Robert Nozick, father of libertarianism: Even he gave up on the movement he inspired.

Thought I’d blogged this before, but this is from an excellent piece on Libertarianism’s most famous proponent and his own change in perspective later in life.

How could a thinker as brilliant as Nozick stay a party to this? The answer is: He didn't. "The libertarian position I once propounded," Nozick wrote in an essay published in the late '80s, "now seems to me seriously inadequate." In Anarchy democracy was nowhere to be found; Nozick now believed that democratic institutions "express and symbolize … our equal human dignity, our autonomy and powers of self-direction." In Anarchy, the best government was the least government, a value-neutral enforcer of contracts; now, Nozick concluded, "There are some things we choose to do together through government in solemn marking of our human solidarity, served by the fact that we do them together in this official fashion ..."

We're faced then with two intriguing mysteries. Why did the Nozick of 1975 confuse capital with human capital? And why did Nozick by 1989 feel the need to disavow the Nozick of 1975? The key, I think, is recognizing the two mysteries as twin expressions of a single, primal, human fallibility: the need to attribute success to one's own moral substance, failure to sheer misfortune. The effectiveness of the Wilt Chamberlain example, after all, is best measured by how readily you identify with Wilt Chamberlain. Anarchy is nothing if not a tour-de-force, an advertisement not just for libertarianism but for the sinuous intelligence required to put over so peculiar a thought experiment. In the early '70s, Nozick—and this is audible in the writing—clearly identified with Wilt: He believed his talents could only be flattered by a free market in high value-add labor. By the late '80s, in a world gone gaga for Gordon Gekko and Esprit, he was no longer quite so sure.

Robert Nozick, father of libertarianism: Even he gave up on the movement he inspired.

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Busting the seven great myths of poverty

A nice summary of many of the most common myths about the poor, then this:

The United States, the richest country in the world, spends only 6.3% of the federal budget on public assistance. Fraud in the SNAP program is a single penny on the dollar. Public assistance programs are some of the most well-run, efficient programs in government. Yet we continually hear from the right and the left that these programs are a waste of our tax dollars. Instead of worrying about that $4.45 a day our less fortunate neighbors are getting as a part of their SNAP benefits, we should be more concerned with corporate welfare in which wages have been artificially depressed due to a minimum wage that has not kept pace with inflation. If we truly want to reduce the number of people on public assistance, we must raise the minimum wage and index it to inflation.

Until that happens, let's show a little compassion for those who are less fortunate. Believe it or not, they did not ask to be poor.

Busting the seven great myths of poverty

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Even Critics of Safety Net Increasingly Depend on It - NYTimes.com

It speaks for itself…

LINDSTROM, Minn. — Ki Gulbranson owns a logo apparel shop, deals in jewelry on the side and referees youth soccer games. He makes about $39,000 a year and wants you to know that he does not need any help from the federal government.

He says that too many Americans lean on taxpayers rather than living within their means. He supports politicians who promise to cut government spending. In 2010, he printed T-shirts for the Tea Party campaign of a neighbor, Chip Cravaack, who ousted this region’s long-serving Democratic congressman.

Yet this year, as in each of the past three years, Mr. Gulbranson, 57, is counting on a payment of several thousand dollars from the federal government, a subsidy for working families called the earned-income tax credit. He has signed up his three school-age children to eat free breakfast and lunch at federal expense. And Medicare paid for his mother, 88, to have hip surgery twice.

