They used to be called wizards. :-) On Apr 24, 11:42 pm, Daniel Seigler <[email protected]> wrote: > 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 > > ... > > read more »- Hide quoted text - > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum
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