic schools raise the graduation rate of urban African Americans by 26 percentage points, and more than double their chances of graduating from college – even after controlling for differences in student background between the sectors. Half a dozen other scientific studies echo Neal's findings. Researchers from the U.S. and abroad also point to higher test scores for students when they attend private rather than public schools, after controlling for student and family background, as I report in a forthcoming global literature review in the Journal of School Choice.

While it would not be constitutional for the president to pursue a national school choice program, he could greatly accelerate the growth and adoption of such programs around the country by throwing his support behind them. He would not be the first Democrat to do so. Florida's scholarship tax credit was expanded last year with the support of one third of the state's Democratic caucus.

Government's Mistakes Have Deepened This Recession

Government's Mistakes Have Deepened This Recession. By Fred L. Smith, Jr.
Letter to the Editor in The Wall Street Journal
CEI, Apr 09, 2009

Steven Gjerstad and Vernon Smith suggest one unexplored aspect of our financial crisis: the role of egalitarian policies. To see this, note their distinction between the impacts of the $10 trillion loss in the 2000 stock market collapse and the $3 trillion loss of the recent housing collapse.

A driving force behind all this has been radical egalitarianism -- the idea that something that can be afforded by some should be made available to everyone. Our universal housing-ownership passion transformed the housing market. Under the egalitarian promotional housing policies of the last few decades (the Democrat's "affordable" housing goals; the Republican's "ownership society" obsession), banks became institutions that would loan you money even if you were unlikely to be able repay it. The moral hazard problems created by our bipartisan egalitarians (the Community Reinvestment Act, the mandates on Fannie Mae and Freddie Mac) enticed far too many Americans into purchasing homes priced beyond their means. There is a critical distinction between the democratizing tendency of the market and the coercive egalitarian policies of politics.

Many factors contributed to our financial crisis but as Messrs. Gjerstad and Smith suggest, we should add radical egalitarian policies to the list. As they note, these programs transformed the American Dream into the American Nightmare.

Fred L. Smith Jr. President Competitive Enterprise Institute Washington

Getting Real: The Oil Majors Move Away from Political Energy (Government-dependent wind, solar are not ready for prime time)

Getting Real: The Oil Majors Move Away from Political Energy (Government-dependent wind, solar are not ready for prime time). By Robert Bradley
Master Resource, April 9, 2009

A recent article in the New York Times, “Not So Green After All: Alternative Fuel Still a Dalliance for Oil Giants,” chronicled the move away from politically correct (but economically incorrect) wind and solar energy by the oil majors.

Royal Dutch Shell and BP, in particular, recognize wind and solar as what they are: dilute, intermittent energies that are not consumer friendly or economic. And their investment returns in the same have been lackluster. Shell and BP have found out what Exxon Mobil learned in the 1970s.

“Oil giants worldwide are skeptical that President Barack Obama’s plans to move the economy away from petroleum will be successful,” Jad Mouawad wrote in the Times. “Many of the oil companies are sticking to their hydrocarbon business model and some are backing away from commitments to renewable power.”

Mouawad summarizes the thinking from these three majors:

Royal Dutch Shell last month said it would freeze research in wind, hydrogen and solar power to devote all its renewable energy efforts to biofuels. The company had already sold much of its solar business and last year pulled out of a project to build the largest offshore wind farm near London.

BP has been trimming its renewables program, and U.S. oil companies, which have traditionally been more lukewarm to renewables than their European peers, are not budging either.

“In my view, nothing has really changed,” Rex W. Tillerson, the chief executive of Exxon Mobil, said after the election of President Obama. “We don’t oppose alternative energy sources and the development of those. But to hang the future of the country’s energy on those alternatives alone belies [the] reality of their size and scale.”

Indeed, the article goes on to note, the majors are focused on frontier hydrocarbons, such as tar sands and natural gas from shale. Such emphasis will warm the hearts of those who favor free-market capitalism over political capitalism.


Core Competency: “We Don’t Do it All”

The pullback from wind and solar is back-to-the-basics. As Shell’s CEO Jeroen van der Veer stated, “We don’t do it all.” Whatever the advantage of investing in wind and solar for public relations reasons, in the current economic climate such PR is no longer affordable. Perhaps these companies are also asking whether technologies that are forever dependent on government policy are really sustainable.

There is also the problem of scale, which Daniel Yergin spoke to in the Times article mentioned above. It is the same point that the former CEO ExxonMobil, Lee Raymond made so well back in 2004:

One of the difficulties people have, even some who work in this business, is understanding the scale and size of the energy industry. This is important to understand in order to put in perspective what some of the alternatives are and to judge if they are significant in the context of the whole.

There are many alternative forms of energy that people talk about that may be interesting. But they are not consequential on the scale that will be needed, and they may never have a significant impact on the energy balance. To the extent that people focus too much on that—for example, on solar or wind, even though they are not economic—what they are doing is diverting attention from the real issues.

And 25 years from now, even with double-digit growth rates, they will still be less than 1 percent of the energy supplied to meet worldwide demand. I am more interested in staying focused on the 99 percent than the 1 percent.


Wind and Solar: Failed Expectations

Wind and solar in almost all applications are a bust. Not even very generous government tax incentives (production tax credit, accelerated depreciation) have worked. As Texas proves, mandatory renewable-energy quotas are required. In 1999, that state enacted the Enron provision of an electricity restructuring bill that made Texas the nation’s leader in new windpower capacity and production. (Enron Wind Corporation, now part of General Electric, was the intended beneficiary of the deal made by Enron’s Ken Lay and then-governor George W. Bush.)

Consider the long history of failed competitiveness of wind and solar as shown by these quotations.

Worldwatch Institute in 1984:

“Tax credits have been essential to the economic viability of wind farms so far, but will not be needed within a few years.”[1]

American Wind Energy Association in 1986:

“The U.S. wind industry has … demonstrated reliability and performance levels that make them very competitive. It has come to the point that the California Energy Commission has predicted windpower will be that State’s lowest cost source of energy in the 1990s, beating out even large-scale hydro.“[2]

Barry Commoner in 1976:

“Mixed solar/conventional installations could become the most economical alternative in most parts of the United States within the next few years.”[3]

Solar Energy Industries Association in 1987:

“I think frankly, the—the consensus as far as I can see is after the year 2000, somewhere between 10 and 20 percent of our energy could come from solar technologies, quite easily.”[4]

Worldwatch Institute in 1987:

“In future decades, [photovoltaic technologies] may become standard equipment on new buildings, using the sunlight streaming through windows to generate electricity.”[5]

Lee Raymond, a rare energy realist in political times, was right.