Even Critics of Safety Net Increasingly Depend on It - NYTimes.com

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Congressional Budget Office Report Finds Minimum Wage Lifts Wages for 16.5 Million Workers | The White House

I couldn’t understand why the CBO estimated job losses with a minimum wage hike. It’s because they seemed determine to ignore the literature on the subject:

6. CBO’s estimates of the impact of raising the minimum wage on employment does not reflect the current consensus view of economists. The bulk of academic studies, have concluded that the effects on employment of minimum wage increases in the range now under consideration are likely to be small to nonexistent. CBO also agrees that the employment effect could be essentially zero, but their central estimates are not reflective of a consensus of the economics profession. Specifically:

• Seven Nobel Prize Winners, eight former Presidents of the American Economic Association and over 600 other economists recently summarized the literature on the employment effects of the minimum wage in this way: “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”
• The pioneering research in this area was conducted by John Bates Clark Medal winner David Card and Alan Krueger, who published a study in the American Economic Review in 1994 finding that fast food restaurants in New Jersey did not cut back employment relative to Pennsylvania after the former State raised its minimum wage. They concluded, “We find no indication that the rise in the minimum wage reduced employment.”
• The Card-Krueger research was generalized by Arindrajit Dube, T. William Lester, and Michael Reich who compared 288 pairs of contiguous U.S. counties with minimum wage differentials from 1990 to 2006. Based on this, researchers found “no adverse employment effects” from a minimum wage increase.
• A recent literature review of the extensive published work on the minimum wage concluded: “[W]ith 64 studies containing approximately 1,500 estimates, we have reason to believe that if there is some adverse employment effect from minimum-wage raises, it must be of a small and policy-irrelevant magnitude.”
• Another recent review of the theory and evidence on the minimum wage by John Schmitt at the Center for Economic Policy Research concluded that “The employment effects of the minimum wage are one of the most studied topics in all of economics. This report examines the most recent wave of this research – roughly since 2000 – to determine the best estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage.”

Overall the logic for the finding that raising the minimum wage does not result in large adverse impacts on employment is that paying workers a better wage can improve productivity and thereby reduce unit labor costs. These adjustments, along with others that firms can make, help explain why the increase in the minimum wage need not lead to a reduction in employment. Higher wages lead to lower turnover, reducing the amount employers must spend recruiting and training new employees. Paying workers more can also improve motivation, morale, focus, and health, all of which can make workers more productive. In addition, by reducing absenteeism, higher wages can increase the productivity of coworkers who depend on each other or work in teams. In addition, businesses can adjust in other ways rather than reducing employment (for example, by accepting lower profit margins).  CBO’s estimates do not appear to fully reflect the increased emphasis on all of these factors from the recent economics literature.

Congressional Budget Office Report Finds Minimum Wage Lifts Wages for 16.5 Million Workers | The White House

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Obamacare and part-time jobs: The myth exploded (again) - latimes.com

 

Tuesday's tepid brew of jobs data, delayed more than two weeks by the government shutdown, wasn't worth waiting for. It shows an increase in total nonfarm employment by 148,000 in September over August, which is consistent with economic growth crawling along in second gear.

The report's most notable nugget is the change in part-time work. Over the last month the number of workers in part-time jobs for economic reasons--slack demand, cutbacks in hours--has remained stable. Over the last year, however, it has fallen by 681,000. Those part-timers also constitute a smaller share of all workers--5.5% in September compared to 6% a year earlier.

That puts the lie to the popular conservative meme that Obamacare has transformed America's workforce into part-timers. The idea is that employers wishing to evade the law's requirement that they offer health insurance to employees working more than 30 hours a week will cut their hours to 29 or less. The shorthand about this provided by Sen. Ted Cruz (R-Texas), that one-stop shop for Obamacare disinformation, was "single parents who have been forced into part-time work."

Obamacare and part-time jobs: The myth exploded (again) - latimes.com

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Don’t Blame Health Law for High Part-Time Employment - Real Time Economics - WSJ

 

Don’t blame the health law for high levels of part-time employment. In fact, using the law’s definitions, part-time work isn’t increasing at all as a share of employment, at least not yet.

Nearly 8 million American were working part-time in September because they couldn’t find full-time work. Overall, 27 million people — nearly a fifth of all employees — are working part-time, well above historical norms.

