Jeffrey Alan Miron

Federalism

My article in today's TCSDaily makes the case for federalism.  It begins as follows:

Most debates about government policy concern whether government should intervene. A different but important question is whether intervention belongs at the state or federal level, if intervention occurs. In fact, many current federal policies should be left to the states.

The full article is here.

Same-Sex Marriage in Massachusetts

In 2003, the Massachusetts Supreme Court ruled that the Massachusetts state constitution requires the state to provide gay marriage.  The ruling generated enormous controversy, both due to the substance and because it meant a court, rather than an elected legislature, was imposing same-sex marriage on Massachusetts.

Now Massachusetts is a considering a constitutional amendment to that would ban same-sex marriage.   Proponents of same-sex marriage are trying to block a vote in the legislature that would be the first step toward putting this amendment on the 2008 ballot:

Governor Mitt Romney and Cardinal Sean P. O'Malley called on the Legislature yesterday to hold a scheduled vote next month on a proposed ban of same-sex marriage, amid indications that gay-rights advocates are prepared to use procedural tactics to kill the measure.

Two weeks before lawmakers are scheduled to take up the constitutional amendment, Romney along with O'Malley and other religious leaders expressed concern that same-sex marriage supporters on Beacon Hill will try to prevent the measure from coming up for debate. Such an outcome could abruptly end the long campaign to put the ban to voters in 2008.

As I have written previously, I believe the ideal policy is for government to stop providing marriage of any kind and leave marriage-like arrangements to private contracting.

This is unlikely to happen, however.  Absent government exit from the marriage business, I believe government should provide same-sex as well as opposite-sex marriage.

But I also think it would be beneficial to put this issue on the ballot and allow a straight up or down vote.   The same-sex issue is sufficiently controversial that having a decision imposed by a court is inflammatory and polarizing. 

If instead the voters approve same-sex marriage (which is what I expect to happen in Massachusetts), one key counter-argument goes away, and everyone will have to accept same-sex marriage as having been chosen in a democratic fashion.   

If voters turn down same-sex marriage, that will be a disappoinment.  But it will also suggest that the time is not yet right and that proponents should consider intermediate steps like civil union.   This approach is not satisfying to many proponents of same-sex marriage, since civil union does not have the same emotional, religious, or cultural significance as marriage. 

Substantively, however, civil union accomplishes the same thing as marriage.  More importantly, pushing same-sex marriage before an electorate is ready to accept it can easily generate a backlash that is counterproductive.   The proliferation of attempts to ban same-sex marriage that arose after 2003 is consistent with this concern.

The States, Kelo, and Emminent Domain

Scott Bullock, the laywer at the Intitute of Justice lawyer who argued the Kelo case before the Supreme Court, writes that in the year since the decision, states have acted vigorously to reverse the implications of Kelo:

When I got the call from the Supreme Court clerk's office telling me that the court had decided Kelo v. New London -- and that the city had won -- I and my colleagues who had worked on this case from the trial court up to the Supreme Court sat together in stunned silence. ...

What a difference a year makes.

Kelo is the most universally despised Supreme Court decision in decades. And it touched off a nearly unprecedented, grass-roots backlash against eminent domain abuse -- where land is taken, not for a traditional public use like a road or a public building, but from poorer folks and given to wealthier folks, all in the name of "development."  ...

So far the results have been encouraging. Legislatures in 25 states have responded to public outcry by restricting eminent domain in a variety of ways. Three other states passed similar legislation, only to have it vetoed by the governor. Six states -- Florida, Georgia, Louisiana, Michigan, New Hampshire and South Carolina -- have constitutional amendments to reform eminent domain that will go before voters this fall.

This is a nice illustration of federalism: states adopting reasonable policies so long as the federal government does not make this impossible.

Vermont Campaign Finance Law

The Supreme Court has struck down a Vermont campaign finance law:

Vermont's law, approved in 1997, was the toughest in the country with regard to setting limits on the amount individuals and parties may contribute to campaigns and, perhaps more significantly, on how much candidates may spend on their campaigns.

The measure was enacted as a direct challenge to Buckley v. Valeo , the 30-year-old Supreme Court ruling that has generally been read to permit limits on campaign contributions, for the purpose of stopping corruption or apparent corruption -- and to bar limits on candidates' spending as a violation of free speech.

I oppose all government restrictions on campaign spending and campaign contributions.  So you might think I would applaud the Court's decision in this case.  I am disappointed, however, for two reasons.