References

[1] Statement of Michael L.S. Bergey, American Wind Energy Association in Renewable Energy Industries, Hearing before the Subcommittee on Energy Conservation and Power of the Committee on Energy and Commerce, House of Representatives, 99th Cong., 2nd sess. (Washington, D.C.: Government Printing Office, 1986), p. 129.
[2] Christopher Flavin, “Electricity’s Future: The Shift to Efficiency and Small-Scale Power,” Worldwatch Paper 61, Worldwatch Institute, November 1984, p. 35.
[3] Barry Commoner, The Poverty of Power (New York: Alfred A. Knopf, 1976), p. 151.
[4] Scott Sklar, Solar Energy Industries Association. Quoted in Solar Power, Hearing before the Subcommittee on Energy and Power of the Committee on Energy and Commerce, House of Representatives, 100th Cong., 1st sess. (Washington, D.C.: Government Printing Office, 1987), p. 12.
[5] Cynthia Shea, “Renewable Energy: Today’s Contribution, Tomorrow’s Promise,” Worldwatch Paper 81, Worldwatch Institute, January 1988, p. 44.

WaPo Editorial: A Solution for Somalia

A Solution for Somalia. WaPo Editorial
What it will take to stop the threats of piracy and terrorism
WaPo, Tuesday, April 14, 2009; Page A16

SKILLFUL SHOOTING by U.S. snipers rescued an American ship captain from Somali pirates Sunday -- along with an Obama administration facing its first foreign emergency. Unfortunately, no silver bullets are available for the growing threat of piracy in the Indian Ocean or the toxic anarchy that has spawned it.

President Obama said in a statement Sunday that "we must continue to work with our partners to prevent future attacks, be prepared to interdict acts of piracy and ensure that those who commit acts of piracy are held accountable for those crimes." Those actions are certainly necessary, and they speak for themselves. But they don't begin to address the underlying problem, which is Somalia's long-standing status as a failed state and the desperation and extremism growing among its Muslim population.

Since the Clinton administration abandoned a U.N. mission in Somalia 15 years ago, the United States has tried ignoring the chaos there, using proxies to subdue it and targeting its worst elements with airstrikes. An international naval task force has been cruising along the coast for months to deter piracy. All along, the country's misery and the threat it poses to the United States and other Western countries have steadily worsened. It's not just the pirates, who have staged at least 66 assaults so far this year and hold more than a dozen ships and 200 foreign crew members hostage. As senior U.S. officials have repeatedly acknowledged, a radical Islamist militia that controls much of Somalia has ties to al-Qaeda, which has used its Somali base to stage attacks on U.S. and Israeli targets in Africa and is believed to be training foreign militants -- including some Somali Americans -- for future operations.

Again and again, mostly for political reasons, U.S. administrations have refused to absorb the lessons Somalia teaches, in tandem with pre-2001 Afghanistan and the tribal territories of present-day Pakistan. Those lessons are that stateless territories, particularly in the Muslim world, can pose a significant threat to U.S. interests and even homeland security, and that the danger can be adequately addressed only by helping a state authority emerge to fill the vacuum.
Last week's crisis offers the Obama administration an opportunity to avoid perpetuating past errors. No, we aren't advocating another massive U.N. intervention in the country backed by U.S. troops. As the Bush administration discovered late last year, there is no appetite among America's European or African allies for such an operation. But what would be possible is a concerted push to strengthen the most recent attempt at a Somali government -- a not-unpromising coalition between moderate Islamists and various clan-based factions. The government needs massive economic aid, training and equipment for an army and coast guard, and help in brokering political deals.

A coordinated international effort to build up a Somali government and security forces would cost many billions of dollars and take many years to pay off. It would consume U.S. diplomatic capital and be domestically controversial -- like the nation-building missions underway, at last, in Afghanistan and Pakistan. It is also the only way to end the threats of piracy and terrorism from the Horn of Africa.

WaPo's Eugene Robinson on being duped by Fidel

Addled by Fidel, by Eugene Robinson
WaPo, Tuesday, April 14, 2009; A17

The Congressional Black Caucus delegation that visited Havana last week was naive not to notice -- or disingenuous not to acknowledge -- that Cuba is hardly the paradise of racial harmony and equality it pretends to be. Still, that's no reason for the United States to continue the illogical, ineffective, hard-line policies that have produced an unbroken 47-year record of failure.

President Obama's action yesterday -- he eased some restrictions on travel, gifts and remittances, but only for Cuban Americans -- is barely a start. He should go so far as to actually base our Cuba policy on reality. After all, we've tried everything else.

Those who argue for keeping in place the trade embargo and what remains of the travel restrictions -- and even predict that these measures, imposed at a time when the Cold War was getting chillier, will bring the Castro government to its knees any day now -- have been drinking too many mojitos. Claims that the United States would somehow surrender valuable "leverage" by lifting the sanctions are purest fantasy.

People, we have no leverage in Cuba. If we had any, we'd have managed to move the Cuban government an inch or two toward democratic reform in the past five decades.

What we should do is lift the embargo, which Obama hasn't meaningfully disturbed, and end the travel ban for everyone. That would put the onus on the Cubans to somehow keep hordes of American capitalists and tourists from infecting the island with dangerous, counterrevolutionary ideas. But we should take these steps with our eyes open, seeing Cuba as it is, not as we might want it to be.

By now it should be dawning on the seven U.S. legislators who got the red-carpet tour last week -- including six members of the Black Caucus -- that first impressions can be unreliable. Three members of the delegation were granted a rare audience with the ailing Fidel Castro. "He looked directly into my eyes," said Rep. Laura Richardson (D-Calif.), "and then he asked: 'How can we help President Obama?' [Fidel Castro] really wants President Obama to succeed."