Many critics of the Obama administration have pointed the finger for the prevalence of part-time jobs at the Affordable Care Act, the 2010 law better known to some as “Obamacare.” The law’s so-called “employer mandate” requires most midsize and larger companies to offer health insurance to their full-time employees. That, critics argue, provides companies with an incentive to hire part-timers instead.

The Obama administration earlier this year said it would delay the requirement until 2015 to give companies more time to comply. But some employers have said they are nonetheless cutting back on full-time hiring. Indeed, part-time employment rose early this year, while full-time employment growth stalled.

But a closer look at the data provides little evidence for the notion that the health law is driving a shift to part-time work, although it could as the mandate deadline approaches.

First of all, over a longer time frame, part-time work has actually been falling as a share of employment in recent years. Before the recession, about 17% of employed Americans worked 35 hours or less, the standard Labor Department definition of “part time.” During the recession, that figure rose, briefly hitting 20%. It’s been trending down since then, but only slowly, hitting 19% in September.

Don’t Blame Health Law for High Part-Time Employment - Real Time Economics - WSJ

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The Myth of the Medical-Device Tax - NYTimes.com

 

Not only can the medical-device industry easily afford the tax without compromising innovation, but the industry’s enormous profits are a result of anticompetitive practices that themselves drive up medical-device costs unnecessarily. The tax is a distraction from reforms to the industry that are urgently needed to lower health care costs.

The medical-device industry faces virtually no price competition. Because of confidentiality agreements that manufacturers require hospitals to sign, the prices of the devices are cloaked in secrecy. This lack of transparency impedes hospitals from sharing price information and thus knowing whether they are getting a good deal.

Even worse, manufacturers often maintain personal relationships (sometimes involving financial payments like consulting fees) with physicians who choose the medical devices that their hospitals purchase, creating a conflict of interest. Physicians often don’t even know the costs of the devices, and individual physicians often choose devices on their own, which weakens a hospital’s ability to bargain for volume discounts.

Such anticompetitive practices help generate a wide variation in the prices of medical devices — and contribute to higher prices in general. For example, the Government Accountability Office found that prices for cardiac implantable medical devices in the United States vary by several thousand dollars. And even the lowest-priced devices in the United States are expensive compared with those in other developed countries. According to the consulting firm McKinsey & Company, the United States spends about 50 percent more than expected on the top five medical devices, compared with Europe and Japan. McKinsey calculates that this amounts to $26 billion in excessive spending each year. Medicare, private health insurers and patients end up paying these inflated prices.

Excessive prices fuel enormous profits — profits that dwarf both the medical-device tax and the industry’s investments in research and development. Consider the device division of Johnson & Johnson, which in 2012 had an operating profit of $7.2 billion. By the company’s own estimate, the device tax would amount to at most $300 million, and its investment in research and development amounts to only $1.7 billion.

The Myth of the Medical-Device Tax - NYTimes.com

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Tax the rich? IMF sparks a mini revolution | AFP.com

 

Tax the rich and better target the multinationals: The IMF has set off shockwaves this week in Washington by suggesting countries fight budget deficits by raising taxes.

Tucked inside a report on public debt, the new tack was mostly eclipsed by worries about the US budget crisis, but did not escape the notice of experts and nongovernmental organizations (NGOs).

"We had to read it twice to be sure we had really understood it," said Nicolas Mombrial, the head of Oxfam in Washington. "It's rare that IMF proposals are so surprising."

Guardian of financial orthodoxy, the International Monetary Fund, which is holding its annual meetings with the World Bank this week in the US capital, typically calls for nations in difficulty to slash public spending to reduce their deficits.

But in its Fiscal Monitor report, subtitled "Taxing Times", the Fund advanced the idea of taxing the highest-income people and their assets to reinforce the legitimacy of spending cuts and fight against growing income inequalities.

"Scope seems to exist in many advanced economies to raise more revenue from the top of the income distribution," the IMF wrote, noting "steep cuts" in top rates since the early 1980s.

