and economic EXPERTS said the financial situation of the world was sound, not too long ago. And Computer EXPERTS said that computers would double in power every year, ad infinim. And i have YET to meet an EXPERT that was even halfass rigth...EVER.
On Apr 24, 9:44 am, Travis <[email protected]> wrote: > - > > From: Travis > Subject: The Case Against "Smart Taxes" on Carbon > Date: Wednesday, April 22, 2009, > > *See Also... > *Green Jobs? <http://mises.org/story/3430> by George Reisman > Register for the Upcoming Mises Circle in Fort Worth, Texas: The Great > Depression: Then and Now <http://mises.org/events/113> > The Case Against "Smart Taxes" on Carbon > > *Mises Daily* by D.W. > MacKenzie<http://mises.org/articles.aspx?AuthorId=1006>| Posted on > 4/22/2009 > An MP3 audio version of this article, read by Floy Liley, is available as a > free > download<http://mises.org/multimedia/mp3/audioarticles/3421_MacKenzie.mp3> > . > [image: Earth Day Tax] > Today is Earth day, and a week ago we "celebrated" tax day. It is fitting, > in a sense, that Earth Day and Tax Day are only one week apart. Those who > blame global warming on human activity see taxation as an effective and > desirable means of preventing environmental global catastrophe. In a recent > publication, former Bush advisor Greg Mankiw has extended an "open > invitation to join the Pigou club" by embracing the idea of regulating > greenhouse gases with corrective taxes.[1]<http://mises.org/story/3421#note1> > The idea behind corrective taxes is relatively simple. British economist > A.C. Pigou explained how markets need correction: the use of goods we buy in > markets generates external costs. The price we pay for goods are internal, > but any type of pollution (noise, air or water borne) imposes a real cost on > other people outside the transaction. In such instances the amount of goods > that consumers buy will be excessive because they do not bear the full > costs. Taxes on goods that generate negative externalities internalize costs > to consumers, provided that they are set at the right level. Hence taxes can > correct markets that oversupply goods, in theory. > Professor Mankiw advocates taxing carbon, which includes taxes on gasoline. > Taxes on gasoline would reduce greenhouse gas emissions, while also reducing > road congestion and auto accidents. There are several standard economic > objections to such proposals for corrective taxation. > First of all, corrective taxation requires knowledge of the magnitude of > externalities. Externalities are by definition not priced through any social > mechanism or institution. But Mankiw admits to problems with calculating the > right level of taxation. > Second, the case for corrective taxation often derives from the nirvana > fallacy. Mankiw does mention that markets are efficient according to "the > first welfare theorem of economics," which is characterized by the total > absence of externalities. The idea that markets are efficient only when > externalities are absent suggests that markets should be held to an > impossible standard of perfection. Economist Ronald Coase demonstrated that > externalities vanish only in the wholly unreal world where people can > negotiate and carry out transactions at zero cost. Such a world of zero > transaction costs would deliver economic > perfection.[2]<http://mises.org/story/3421#note2> > The fact of the matter is that neither government nor markets deliver us > into nirvana. We could then accuse Professor Mankiw of making a false > comparison between flawed markets and an idealized government that always > corrects market flaws, but he skips this trap. The main problem with our > government is supposedly that politicians listen to voters rather than > experts. Mankiw borrows a few lines from Bryan > Caplan<http://books.google.com/books?id=qLEbLIAovFkC>to argue that > voters are irrational. Voters block the implementation of good > policies, like free trade and corrective carbon taxes, because they disagree > with the real experts. > I would agree with the first example that experts (i.e., economists) favor > free trade, and the public should pay us heed. The second example is more > problematic. Mankiw claims that as an economist he is not qualified to > comment on scientific theories of climate change. I agree. Neither of us are > experts on these matters. I do not understand the details of various > theories of climate change concerning greenhouse gases, volcanic eruptions, > ocean currents, and solar activity. > Mankiw further claims that there is a consensus among experts in climate > science that global warming is both real and caused by human actions. In > this case we need only examine empirical data to see why we should decline > invitations to the Pigou club. RSS and UAH > data<http://en.wikipedia.org/wiki/Satellite_temperature_measurements>on > global temperatures indicate that global warming peaked in 1998 and > went > flat during the past decade, while CO2 levels continued to > rise.