No, he really doesn't. As it happened, Castro quickly demonstrated that he didn't even wish the delegation well, let alone the current occupant of the White House. After the meeting, Castro issued a statement claiming that one of his visitors had said the United States should "apologize" to Cuba and that another had said U.S. society is still "racist." Members of the delegation denied that any such exchanges had taken place -- and I believe them.

It is in Castro's interest to sabotage any genuine movement in Washington toward normalized relations, because a lessening of tension would destroy the government's stated rationale for denying Cubans basic political freedoms: that any opening would be exploited by the imperialist enemy to the north. It is also in Castro's interest to portray the United States as irredeemably racist -- unlike Cuba under the tutelage of the revolution.

In 10 reporting trips to the island, I have met Afro-Cubans who told me with conviction that they have had opportunities under the Castro regime -- especially in health and education -- that would have been unimaginable before the revolution. But I've also heard bitter complaints about deep-seated racism that many black Cubans believe is getting worse.

Race is a touchy subject in Cuba, and for many years it went all but unmentioned. Raúl Castro, who knows the island and its people as well as his older brother does, caused a stir in 2000 when he said that if a hotel were to deny entry to a person because he or she is black, that hotel should be shut down -- an acknowledgment that such things happen. Popular rappers in Cuba's hip-hop underground have made racial grievance a major theme of their daring lyrics. I once interviewed a Cuban scholar whose husband, an officer in the military, pooh-poohed her research into racial discrimination -- until he had the experience of being detained and harassed by police for no apparent reason other than his dark skin.

Even without meeting with any of the well-known black dissidents on the island, the visitors from Washington could have observed that the workforce in Cuba's burgeoning tourism industry -- arguably the most privileged class, since waiters and cab drivers receive tips in hard currency, which allows them a standard of living far beyond what is possible with Cuban pesos and government rations -- is disproportionately white.

Members of the Black Caucus are, quite properly, quick to notice such insults and disparities at home. Maybe they were too busy looking into Fidel's eyes.

A competitive marketplace would produce the most innovative medical-records system

A Health Tech Monopoly – II. WSJ Editorial
A competitive marketplace would produce the most innovative medical-records system.
WSJ, Apr 14, 2009

The New England Journal of Medicine is the holy scripture of the medical academic left, so it's worth noting that the magazine has just punched a hole in the many blandishments about electronic medical records.

Recall that the recent stimulus devotes $19 billion to encourage doctors and hospitals to adopt digital recordkeeping in lieu of the paper systems prevalent today -- and penalizes them beyond 2015 if they don't. While the New England Journal grants that more and better clinical information could yield modest benefits, it is also clearly perturbed with the government's new role as the arbiter of health information technology.

In a "perspective" akin to an editorial, Kenneth Mandl and Isaac Kohane, both health-tech specialists at Children's Hospital Boston and Harvard Medical School, write that "flexibility is critical" as Congress promotes electronic medical records. The ideal system would be an open platform for many developers to write applications that are allowed to succeed and fail, much like Apple's iPhone software. They argue that the key is "allowing competition and 'natural selection' for high-value, low-cost products. This approach contrasts sharply with design of a national system by committee."

Drs. Mandl and Kohane's critique is couched in the staid language of a peer-reviewed journal, but the implications are obvious. The stimulus hands the Obama Administration the power to define and approve "certified" records, therefore the power to create a health-tech monopoly. With stimulus money being shoveled out as quickly as possible, doctors and hospitals may end up prematurely investing in the costly systems that happen to have the government seal of approval -- and in the process freezing out an innovative marketplace.

What Iran Really Thinks About Talks - It's a game of diplomacy without sincerity

What Iran Really Thinks About Talks. By Michael Rubin
It's a game of diplomacy without sincerity.
Apr 12, 2009

On Apr. 9, Gholam Reza Aghazadeh, the head of Iran's atomic energy agency, announced that the Islamic Republic had installed 7,000 centrifuges in its Natanz uranium enrichment facility. The announcement came one day after the U.S. State Department announced it would engage Iran directly in multilateral nuclear talks.

Proponents of engagement with Tehran say dialogue provides the only way forward. Iran's progress over the past eight years, they say, is a testament to the failure of Bush administration strategy. President Barack Obama, for example, in his Mar. 21 address to the Iranian government and people, declared that diplomacy "will not be advanced by threats. We seek engagement that is honest and grounded in mutual respect."

Thus our president fulfills a pattern in which new administrations place blame for the failure of diplomacy on predecessors rather than on adversaries. The Islamic Republic is not a passive actor, however. Quite the opposite: While President Obama plays checkers, Supreme Leader Ayatollah Ali Khamenei plays chess. The enrichment milestone is a testament both to Tehran's pro-active strategy and to Washington's refusal to recognize it.

Iran's nuclear program dates back to 1989, when the Russian government agreed to complete the reactor at Bushehr. It was a year of optimism in the West: The Iran-Iraq War ended the summer before and, with the death of revolutionary leader Ayatollah Khomeini, leadership passed to Ayatollah Khamenei and President Ali Akbar Hashemi Rafsanjani, both considered moderates.

At the beginning of the year, George H.W. Bush offered an olive branch to Tehran, declaring in his inaugural address, "Good will begets good will. Good faith can be a spiral that endlessly moves on." The mood grew more euphoric in Europe. In 1992, the German government, ever eager for new business opportunities and arguing that trade could moderate the Islamic Republic, launched its own engagement initiative.

It didn't work. While U.S. and European policy makers draw distinctions between reformers and hard-liners in the Islamic Republic, the difference between the two is style, not substance. Both remain committed to Iran's nuclear program. Former Iranian President Mohammad Khatami, for example, called for a Dialogue of Civilizations. The European Union (EU) took the bait and, between 2000 and 2005, nearly tripled trade with Iran.

It was a ruse. Iranian officials were as insincere as European diplomats were greedy, gullible or both. Iranian officials now acknowledge that Tehran invested the benefits reaped into its nuclear program.