According to IMF estimates, taxing the rich even at the same rates during the 1980s would reap fiscal revenues equal to 0.25 percent of economic output in the developed countries.

"The gain could in some cases, such as that of the United States, be more significant," around 1.5 percent of gross domestic product, said the IMF report, which also singled out deficient taxation of multinational companies.

In the US alone, legal loopholes deprive the Treasury of roughly $60 billion in receipts, the global lender said.

The 188-nation IMF said that it did not want to enter into a debate on whether the rich should pay more taxes.

But, it said: "The chance to review international tax architecture seems to come about once a century; the fundamental issues should not be ducked."

Tax the rich? IMF sparks a mini revolution | AFP.com

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Immigrants Contributed An Estimated $115.2 Billion More To The Medicare Trust Fund Than They Took Out In 2002–09

 

Many immigrants in the United States are working-age taxpayers; few are elderly beneficiaries of Medicare. This demographic profile suggests that immigrants may be disproportionately subsidizing the Medicare Trust Fund, which supports payments to hospitals and institutions under Medicare Part A. For immigrants and others, we tabulated Trust Fund contributions and withdrawals (that is, Trust Fund expenditures on their behalf) using multiple years of data from the Current Population Survey and the Medical Expenditure Panel Survey. In 2009 immigrants made 14.7 percent of Trust Fund contributions but accounted for only 7.9 percent of its expenditures—a net surplus of $13.8 billion. In contrast, US-born people generated a $30.9 billion deficit. Immigrants generated surpluses of $11.1–$17.2 billion per year between 2002 and 2009, resulting in a cumulative surplus of $115.2 billion. Most of the surplus from immigrants was contributed by noncitizens and was a result of the high proportion of working-age taxpayers in this group. Policies that restrict immigration may deplete Medicare’s financial resources.

Immigrants Contributed An Estimated $115.2 Billion More To The Medicare Trust Fund Than They Took Out In 2002–09

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How Austerity Kills - NYTimes.com

 

If suicides were an unavoidable consequence of economic downturns, this would just be another story about the human toll of the Great Recession. But it isn’t so. Countries that slashed health and social protection budgets, like Greece, Italy and Spain, have seen starkly worse health outcomes than nations like Germany, Iceland and Sweden, which maintained their social safety nets and opted for stimulus over austerity. (Germany preaches the virtues of austerity — for others.)

As scholars of public health and political economy, we have watched aghast as politicians endlessly debate debts and deficits with little regard for the human costs of their decisions. Over the past decade, we mined huge data sets from across the globe to understand how economic shocks — from the Great Depression to the end of the Soviet Union to the Asian financial crisis to the Great Recession — affect our health. What we’ve found is that people do not inevitably get sick or die because the economy has faltered. Fiscal policy, it turns out, can be a matter of life or death.

How Austerity Kills - NYTimes.com

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Newsroom - Organisation for Economic Co-operation and Development

Newsroom - Organisation for Economic Co-operation and Development

The tax burden is measured by the ‘tax wedge as a percentage of total labour costs’ – or the total taxes paid by employees and employers, minus family benefits received, divided by the total labour costs of the employer. Taxing Wages also breaks down the tax burden between personal income taxes (PIT), including tax credits, and employee and employer Social Security Contributions (SSC)

Key Taxing Wages results in 2011 included:

• The highest tax wedges for single workers without children who are earning the average wage in their country were observed in Belgium (55.5%), Germany (49.8%) and Hungary and France (49.4%). The lowest tax wedges on the same basis were in Chile (7%), Mexico (16.2%) and New Zealand (15.9%) The average for OECD countries was 35.3%. (See Table 1)
• The average overall tax wedge, for those earning the average wage, increased by 0.3 percentage points between 2010 and 2011. This was largely due to PIT. Of the 26 countries where the tax wedge rose, in 18 the PIT wedge also rose, most notably in Ireland (+3.8 percentage points), Hungary (+2.4 percentage points) and Portugal (+1.4 percentage points). Falls in the overall tax burden were also primarily due to PIT changes - the largest decrease was in New Zealand where the tax wedge fell by 1.1 percentage points due to changes in the income tax rates in 2011.
• The United States was the main exception to the rule. The overall tax wedge fell by 0.9 percentage points in 2011, due to a decrease in employee social security contributions which outweighed an increase in income taxes resulting from the expiry of the temporary “Making Work Pay” non-wastable tax credit.
• The highest tax wedges for one-earner families with two children at the average wage were 42.3% for France, 40.3% for Belgium and 38.6% for Italy. New Zealand had the smallest tax wedge for these families (-1.2%), followed by Chile (7%), Ireland (7.1%) and Switzerland (8.4%). The average for OECD countries was 25.4%. (See Table 2).
• Single people in Hungary faced the biggest increase in the tax burden, but families with children enjoyed the biggest reduction due to a reform of the child tax relief scheme that changed from a tax credit to a more advantageous tax allowance in 2011.

In all OECD countries except Mexico and Chile, the tax wedge for families with children is lower than that for single individuals without children. The differences are particularly large in the Czech Republic, Luxembourg, Belgium, Germany, Hungary, Ireland, New Zealand and Slovenia.

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Government investment needed in new economies - latimes.com

Government investment needed in new economies - latimes.com

For more than three decades American venture capitalists have concentrated their activities and earned their returns in a very small number of industrial domains. In booms and in slumps, in bull markets and in bear markets, the information and communications technology and biomedical sectors together have consistently accounted for 80% of venture capital investment.

Why has it been in the world of information technology and, secondarily, biomedicine that venture capitalists have been successful? In brief: Only in these sectors did the state invest at sufficient scale in scientific research and in its translation to working technology. In over 40 years as a working venture capitalist, I learned that my colleagues and I and the entrepreneurs whom we backed were all dancing on a platform constructed by the federal government.

Let's focus on information and communications technology. National funding of the basic research that enabled the IT revolution was overwhelmingly provided by the Defense Department. The Soviet threat, crystallized in the years after 1945 and amplified by the Korean War in 1950 and the launch of Sputnik in 1957, was the context for the U.S. military's massive commitment to renewing its wartime role as the principal financier of technical research and the principal customer for the products that generated.

The scale of research and development funding was substantial. For 25 years through 1978, federal sources accounted for more than 50% of national R&D expenditures and exceeded the R&D expenditures of the other governments in the Organization for Economic Cooperation and Development combined. From microelectronics and semiconductor devices through computer hardware and software and on to the Internet, development of all of the components of digital information and communications technology reflected state policies for R&D and procurement.

There is a larger lesson here. Over some 250 years, economic growth has been driven by successive processes of trial and error and error and error: upstream exercises in research and invention, and downstream experiments in exploiting the new economic space opened by innovation. Each of these activities necessarily generates much waste along the way, such as dead-end research programs, useless inventions and failed commercial ventures. In between, the innovations that have repeatedly transformed the architecture of the market economy, from canals to the Internet, have required massive investments to construct networks whose value in use could not be imagined at the outset of deployment.

At every stage, the innovation economy depends on sources of funding decoupled from concern for economic return. As economists have long recognized, such funding will not be delivered by competitive markets. Only an active state in pursuit of politically legitimate missions — national development, national security, conquering disease — can play the required role.

Thus, from the Erie Canal to the Internet by way of the transcontinental railroads and the Interstate Highway System, the American state has played a strategic role in the deployment of the transformational technologies that have created a succession of "new economies." In disregard of this history, forces have been at work for a generation to delegitimize the state as an economic actor — even as the next new economy can already be defined in broad strokes.

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Daily Kos: No, raising the Social Security retirement age is not a good idea

Daily Kos: No, raising the Social Security retirement age is not a good idea

res ipsa loquitor - the thing speaks for itself...