The Court's decision is timid and half-baked.  It struck down the particular limits set by the Vermont law as being too low.  But the decision accepts rather than reverses the fundamentally wrong-headed framework established in Buckley v. Valeo.  According to that 1974 decision, limits on spending violate free speech but limits on contributions do not.  This reasoning has always been non-sensical, and the only coherent view is that all limits are inconsistent with the First Amendment.

The other issue is that the law in question applied to state rather than federal elections.   And I believe federalism is the right approach to policy.  So if Vermont wants to adopt a loony campaign finance law, I think that should be an issue for Vermont but not the federal constitution.

Whales Overboard

One problem with government interventions is that, once enacted, they expand to encompass inappropriate goals even if the original motivation made sense.

The International Whaling Commission provides a perfect example.  Preservation of whale stocks is a classic case of market failure.  The property rights to whales are not well-defined, so each country's whaling industry fishes more than is consistent with long-term preservation of the species. Thus international treaties that regulate whaling make sense.  But only up to a point.

As this article makes clear, some countries are intent on eliminating all whaling, even when there is no danger of species extinction:

"This is now a period in human history where the whaling issue will be decided once and for all," said Ian Campbell, Australia's minister for the environment and heritage, in an interview Thursday. "Whaling will be stopped, if I have my way, with the only exception being for aboriginal subsistence whaling."

The commission has sharply limited whaling since 1986, making exceptions only for aboriginal whaling and scientific whaling by a handful of countries including Japan and Iceland. Norway ignores the moratorium. These three countries say the moratorium has allowed many species to rebound sufficiently to sustain a commercial fishery and have announced they plan to increase their total current catch of 2,395 whales a year to 3,215 by 2008.

Some whale populations, such as minkes, have indeed rebounded in recent years, but others continue to struggle after being devastated by decades of industrial-scale whaling.

The sensible policy is to permit commerical whaling for those species that are not in danger of extinction.  A total moratorium makes no economic sense.

Does Ethanol Make Sense?

Does use of ethanol save on use of fossil fuels?

That question, it turns out, is not easy to answer. Ethanol's enthusiasts point to the potential benefits of replacing gasoline with a renewable energy source that they contend will reduce America's reliance on foreign oil and cut greenhouse gases produced by fossil fuels. But the benefits of ethanol, particularly when it is produced from corn, are not so clear cut.

A number of researchers who have looked at the issue have concluded that more energy now goes into making a gallon of ethanol than is contained in that gallon. Others, however, find a net benefit, though most see it as relatively modest.

Even if the answer is an unambiguous yes, that does not mean policy should subsidize ethanol. Ethanol is substantially more expensive than fossil fuel.  A subsidy makes sense only if ethanol reduces externalities from energy use enough to outweigh its higher costs.

The three external benefits that might accrue from ethanol are reduced reliance on foreign oil; reduced air pollution; and reduced emission of greenhouse gases.

The first alleged benefit is, in my view, routinely overstated.  There is no "oil weapon" because Middle East oil producers must sell their oil somewhere.  In a world market any refusal to sell to the U.S. is irrelevant.

The second and third alleged benefits are also likely emphemeral.  Given that ethanol production requires substantial energy use, any reduction in pollution or greenhouse gases has to be minor.

So who benefits from ethanol subsidies?  Corn farmers in the Midwest and the politicans who have caved to their interests.  Taxpayers and the economy are the losers.

Hillary Clinton Will be the Next President

I have a bet with my wife that Hillary Rodham Clinton will be the next president.

My wife supports her position by pointing to the strong negatives Clinton elicits from a substantial fraction of those polled.

I support my position with three arguments.

First, the "market forecast" makes Clinton the front-runner among candidates for the Democratic nomination and makes the 2008 race a toss-up between the Democratic and Republican candidates. Check out the current betting at tradesports.com (go to the category Politics and then the sub-category 2008 U.S. elections).

Second, consider the following "electoral math."  To a first approximation, red states are red and blue states are blue.  That means the electoral outcome in 2008 is likely to approximate the outcomes in 2000 and 2004.  New York and California will go for the Democrat regardless.  Texas will go for the Republican.  And so on.

So Clinton needs to change the outcome in only one or two large swing states to pull off a victory in the electoral college, even if she does not win the popular vote.  Al Gore would have been president had he won Florida in 2000.   John Kerry would have been president had he won Ohio in 2008.