[3]<http://mises.org/story/3421#note3> > [image: Figure 1] > [image: Figure 2] > The data indicate that global temperatures in the atmosphere actually fell > in 2007 and 2008. Some scientists claim that 90% of global warming takes > place in oceans, but a detailed study indicates that ocean temperatures fell > from 2003 to 2008.[4] <http://mises.org/story/3421#note4> > Mankiw is simply wrong. There is a scientific consensus that global warming > ceased ten years ago, and the idea that greenhouse gasses drive global > climate change is under dispute. As a Harvard professor, Dr. Mankiw could > consult with his colleague, Harvard astrophysicist Dr. Willie Soon, to find > out more about how solar activity drives global > temperatures.[5]<http://mises.org/story/3421#note5>Dr. Soon is far > from the only scientist who doubts the theory of man-made > global warming. Last summer 31,000 scientists signed a petition asserting > that > > There is no convincing scientific evidence that human release of … > greenhouse gases is causing or will, in the forseeable future, cause > catastrophic heating of the Earth's atmosphere and disruption of the Earth's > climate … there is substantial scientific evidence that increases in > atmospheric carbon dioxide produce many beneficial effects upon the natural > plant and animal environments.[6] <http://mises.org/story/3421#note6> > > Furthermore, there is a growing number of scientists who predict global > cooling over the next twenty or thirty > years.[7]<http://mises.org/story/3421#note7>Meteorologists Henrik > Svensmark and Eigil Friis-Christensen have found > evidence that solar activity affects global > temperatures.[8]<http://mises.org/story/3421#note8>Scientific > projections of solar activity predict a solar minimum over the > next two decades.[9] <http://mises.org/story/3421#note9> Of course, there > are scientists with different opinions of climate change, but the point here > is that scientific opinion is divided on the causes of climate change. > Moreover, the actual evidence on recent climate change does not support the > case for carbon taxes. > Mankiw has mistaken intellectuals for experts. F.A. Hayek characterized > intellectuals as people who convey the ideas of experts to the general > public through the mass media.[10] <http://mises.org/story/3421#note10> A > large part of print and broadcast media does promote the idea of > anthropogenic global warming. However, these intellectuals are well behind > the curve of expert opinion. There was a consensus on the existence of > global warming ten years ago (though the causes of this trend were still > debated). It is now clear that global warming has ceased, and we may have > entered a period of global cooling. > Mankiw has twisted Bryan Caplan's idea that voters hold irrational beliefs > to argue that experts should devise corrective carbon taxes. Gasoline taxes > supposedly make sense because of externalities, and voters reject these > taxes supposedly because they are foolish. The idea that gas prices are too > low and must be raised with corrective taxes derives from a false notion of > reason. The idea that experts can do a better job of directing the use of > resources, including gasoline, than can markets and market prices derives > from the faulty assumption that experts know more than the whole of society. > > The price of gasoline is formed out of competition for labor and capital by > various industries. The industries that garner the most revenue from > consumers gain the capital and labor needed to expand production towards > efficient levels. Market prices therefore reflect marginal consumer demands > for products. Market prices do not reflect perfect knowledge, but there is > no better source of data on the efficient use of resources. Self-described > experts claim to possess superior knowledge of consumer desires, but they > are engaged in empty speculation. The effects of externalities on consumers > are unobserved by definition, and in this case the existence of the source > of externality in question is in serious doubt. > The good news is that Mankiw is not personally capable of implementing > so-called smart taxes. The bad news is that the Obama administration has > been taken in by proponents of the anthropogenic-global-warming theory. On > Friday, the EPA announced that carbon emissions "endanger the health and > welfare of current and future generations." Officials at the EPA have > concluded that increasing concentrations of C02 are a pollutant. The EPA > gained authority in this matter through a Supreme Court decision that > defined C02 as a pollutant under the Clean Air Act. This move by the EPA > indicates higher taxes and regulation — targeting industrial and auto > emissions — in the coming decade. Unfortunately, this is not just a matter > of ivory-tower discussions at Harvard. Public officials are poised to move > on this issue, and their policies could impose heavy costs on American > consumers. > [image: Hayek > Collection]<http://www.mises.org/store/Hayek-Collection-P482.aspx> > Given the flaws in Professor Mankiw's arguments, I will have to decline