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Hurricane Sandy: beware of America's disaster capitalists | Naomi Klein | Comment is free | The Guardian

Hurricane Sandy: beware of America's disaster capitalists | Naomi Klein | Comment is free | The Guardian

The prize for shameless disaster capitalism, however, surely goes to rightwing economist Russell S Sobel, writing in a New York Times online forum. Sobel suggested that, in hard-hit areas, Federal Emergency Management Agency (Fema) should create "free-trade zones – in which all normal regulations, licensing and taxes [are] suspended". This corporate free-for-all would, apparently, "better provide the goods and services victims need".

Yes, that's right: this catastrophe, very likely created by climate change – a crisis born of the colossal regulatory failure to prevent corporations from treating the atmosphere as their open sewer – is just one more opportunity for further deregulation. And the fact that this storm has demonstrated that poor and working-class people are far more vulnerable to the climate crisis shows that this is clearly the right moment to strip those people of what few labour protections they have left, as well as to privatise the meagre public services available to them. Most of all, when faced with an extraordinarily costly crisis born of corporate greed, hand out tax holidays to corporations.

The flurry of attempts to use Sandy's destructive power as a cash grab is just the latest chapter in the very long story I have called the The Shock Doctrine. And it is but the tiniest glimpse into the ways large corporations are seeking to reap enormous profits from climate chaos.

One example: between 2008 and 2010, at least 261 patents were filed or issued relating to "climate-ready" crops – seeds supposedly able to withstand extreme conditions such as droughts and floods; of these patents close to 80% were controlled by just six agribusiness giants, including Monsanto and Syngenta. With history as our teacher, we know that small farmers will go into debt trying to buy these new miracle seeds, and that many will lose their land.

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The Best of CBPP Graphs: Guideposts on the Road Back to Factville | Jared Bernstein | On the Economy

The Best of CBPP Graphs: Guideposts on the Road Back to Factville | Jared Bernstein | On the Economy

A nice collection of graphics, including this great one, from CBPP courtesy of Jared Bernstein...

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How Much Do People Pay in Taxes?

How Much Do People Pay in Federal Taxes? | pgpf.org

These top two  graphics do NOT include state and local sales tax, nor property taxes, both of which tend to be very regressive, stacking onto the left sides of these graphs very significantly. Scroll down for TOTAL tax burden.

Effective tax rates: individual income and payroll taxes combined
Percent of cash income

SOURCE: TPC, Table T12‐0018 Effective Federal Tax Rates by Cash Income Percentile; 2011, February 2012. Compiled by PGPF.
NOTE: *Individual income tax rates for the lowest and second lowest quintiles are negative and are netted against the payroll tax rate. A quintile is one fifth of the population. Calculations assume that employees also pay the employer portion of payroll taxes in the form ofreduced wages. The breaks are (in 2011 dollars): 20% $16,812; 40% $33,542; 60% $59,486; 80% $103,465; 90% $163,173; 95%$210,998; 99% $532,613; 99.9% $2,178,886.

Effective tax rates: income, payroll, corporate and estate taxes combined
Percent of cash income

SOURCE: TPC, Table T12‐0018 Effective Federal Tax Rates by Cash Income Percentile; 2011, February 2012. Compiled by PGPF.
NOTE: *Individual income tax rates for the lowest and second lowest quintiles are negative and are netted against the payroll tax rate. A quintile is one fifth of the population. Calculations assume that employees also pay the employer portion of payroll taxes in the form ofreduced wages. The breaks are (in 2011 dollars): 20% $16,812; 40% $33,542; 60% $59,486; 80% $103,465; 90% $163,173; 95% $210,998; 99% $532,613; 99.9% $2,178,886.