On June 14, 2008, for example, Abdollah Ramezanzadeh, Mr. Khatami's spokesman, debated advisers to current Iranian President Mahmoud Ahmadinejad at the University of Gila in northern Iran. Mr. Ramezanzadeh criticized Mr. Ahmadinejad for his defiant rhetoric, and counseled him to accept the Khatami approach: "We should prove to the entire world that we want power plants for electricity. Afterwards, we can proceed with other activities," Mr. Ramezanzadeh said. The purpose of dialogue, he argued further, was not to compromise, but to build confidence and avoid sanctions. "We had an overt policy, which was one of negotiation and confidence building, and a covert policy, which was continuation of the activities," he said.

The strategy was successful. While today U.S. and European officials laud Mr. Khatami as a peacemaker, it was on his watch that Iran built and operated covertly its Natanz nuclear enrichment plant and, at least until 2003, a nuclear weapons program as well.

Iran's responsiveness to diplomacy is a mirage. After two years of talks following exposure of its Natanz facility, Tehran finally acquiesced to a temporary enrichment suspension, a move which Secretary of State Colin Powell called "a little bit of progress," and the EU hailed.

But, just last Sunday, Hassan Rowhani, Iran's chief nuclear negotiator at the time, acknowledged his government's insincerity. The Iranian leadership agreed to suspension, he explained in an interview with the government-run news Web site, Aftab News, "to counter global consensus against Iran," adding, "We did not accept suspension in construction of centrifuges and continued the effort. . . . We needed a greater number." What diplomats considered progress, Iranian engineers understood to be an opportunity to expand their program.

In his March 24 press conference, Mr. Obama said, "I'm a big believer in persistence." Making the same mistake repeatedly, however, is neither wise nor realism; it is arrogant, naïve and dangerous.

When Mr. Obama declared on April 5 that "All countries can access peaceful nuclear energy," the state-run daily newspaper Resalat responded with a front page headline, "The United States capitulates to the nuclear goals of Iran." With Washington embracing dialogue without accountability and Tehran embracing diplomacy without sincerity, it appears the Iranian government is right.

Mr. Rubin is a resident scholar at the American Enterprise Institute.

What the Fed is doing to help end the economic crisis

The Fed's Balance Sheet. WaPo Editorial
What the agency is doing to help end the economic crisis
WaPo, Monday, April 13, 2009; A14

IN NOVEMBER 2005, BusinessWeek published a story that began, "Welcome to the era of the diminished Fed." It predicted that incoming Federal Reserve Chairman Ben S. Bernanke would avoid the activist models of his predecessors and turn to a more predictable rules-based system that he called "constrained discretion." Now, a few years later, the Fed is in uncharted territory in an effort to save the economy, and "quantitative easing" has handily trumped constrained discretion. The central bank has massively expanded its balance sheet by more than a trillion dollars, with more to come, and simultaneously increased the types of activities in which it engages, making the notion of a central bank that focuses merely on adjusting interest rates seem positively quaint.

The new activities focus on providing credit to help financial institutions, making direct loans and, recently, purchasing long-term assets, such as Fannie Mae debt. As a result, the U.S. central bank is now the proud overseer of the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), which helps money market mutual funds meet their obligations; the Commercial Paper Funding Facility (CPFF), which lends directly to market participants; and the Term Asset-Backed Securities Loan Facility (TALF), which makes direct loans in an effort to fix the securitization markets and provides liquidity swap lines to a host of central banks around the world -- not to mention TAF, TSLF, PDCF, and MMIFF. It's enough to make even the most avid Fed watcher's head spin. While Mr. Bernanke has made efforts to increase transparency -- ranging from the helpful expansion of Fed Web sites to granting an unusual interview on "60 Minutes" that was downright folksy -- the effectiveness of these policies is virtually impossible to assess.

That the Fed has entered into so many new areas is in part a reflection of Congress's unwillingness to do so. Reeling from the political sting of the Troubled Assets Relief Program bank bailout and bonuses, politicians have been thus far unwilling to provide more funds to help stabilize the financial sector. This has pushed the Fed to shift from broad, macroeconomic manipulation to specific intervention in targeted areas and institutions. These activities may well turn out to be the winch that pulls the economy out of the credit and financial market meltdown, though no one can say for sure, and the midst of a crisis is not the time for handing out final grades. We do know that traditional Fed rate reductions, which left the federal funds rate hovering near zero, were not enough to jump-start the economy and that something else had to be done.

The real challenge will be "unwinding" all of these activities. If the Fed fails to turn off these new policies quickly enough, they could be highly inflationary, but shedding the assets it has purchased could tangle up markets tremendously. The president of the Federal Reserve Bank of Philadelphia has warned that there could be significant political pressure to keep many of the programs in place, particularly since the economy may still feel weak when it is time to start contracting the Fed's bloated balance sheet. Creating all these new programs was a heavy lift; getting rid of them may be even harder.

Can Renewable Technologies Provide U.S. Electricity Needs?

Can Renewable Technologies Provide U.S. Electricity Needs? (Only hypothetically, using unrealistic assumptions). By Mary Hutzler
Master Resource, April 7, 2009

Several reports (see here and here) and certain websites (here) allege that renewable technologies can meet our growing electricity needs and also meet stringent reduction targets for carbon dioxide. For example, Climate Progress, a website populated by Joseph Romm, an assistant secretary of energy during the Clinton administration, indicates that the answer to our growing electricity needs will come from energy efficiency (including cogeneration), wind power, concentrated solar power (CSP), and biomass co-firing, which taken together will meet a projected 1 percent annual growth rate in demand while also reducing carbon emissions.

These reports are in sharp contrast to forecasts produced by the Energy Information Administration (EIA), an independent agency of the U.S. Department of Energy. EIA’s most recent Annual Energy Outlook (AEO) indicates the U.S. generating sector will be dominated by coal and natural gas-fired technologies, representing two-thirds of our electricity generation through 2030, followed by generation from nuclear power, contributing almost another 20 percent. Only 14 percent of total generation would come from renewable sources, including hydropower, by 2030, up from 8 percent in 2007. The EIA forecasts include the efficiency and renewable technologies cited by Romm, plus others; but they do not include major policy and regulatory changes.