his > invitation to join the Pigou club. Members of the Pigou Club may think > experts are smart enough to improve upon the results of market competition, > but this is an unproven proposition. Market prices reflect the collective > knowledge of all members of society who buy and sell in markets, and there > is no better source of data on how to best satisfy consumer demands. Prices > are certainly imperfect representations of economic reality. But the limits > of individual human reason make efforts by experts to outguess markets > futile. > Since the case for "smart taxes" is unfounded, I will reply to Professor > Mankiw by extending an invitation for him to join the "Hayek Club" by > acknowledging that market prices are the only practicable means of directing > global production towards the satisfaction of the most urgent consumer > demands. > [VIEW THIS ARTICLE ONLINE] <http://mises.org/story/3421> > ________________________ > D.W. MacKenzie teaches economics at the Coast Guard Academy. (The contents > of this paper do not reflect official views of The U.S. Coast Guard > Academy.) Send him mail <[email protected]>. See his article > archives<http://mises.org/articles.aspx?AuthorId=1006>. > Comment on the blog <http://blog.mises.org/archives/009825.asp>. > An MP3 audio version of this article, read by Floy Liley, is available as a > free > download<http://mises.org/multimedia/mp3/audioarticles/3421_MacKenzie.mp3> > . > Notes [1] <http://mises.org/story/3421#ref1> See Greg Mankiw, "Smart Taxes: > An Open Invitation to Join the Pigou Club," *The Eastern Economic Journal (* > 2009). > [2] <http://mises.org/story/3421#ref2> This proposition also assumes perfect > information, perfect competition, and perfect property rights. > [3] <http://mises.org/story/3421#ref3> See "Global Warming On > Hold?"<http://dsc.discovery.com/news/2009/03/02/global-warming-pause.html> > ** by Michael Reilly, *Discovery News*. > [4] <http://mises.org/story/3421#ref4> See "The Mystery of Global Warming's > Missing Heat"<http://www.npr.org/templates/story/story.php?storyId=88520025>by > Richard Harris, NPR.org. > [5] <http://mises.org/story/3421#ref5> The blog Trade And Taxes > discusses<http://tradeandtaxes.blogspot.com/2009/04/willy-soon-on-global-warmin...>how > Dr. Soon lost his federal funding for challenging the pollution theory > of global warming. Dr. Soon himself can be heard in this YouTube > video<http://www.youtube.com/watch?v=9rEXe4y1d8Q> > . > [6] <http://mises.org/story/3421#ref6> See "Scientists sign petition denying > man-made global > warming"<http://www.telegraph.co.uk/news/worldnews/2053842/Scientists-sign-pet...>by > Graham Tibbets, > Telegraph.co.uk <http://telegraph.co.uk/>. > [7] <http://mises.org/story/3421#ref7> See "Not Putting their money where > their mouths > are,"<http://www.marginalrevolution.com/marginalrevolution/2005/08/not_putt...>by > Alex Tabbarok, Marginal Revolution, "Russian > Scientist says Earth could face new ice > age,"<http://www.freerepublic.com/focus/f-news/1958316/posts>FreeRepublic.com, > and " > Global cooling gains momentum among > scientists"<http://deltafarmpress.com/news/robinson-column-0825/>by > Elton Robinson, DeltaFarmPress.com. > [8] <http://mises.org/story/3421#ref8> See "The sun moves climate > change,"<http://www.canada.com/nationalpost/story.html?id=fee9a01f-3627-4b01-9...>Canada.com. > [9] <http://mises.org/story/3421#ref9> See "Long Range Solar Forecast: Solar > Cycle 25 peaking around 2022 could be one of the weakest in > centuries,"<http://science.nasa.gov/headlines/y2006/10may_longrange.htm>NASA.gov. > ** > [10] <http://mises.org/story/3421#ref10> See F.A. Hayek, *The Intellectuals > and Socialism*.[image: Download > PDF]<http://mises.org/etexts/hayekintellectuals.pdf>University of > Chicago Press, 1948. > *Join the Mises Institute* <https://www.mises.org/donate.asp>* **Mises.org > Store* <http://www.mises.org/store> > > *Home* <http://www.mises.org/>* | **About* <http://www.mises.org/about.asp>* > | **Email List* <http://www.mises.org/elist.asp>* | > **Search*<http://www.google.com/u/Mises> > * | **Contact Us* <http://www.mises.org/contact.asp>* | > **Periodicals*<http://www.mises.org/journals.asp> > * | **Articles* <http://www.mises.org/articles.asp>* | **Games & > Fun<http://www.mises.org/fun.asp> > * > *FAQ <http://www.mises.org/fun.asp> | > **EBooks*<http://www.mises.org/StudyGuideDisplay.asp?SubjID=117> > * | **Resources* <http://www.mises.org/scholar.asp>* | > **Catalog*<http://www.mises.org/catalog.asp> > * | **Contributions* <https://www.mises.org/donate.asp>* | > **Freedom*<http://www.mises.org/calendar.asp> > You are subscribed as [email protected] > EasyUnsubscribe<http://mises.biglist.com/do/unsub/article/87556804/s265y83c20/1574>(by > email <[email protected]>) | > Settings<http://mises.biglist.com/do/acct/article/87556804/s265y83c20/1574>| > Report > Abuse <http://mises.biglist.com/do/abuse/article/87556804/s265y83c20/1574> > > -- > *~@):~{> --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. 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