Total tax burden, from the Center for Tax Justice, via the NY Times Economix Blog:

Federal individual income tax rates for married couples, filing jointly, 2012

Taxable Income		Marginal Tax Rate	Income Tax Owed
Over	But not over
$0	$17,400	10%	10% of taxable income
$17,400	$70,700	15%	10% x $17,400 = $1,740 plus 15% x income over $17,400
$70,700	$142,700	25%	$1,740 + 15% x (70,700 ‐17,400) = $9,735 plus 25% x income over $70,700
$142,700	$217,450	28%	$9,735 + 25% x (142,700 ‐ 70,700) = $27,735 plus 28% x income over $142,217
$217,450	$388,350	33%	$ 27,735 + 28% x ( 217,450 ‐ 142,700) = $ 48,665 plus 33% x income over $217,450
$388,350		35%	$48,665 + (388,350 – 217,450) = $105,062 plus 35% x income above $388,350

SOURCE: Joint Committee on Taxation, Overview Of The Federal Tax System As In Effect For 2012 (JCX 18‐12), February 24, 2012.

But note that these tax rates, particularly the top marginal rate are incredibly low in historical context, as are the tax burden on the wealthiest:

 

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A 20-Year Low in U.S. Carbon Emissions - NYTimes.com

A 20-Year Low in U.S. Carbon Emissions - NYTimes.com

For everyone with those yard signs saying "Stop the war on coal - fire Obama"

The war on coal is being fought by basic economics - cheaper, more efficient natural gas is kicking coal's butt. Obama has nothing to do wiuth it and neither would Romney.

Energy-related carbon dioxide emissions in the United States from January through March were the lowest of any recorded for the first quarter of the year since 1992, the federal Energy Information Administration reports.

The agency attributed the decline to a combination of three factors: a mild winter, reduced demand for gasoline and, most significant, a drop in coal-fired electricity generation because of historically low natural gas prices. Whether emissions will continue to drop or begin to rise again, however, remains to be seen, experts said Friday.

“While this is a positive step, we shouldn’t just say, ‘Oh, we’ve got plenty of natural gas, we can just switch to that, problem solved,’ and move on,” said Jay Apt, the director of the Carnegie Mellon Electricity Industry Center, who was not involved in compiling the study.

Carbon dioxide emissions from energy consumption totaled 1.34 billion metric tons in the first quarter, down nearly 8 percent from a year earlier, the Energy Information Administration said.

Although natural gas is a more efficient fossil fuel than coal, burning it still produces carbon dioxide emissions. One of its strengths is that it produces more kilowatts of power than the equivalent amount of coal and it provides more energy for each carbon dioxide molecule emitted into the atmosphere. This so-called carbon efficiency is a crucial factor that allows scientists to project carbon dioxide emissions, with more efficient energy sources contributing less to climate change than the more inefficient sources.

Coal-fired electric power generation puts out about twice the amount of carbon dioxide — around 2,000 pounds for every megawatt hour generated — than electricity generated by burning natural gas. But that is still about 1,100 pounds per megawatt hour for electricity from natural gas. Scientists suggest the United States needs to reduce emissions to around 350 to 400 pounds per megawatt hour to stabilize atmospheric concentrations.

The extraction of large natural gas deposits in the Marcellus Shale has contributed to the rise of inexpensive natural gas, causing prices to decline in the last four years and making it a far cheaper option than burning coal. In 2005, coal accounted for half of all electricity generated in the country. But the embrace of natural gas, which now accounts for about 30 percent of electricity generation, has caused coal’s share to retreat to 34 percent, a 40-year low.

Additionally...

A November 2010 EIA report on power plant operating costs  — the latest data available — found that a typical coal-fired plant costs $2,800 to $3,200/kilowatt of generation capacity, while a modern natural gas-fired plant costs around $1,000/kilowatt.

Combine significantly cheaper fuel costs and leaner operating costs, and electricity from a convention coal fired plant costs 9.5 cents/per kilowatt hour to produce, compared with 6.6 cents at a conventional modern gas plant, according to EIA's Energy Outlook 2011.