Efficiency

What gives rise to the differences between these projections? First, Romm assumes (based on California’s experience) that efficiency improvements can reduce the increase in electricity demand to near zero through 2020. Romm states: “If every American had the per capita electricity of California, we’d cut electricity use some 40%.” Many of California’s efficiency improvements were the normal types of strategies: better insulation; energy-efficient lighting, heating, and cooling; and so forth. And these are also incorporated in EIA’s demand forecast for electricity. Nevertheless, the EIA, after incorporating efficiency improvements, expects electricity generation to grow at 0.9 percent per year through 2030.

According to Romm, however, California also instituted a regulatory concept called electricity decoupling. Under this arrangement, utility company profits are not closely tied to how much electricity they sell; rather, the utilities are allowed to take a share of any energy savings they help consumers and businesses achieve. The bottom line is that California utilities can make money even when their customers use less electricity. Or, to put it in other words: California electric-utility companies can charge for electricity not used. While that may benefit the utility company, it distorts normal economic price signals. For example, with the addition of a pro-rated conservation charge, a consumer who has invested in energy efficiency could be faced with higher electricity bills than a consumer who has not conserved and who uses more electricity. This arrangement distorts the consumers’ benefits from traditional conservation measures, such as lowering their heating temperatures and/or raising their cooling temperatures. (For more on decoupling, see here.)

Perhaps decoupling may work in California where weather is milder than in many other states, housing is more geared to apartments and smaller homes due to high residential property values, and where many manufacturing firms have departed owing to high energy prices. But, decoupling could add hardship for Americans living in cold-weather states that heat with electricity and for Americans living in warm-weather states that need electricity to cool homes. Indeed, if consumers can’t afford to heat and/or cool their home adequately, they may be confronted with illness or death. Decoupling could also cause more manufacturing firms to leave the country as energy prices increase, making their ability to compete at home more challenging.


Combined Heat and Power

In addition, Romm favors combined heat and power, a technology that is incorporated in the modeling used by California to analyze compliance with its climate-change legislation, A.B. 32, which requires statewide greenhouse gas emissions to reach 1990 levels by 2020. That forecast has 4.4 gigawatts of combined heat and power constructed in California by 2020. In comparison, EIA’s forecast (see Table A9) has 0.7 gigawatts of combined heat and power constructed in the entire United States by 2020.


Wind Power

Romm next promotes wind power as a technology that has been growing at a staggering pace, with over 8 gigawatts constructed in 2008 alone. That statistic is true, and Romm correctly reports wind power as an intermittent technology. However, Romm cites a Department of Energy study that calls for 20 percent of U.S. power to be generated by wind by 2030. To reach that level, almost 300 gigawatts of new wind power (new, that is, beyond 2008 levels) must be constructed. EIA’s forecast (see Table A16) has about 20 gigawatts of new wind power constructed by 2030. A comparison of Romm’s cost assumptions for wind compared with those of EIA show Romm’s costs slightly lower by about 0.7 cents per kilowatt-hour (kWh) or 8 percent lower when subsidies and transmission are taken into account. (Specifically, EIA’s wind costs are 9 to 11.5 cents/kWh unsubsidized, while Romm’s are 7.5 to 10 cents/ kWh, unsubsidized and excluding transmission. EIA includes some transmission at 0.8–0.9 cents/ kWh. On the same basis, the comparison is 8.2 to 10.7 cents/ kWh for EIA, compared with 7.5 to 10 cents/ kWh for Romm.)


Solar Power

Concentrated solar power is another technology that Romm is encouraging. He cites a report by Environment America entitled “Solar Thermal Power and the Fight against Global Warming,” which indicates that the United States could build 80 gigawatts by 2030. EIA’s forecast has 0.33 gigawatts of solar thermal built by 2030, most likely all demonstration projects. A comparison between Romm and EIA regarding the costs of this technology shows vast differences. Romm cites contract costs in the Southwest and assumptions from California’s A.B. 32 study. Compared to EIA’s cost assumptions for solar thermal, Romm’s costs are 5 to 10 cents per kilowatt-hour lower or 30 to 40 percent lower. (Romm states that solar thermal is being contracted at 14 to 15 cents/ kWh in the southwest and that the California Public Utilities Commission assumes a cost for solar thermal at 12.7–13.6 cents/ kWh—including 6 hours of storage capacity—with the possibility of its dropping 20% by 2020, according to its A.B. 32 report. EIA’s subsidized price with transmission is 18.5–23.7 cents/ kWh. Transmission accounts for 1 to 1.1 cents/ kWh.)


Biomass Co-firing

Romm also touts biomass co-firing as “probably the cheapest, easiest, and fastest way to provide new renewable base-load power without having to build any new transmission lines.” Biomass co-firing is the use of biomass fuels along with coal in existing coal-fired generators. Romm and EIA both agree that up to 15 percent of the fuel used in a coal-fired generator can be biomass. They quote a cost range of $100 to $700 per kilowatt for adapting existing coal-fired technology to use biomass. But Romm adopts a median cost of $180 per kilowatt, while EIA sees the cost as dependent on the size of the host plant and the co-firing increment installed. Both recognize that the feedstocks need to be residues within a radius of about 50 miles around the plant since transportation costs limit the range. Dedicated feedstocks are more expensive than residues (e.g., construction and demolition wood, pallets, sawdust shavings from secondary wood processing). But both forecasters assume fairly similar feedstock costs.

Romm’s estimate of additional biomass co-fired capacity is 8 to 12 gigawatts by 2010, or 2 to 4 percent of total coal-fired capacity expected in that year, and 26 gigawatts by 2020, 8 percent of coal-fired capacity. EIA sees a possible 0.7 percent of coal-fired generation by 2010. By 2025, EIA’s reference case sees biomass co-generation peaking at 4.6 percent of coal-fired generation, dropping to 3.3 percent in 2030, as biomass gasification combined-cycle technology is built and competes with co-firing for lower cost feedstock. EIA’s forecast has 6.5 gigawatts of biomass gasification combined-cycle built by 2030.


Conclusion

Many of Romm’s technologies have been around for years, without much penetration. The EIA, which assumes existing policies and regulations, forecasts only small amounts of future penetration, with total renewable technologies, including hydropower, representing only 14 percent of the electricity mix in 2030.

So, how does Romm expect to meet these efficiency and renewable targets? Obviously, he expects major policy changes. But these policy changes will cost the American public higher electricity rates. How much higher depends on the policy, the location of the consumers, and their usage.