Third, none of the Republican wannabes will be a compelling candidate.  John McCain (the front-runner according to tradesports) is a flaming lefty on a few issues but a hard-core conservative on others.  The voting public will find that confusing, and the conservative base of the Republican party will not embrace him with enthusiasm.  Giuliani has similar problems.  Romney and Allen are still relative unknowns.

So, Clinton is virtually a lock. 

Note, however, that the stakes in my bet consisted of all my wealth against all of my wife's.  When she suggested I agree to make the bed every day for a month if Clinton does not win, I passed.

Sex Offender Registries

While working at home yesterday, I received an automated phone call from the Wellesley Police Department informing me of an important announcement available on the Department's web site. The announcement indicated that a convicted sex offender, having complied with the Massachusets Set Offender Registry Law, was now working in Wellesley (although living elsewhere).  The web site includes a recent photograph of the offender.

I find Sex Registries troubling.  Many sex offenders no doubt pose a substantial risk of recidivism, and it is understandable that people wish to be forewarned.

But the registries seem unwise.  For starters, registries give the public a false sense of security.  Even if the residents of an offender's place of residence and place of work take precautions, the offender has innumerable other opporunities to recidivate in adjacent locations. So the effect of registries on the incidence of sex crimes is probably miniscule.

In addition, registries might, if anything, increase the chances of recidivism by making it hard for offenders to re-integrate into society.

So what can society do to protect itself against sex offenders?  The obvious answer is to make sentences for such offenses far longer.  That has a cost -- roughly $30,000 per year for incarceration -- but it is certainly effective so long as an offender is behind bars.  And since the likelihood of recidivism for sex crimes may well decline substantially beyond a certain age, the incidence of recidivism is likely to be low for sufficently old offenders.

Tax Credits for Hybrid Cars

The standard justification for granting tax credits for hybrid cars is to promote energy efficiency.  Set aside for today whether that is a sensible goal for policy.  This article explains that the federal tax credit is now structured to benefit domestic car manufacturers, with at best ambivalent effects on energy efficiency:

The point of a tax policy like this — the point of a lot of tax policy, in fact — is to give people an incentive to change their behavior, and persuading Americans to use less oil certainly sounds like one of Washington's priorities these days.

Yet, astoundingly, many of the tax credits are about to be taken away. So if you are thinking of buying a Prius or Camry Hybrid, do it soon, as in this month or maybe next. And if you are wondering whether policy makers mean it when they say they're serious about changing our energy policy, join the crowd.

THE first thing to understand about the hybrid tax credit is that it was never really intended to reduce oil imports from the Middle East or slow the effects of global warming. The credit was created to prop up Detroit while giving conservation a nod.

The article goes on to explain that Congress is shifting the credits, in effect, from foreign to domestic manufacturers even though the domestic cars that will qualify for the credit get worse mileage than many non-hyrid vehicles.

The article further notes:

But I think there is a larger lesson here. In recent months, there has been a lot of talk in Washington about alternative energy sources, not just hybrids, but ethanol, fuel cells and nuclear power as well. Mr. Bush, Senator Hillary Rodham Clinton and others are pitching tax credits and similar financing mechanisms to give these technologies a boost.

The reality, though, is that government isn't particularly good at predicting which alternative will pan out. No single person or group is. "You can spend a lot of money on technologies that don't fit," says Susan M. Cischke, Ford's vice president for environmental and safety engineering. Remember the electric-car fad in California?

What the government can do that nobody else can, however, is set up a simple system of rewards and penalties — with the single goal of reducing oil use, regardless of the means — and then let the marketplace work it out. Economists tend to prefer a gas tax, but it's not the only option.

Well said.

Massachusetts Fluffernutter Wars

Well, at least when they're arguing about this stuff, they're not doing any real damage:

A Fluffernutter war has begun in the Massachusetts Legislature.

Countering a state senator's attempt to limit servings of Marshmallow Fluff in schools, a state representative said yesterday she would file her own bill to make the Fluffernutter the state's official sandwich. A Fluffernutter is a peanut butter and Fluff sandwich.

State Representative Kathi-Anne Reinstein said Senator Jarrett T. Barrios has taken a ridiculous tack by going after the popular gooey snack. Marshmallow Fluff was invented by a Massachusetts man and is still produced in Lynn, part of Reinstein's district.

Barrios, outraged that his son was served a Fluffernutter for lunch at his Cambridge elementary school, proposed an amendment to a junk food bill, calling for limiting the serving of Fluff to once a week in schools statewide.

``I'm protective of Fluff; I grew up on it," said Reinstein, a Democrat. ``But it's insane that we're having this conversation."