-------------------

Of the nation's 600 coal-fired power plants — roughly 44 percent of U.S. power generation capacity — most are in the Midwest, with Ohio, Indiana, Pennsylvania and Illinois home to half of them. Some of those states also happen to be home to the Marcellus shale formation.

The attraction of natural gas comes at a time many coal-fired plants have reached the end of their life span.

According to DB Climate Advisors and the Electric Power Research Institute, an industry lab and think tank, nearly 60gw of coal-fired generation assets are antiquated, some of it up to 80 years old.

"They should have been put out of their misery long ago," says DB's Fulton.

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What if Medicare’s drug benefit was more like the VA’s? | The Incidental Economist

What if Medicare’s drug benefit was more like the VA’s? | The Incidental Economist

Medicare’s inability to negotiate program-wide prices and tighten plan formularies is in stark contrast to the VA, which negotiates directly with drug manufacturers and is not bound by the same formulary rules as Part D plans. That’s why the VA has been able to implement a national formulary more restrictive than those of Medicare plans and obtains lower drug prices. If Medicare plans could implement VA-like formularies and obtain commensurately lower prices, our paper shows that enough could be saved to compensate beneficiaries for the loss of choice, with savings to spare.

To repeat, the key findings are:

• The VA pays 40% less than Medicare plans for prescription drugs.

• Medicare plans cover about 85% of the most popular 200 drugs on average (ranging from a low of 68% to a high of 93%).

• The VA’s national formulary includes 59% of the most popular 200 drugs.

• If Medicare obtained the same drug prices as the VA, it would save $510 per beneficiary per year or a total of $14 billion per year (2009 prices).

• If Medicare plans tightened formularies to the level of generosity available from the VA (59% of top 200 drugs covered), beneficiaries would lose $405 of value per year associated with the loss of choice of drugs. (The right way to interpret this is that the average beneficiary would be precisely indifferent between the loss of drug choice and $405 dollars in cash.)

• Because the savings ($510 per beneficiary) exceeds the loss of value to beneficiaries ($405), they could, in principle, be made whole with $105 left over (= $510 – $405).

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Everything Obama has done — and wants to do — on taxes in one post

Everything Obama has done — and wants to do — on taxes in one post

The centrality of tax policy to the 2012 election raises the question: What has actually changed in the tax code since Obama took office?

Three of the big bills of Obama’s tenure — the American Recovery and Reinvestment Act (or the stimulus act), the Affordable Care Act, and the Bush tax cuts reauthorization/payroll tax cut deal from 2010 — contain most of the changes that have been passed since January 2009. Let’s run through them, bill by bill. Keep in mind, of course, that Congress writes the laws, and the bills that actually passed only somewhat reflect Obama’s priorities.

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Bob Cesca: Repeat After Me: Obama Cut the Deficit and Slowed Spending to Lowest Level in 50 Years

Bob Cesca: Repeat After Me: Obama Cut the Deficit and Slowed Spending to Lowest Level in 50 Years

As I've documented before, the CBO reported in January, 2009 that the federal budget deficit for that fiscal year, which began on October 1, 2008, was already $1.2 trillion. President Obama's additional '09 spending added another $200 billion to the deficit, bringing the total to $1.412 trillion. Unprecedented and huge, but given the enormity of the financial crisis and the depth of the recession, there weren't many other options on the table. Add two wars into the mix and there you go.

But since then, deficit spending has dropped precipitously. Why? Chiefly because President Obama signed the Statutory Pay-As-You-Go Act in February, 2010, which mandates that new spending be offset with spending cuts or new revenue. Yes, a Democratic president and a Democratic Congress passed this legislation. Guess how many congressional Republicans voted for the law. Zero. Not one. Perhaps during this week's debate, Vice President Biden could ask Rep. Paul Ryan who voted against the bill.

Consequently, the president is responsible for the lowest government spending growth in 60 years, according to the Wall Street Journal's Market Watch.

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