Without those policy changes, EIA is forecasting that electricity prices will increase at a rate of 0.6 percent per year in real terms through 2030, and 2.2 percent a year in nominal terms. How much more will Romm’s strategy cost? And will there be enough base-load power to supply the needs of future generations if current legislative and legal battles continue to restrict supply of coal-fired and nuclear-generated electricity? These questions are hard ones for the proponents of energy transformation via government intervention.

Pew Center Realism Towards ‘Kyoto II’

Pew Center Realism Towards ‘Kyoto II’: Game, Set, Match Adaptation? By Robert Bradley
Master Resource, April 8, 2009

‘Climate and Agriculture: We’re Not Dumb’ Follow-Up

‘Climate and Agriculture: We’re Not Dumb’ Follow-Up. By Chip Knappenberger
Master Resource, April 11, 2009

The Pirates Challenge Obama's Pre-9/11 Mentality - Distinctions between lawful and unlawful combatants go back to Roman times

The Pirates Challenge Obama's Pre-9/11 Mentality. By Mackubin Thomas Owens
Distinctions between lawful and unlawful combatants go back to Roman times.
WSJ, Apr 11, 2009

When Somali pirates hijacked the U.S.-flagged Maersk Alabama this week and took 20 Americans hostage, President Barack Obama refused to comment. It seems that our new president is desperate to do everything he can to distance himself from his predecessor, which is why his team has launched a campaign to rebrand the War on Terror. The results are mystifying. "Overseas contingency operations" is the new name for the war, while "man-caused disasters" is a euphemism for terrorist attacks.

In this new rhetorical regime, the administration criticizes President George W. Bush for his "illegal" policies with respect to the detention center at Guantanamo Bay, and claims that the treatment of the detainees themselves constitutes "torture."

But while they've certainly made cosmetic changes, many claim the Obama administration has left the substance of Bush's approach intact.

Attorney General Eric Holder added to this perception when, after visiting Guantanamo, he acknowledged that the facility is very well run and that implementing Mr. Obama's promise to close it down will be difficult. While renouncing the term "enemy combatant," the Obama administration acknowledges the reality that no matter what we call those detained at Guantanamo, the detainees are still not entitled to prisoner-of-war status because they have violated the laws of war by killing civilians and fighting out of uniform. Instead of calling the detainees enemy combatants, the administration has opted to refer to them as "individuals captured in connection with armed conflicts and counterterrorism operations," or "members of enemy forces," or "persons who [the president] determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, and persons who harbored those responsible for the September 11 attacks."

Though these changes might seem superficial, unfortunately, they represent a substantive shift. They signal a return to the policy mindset that existed before 9/11, and the consequence will be material harm to U.S. security.

First, in holding that the president's power to indefinitely detain without legal charges is derived from Congress's authorization for the Use of Military Force Act (passed in the aftermath of 9/11), the Justice Department has undercut the president's own war power under the Constitution. This is an inherent executive power that has been recognized since at least the presidency of Abraham Lincoln.

As Lincoln wrote to James Conkling in August 1863, "I think the Constitution invests its commander-in-chief, with the law of war, in time of war." In addition to the commander-in-chief clause of Article II, Lincoln found his war power in his presidential oath "to preserve, protect, and defend the Constitution of the United States."

Second, the various new substitutes for "unlawful enemy combatant" abolish an important distinction in traditional international law. As the eminent military historian Sir Michael Howard argued shortly after 9/11, the status of al Qaeda terrorists is to be found in a distinction first made by the Romans and subsequently incorporated into international law by way of medieval and early modern European jurisprudence. According to Mr. Howard, the Romans distinguished between bellum (war against legitimus hostis, a legitimate enemy) and guerra (war against latrunculi, pirates, robbers, brigands and outlaws).

Bellum became the standard for interstate conflict, and it is here that the Geneva Conventions were meant to apply. They do not apply to guerra. Indeed, punishment for latrunculi, "the common enemies of mankind," traditionally has been summary execution.

Though they don't often employ the term, many legal experts agree that al Qaeda fighters are latrunculi -- hardly distinguishable by their actions from pirates and the like. Robert Kogod Goldman, an American University law professor has commented: "I think under any standard, the captured al Qaeda fighters simply do not meet the minimum standards set out to be considered prisoners of war." And according to Marc Cogen, a professor of international law at Ghent University in Belgium, "no 'terrorist organization' thus far has been deemed a combatant under the laws of armed conflict." Thus al Qaeda members "can be punished for all hostile acts, including the killing of soldiers, because they have no right to participate directly in hostilities." But the Obama administration is about to extend legal rights -- intended to protect civilians -- to the very latrunculi who want to blow them up by considering the possibility of trying them in U.S. courts. Indeed, Attorney General Holder did not rule out trying the Somali pirates.

Some in Congress want to go further than the Obama team. Rather than focusing their attention on the terrorists, these politicians wish to criminalize the behavior of Bush administration officials for actions they took to protect Americans, and that fell well short of those taken by Lincoln in suppressing the Rebellion of 1861. Thus Sen. Patrick Leahy (D., Vt.), aided and abetted by my own Sen. Sheldon Whitehouse (D., R.I), have begun hearings on Mr. Leahy's proposal for a "Truth Commission" to investigate the Bush administration's interrogation policies.

The mantra of Bush critics has been that the previous administration "tortured" detainees. But this is nonsense. At issue is the CIA's waterboarding of three high-ranking latrunculi who had been instrumental in planning and executing attacks that killed thousands of Americans. These individuals had been trained to resist conventional interrogation methods and were thought to have information about impending attacks.

What makes the Leahy-Whitehouse show trials most appalling -- and hypocritical -- is that Congress was briefed on the enhanced interrogation methods in September 2002. At the time, according to the Washington Post, members of Congress from both parties -- including current Speaker of the House Nancy Pelosi -- wanted to ensure that the interrogations were tough enough to get the necessary intelligence from the captured terrorists. As the Post reported, "there was no objecting, no hand-wringing," and according to a U.S. official present during the briefings, "the attitude was, 'We don't care what you do to those guys as long as you get the information you need to protect the American people.'" But of course, according to a source looking back on that period, "the environment was different then because we were closer to Sept. 11 and people were still in a panic."

And therein lies the problem. Too many of our leaders have forgotten that we are at war with latrunculi who wish to destroy us. Anyone who doubts this need only read the recent statement by the five detainees at Guantanamo charged with planning the 9/11 attacks in which they describe the charge that they murdered Americans very clearly -- as a "badge of honor."

Mr. Owens is a professor at the Naval War College and editor of Orbis, the journal of the Foreign Policy Research Institute.

CIA has been ordered to get rid of contract interrogators and secret locations overseas

Blame The Messenger
Strategy Page, Apr 11, 2009

The CIA has been ordered to get rid of contract interrogators, and secret locations overseas where terrorist suspects were imprisoned and interrogated. This is all because, during the past eight years, opposition politicians in the U.S. accused the CIA of torturing terrorist suspects, to obtain information about attacks being planned. The interrogations worked, and there was very little of what one could call torture. However, the matter became a political issue, and the definition of torture was broadened to include things that are done regularly by Western police, including those in the United States.

The contract interrogators were people who had special language, cultural awareness and interrogation skills needed to get the job done. Most were former military, CIA or police interrogators, and a few were from foreign countries. These skills were particularly useful, because most of the terrorist suspects were from exotic, for most American interrogators, cultures. Having specialized knowledge was key to getting information out of many of these terrorists.

The CIA has put a brave, and career preserving, face on all this and declared that they have sufficient CIA employees to replace all the contract interrogators. They don't, and are hoping they can quietly slip into Congress or the White House and, in a classified briefing, scare the politicians sufficiently to bring in a contract interrogator for crucial situations. If not, and there's another attack in the United States that could have been provided by a competent interrogation, the blame will be shifted or, as a last resort, the CIA will have to take the blame. Thus the cycle that began in the 1940s when, right after World War II, the predecessor of the CIA, the wartime OSS (Office of Strategic Services) was disbanded for being politically incorrect and stepping on the wrong toes, repeats itself. When the Soviet threat was realized shortly thereafter, the OSS was quickly resurrected as the CIA. But it all happened again in the 1970s, when the CIA was punished and reformed for real or imagined misbehavior during the Vietnam war.

In the aftermath of these cleansing events, competent people stay away from the CIA, more problems arise, and desperate politicians demand something be done, no questions asked. But many potential espionage professionals will remember, and only the most courageous and self-sacrificing will step forward.

American Interests in Pakistan

American Interests in Pakistan. By Daveed Gartenstein-Ross
The Weekly Standard, Apr 13, 2009, Volume 014, Issue 29

Excerpts:

Sharif is aided in his rise by a sympathetic media, who ignore his shortcomings and help him "cultivate the image of a strong man who does not budge from his stance," in the words of commentator Yahya Hussaini. Officials in Zardari's government raised this concern with me. One complained that several recent pro-Sharif rallies were shown repeatedly on television before they had attracted many participants, and that the saturation coverage helped to increase their size.

The strong anti-American strand in Pakistan's media, moreover, indirectly aids Sharif. Thus, the message behind one music video that played frequently on Pakistani television during the recent crisis was that Pakistan's problems are caused by the American war in Afghanistan, not by jihadism. The video portrays a sinister-looking CIA agent and a cigar-smoking President Zardari cackling as a Predator strike kills an unjustly imprisoned Pakistani man who escapes from prison determined to "change the system of the country." Elsewhere in Pakistan's media, conspiracy-minded figures like commentator Ahmed Quraishi, who sees the hidden hand of the United States and India behind virtually all of Pakistan's ills, are reaching new prominence.

Indonesian President Yudhoyono's Big Decision

Indonesian President Yudhoyono's Big Decision, by Walter Lohman
Heritage WebMemo #2393
April 10, 2009

WaPo supports federal president's estate tax plan

The Small-Business Myth. WaPo Editorial
The facts about who would pay proposed tax increases
WaPo, Sunday, April 12, 2009; A16

SMALL BUSINESS is the cute puppy of American tax policy, along with its related breed, the family farm. Invoke small business, and the inevitable response is the policymaking equivalent of awwww, how sweet. Suggest that a proposed change might hurt small business, and you might as well be advocating torturing puppies. Now we like a cute puppy as well as the next editorial board, and we're all for small business, too. But the problem with the way this argument is deployed is that the facts often do not support the claims of harm.

Just recently, the small-business boogeyman came up in the debate over the estate tax -- specifically, whether it is unfair to impose a tax on estates in excess of $7 million per couple (the level this year) or whether the first $10 million of every estate should be exempt from taxation. Predictably, the advocates of the $10 million proposal, Sens. Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.), raised the small business/family farm canard. "Many have relatively low profit margins and are considered 'wealthy' by the government only because they own expensive equipment or land," they wrote in a letter to The Post.

In fact, nearly all small-business and family-farm estates are already shielded from having to pay estate tax. If the estate tax were kept at its current level, as President Obama advocates, only 430 business or farm estates would owe any tax whatsoever in 2011, according to an estimate by the Brookings Institution-Urban Institute Tax Policy Center. Moreover, it's not true that these estates would be forced to liquidate to come up with enough money to pay the estate tax. At current levels, 13 family farms and 41 family-owned businesses would not have had enough liquid assets to satisfy estate taxes in 2005, according to a study by the Congressional Budget Office. Even these would probably not have to be sold on account of a tax hit, because payments can be spread over a 14-year period.

The impact on small business is also deployed to argue against letting the Bush tax cuts for upper-income taxpayers expire. The Bush Treasury Department said that 7 percent of taxpayers with small-business income would be affected by a change in the top two tax rates; the Obama administration says that the correct number is 2 percent -- and that even this figure may overstate the number of what are generally considered small businesses, because it includes high-income partners in law firms, investment banks and the like.

Opponents of raising top marginal tax rates argue that this small slice of taxpayers is nonetheless responsible for generating a disproportionate share of small-business income -- about a quarter of the total, according to the Tax Policy Center -- and that higher rates would discourage entrepreneurship. As much as that seems like a matter of common sense, the evidence is far from clear. A 2006 study by Donald Bruce and Mohammed Mohsin found that "the top income tax rate has no economically significant effect" on entrepreneurship and that "it would take a 50-percentage-point cut in the top income tax rate to generate a one-percentage-point change in entrepreneurial activity." By that measure, the increase of three to five percentage points proposed by Mr. Obama hardly seems like a small-business job killer.

Taking the fight to the pirates

No Pain No Gain. By Seth Cropsey
Taking the fight to the pirates
The Weekly Standard, Apr 10,. 2009 4:15:00 PM

Barack Obama's good luck holds steady. When, for the first time in more than two centuries, pirates seized an American-flagged ship on April 8th, the 20-man American crew recaptured their ship hours later a few hundred miles east of the Somali coast. Although the captain remained a hostage, the recapture of the Maersk Alabama, a 17,000 ton container ship with a cargo of humanitarian assistance destined for Kenya, diminished potential public interest to a single individual, just as Iran's jailing of a single American journalist in late January relieved the new administration of having to address a crisis magnified by a large number of hostages. In the short term, the narrowing of these incidents to a couple of American citizens buys the Obama administration time as they search for solutions. The larger picture is more ominous.

The principles that are being tested in Iran and off the coast of Somalia hold no matter how many Americans are wrongfully detained by hostile governments or international outlaws: the United States is obliged to protect its innocent citizens. Failing to do so effectively invites more and bigger trouble. A similar principle applies to Chinese naval vessels' harassing of the unarmed U.S. Naval Survey ship, Impeccable, in international waters off Hainan island early in March. The Obama administration made diplomatic remonstrances and sent a destroyer to the area. This is not likely to have impressed China's leaders. The result is that there will be more such incidents--and not only in international waters near China--that test American resolve.

The hijacking of the Alabama offers President Obama an exceptional opportunity to act resolutely, justly, and effectively in reducing the likelihood of more attacks against American--and other--ships off the increasingly dangerous coast of east Africa, near one of the world's most important oceanic choke points: the Strait of Bab al Mandeb where the Red Sea empties into the Gulf of Aden. Some 20,000 vessels, most of them on their way to or from the Suez Canal or the Straits of Hormuz, pass through the gulf each year.

The ocean area that has become the pirates' hunting ground is immense, between one and 2.5 million square miles. In land terms, this ranges between roughly twice the size of India, and--at the lower end--an area about that of Argentina. NATO patrols the region with five ships besides three frigates from the European Union. The U.S. Navy maintains a presence of between five and 10 vessels. Notwithstanding, Lt. Nathan Christensen, the spokesman for the U.S. Navy's Fifth Fleet, noted that "we can't be everywhere at once," a remark that, while not aimed at the Pentagon's coming budget battle, is particularly appropriate given the slow, unabated shrinkage of the U.S. combat fleet. Lt. Christensen pointed out that the U.S. naval combatant nearest the Alabama when it was commandeered about 280 miles southeast of the Somalia pirate center, Eyl, was approximately 330 miles away at the time of the attack.

The U.S. and its allies are not the only contributors to the western Indian Ocean anti-piracy mission. China, India, Japan, and Russia as well as other nations have sent naval vessels to help secure the area.

Diplomatic efforts have paralleled naval ones. The United Nations Security Council in December 2008 unanimously passed Resolution 1851 whose title page "authorizes states to use land-based operations in Somalia." Subsequent language muddies this apparently tough grant of international authority requiring such government authority as exists in the minimally functional Somali state to notify the U.N. in advance of actual military operations. But since the resolution neither addresses nor prohibits less red-tape-bound military means, these remain possible. The same Security Council resolution directly supports international naval action to discourage piracy off the Somali coast.

Still, Secretary of State Clinton seems uncomfortable. She told a news conference on 9 April that "the administration is seeking a 21st century response" to piracy.

What could this mean? The basic requirements that senior Obama administration officials, including the president, have set as a standard for conducting foreign policy are all in place. The participation of many different navies off the Somali coast is diverse and multi-lateral. The U.N. has authorized the use of force against the pirates. Solid reason exists for taking full advantage of the careful work that preceded these measures: an attempt was made in international waters to steal American property, and an assault was made on an American crew. The American captain remains a hostage of the pirates.

Certainly, negotiations should continue for the captain's release and return. But, what then? Does a "21st century" response mean that with the crew and ship safely returned, the case is dismissed and we go about our business? This will guarantee more attacks on U.S.-flagged ships and American merchant marine sailors.

It will add to the appearance that the new administration's idea of a "21st century" response is one in which there are no consequences for those who violate international laws and customs in crossing the United States.

There are plenty of other reasonable alternatives that would send a clear message. If the pirates who seized the Alabama can be apprehended and transferred to a U.S. Navy ship, Title 18 of the U.S. Code allows them to be brought to the U.S. and, if found guilty, imprisoned for life. A more convincing approach would be to use the same unmanned aerial vehicles that have been operational since U.S. involvement in Bosnia to target pirates in the centers where they are known to congregate on land. Special operations missions could accomplish similar objectives, albeit with less plausible deniability.

Punishing the guilty would do justice, increase respect for the Obama administration while conforming to its standard of soliciting international approval, and decrease the likelihood of repeated attacks against Americans abroad. It might also provide the same benefit for mariners aboard ships carrying the flags of other states who go about their business peacefully in the region. This is more likely to increase respect for the administration abroad than ignoring direct challenges to the U.S. and packaging such sideways glances as policy that befits the 21st century.

Least likely to produce positive tangible result are approaches that bypass the administration's own foreign policy standard of multilateralism and UN sanction in pursuit of the additional and dubious requirement that wrongdoers escape serious consequences for their action.

The destroyer that was sent to the aid of Alabama is the U.S.S. Bainbridge. The ship was named for Captain William Bainbridge who served several tours in the American naval expeditions that eventually used force successfully to end the Barbary pirates' threat to American merchant shipping in the Mediterranean during the first two decades of the 1800s. Sometimes the 19th century, including the statesmanship of Thomas Jefferson and James Madison, is the most appropriate model for U.S. policy.

Seth Cropsey is a Senior Fellow at the Hudson Institute and served as a naval officer and as deputy undersecretary of the Navy in the administrations of Ronald Reagan and George H. W. Bush.