OECD Study Admits Income Taxes Penalize Growth, Acknowledges that Tax Competition Restrains Excessive Government
Daniel J. Mitchell
I have to start this post with a big caveat.
I’m not a fan of the Paris-based Organization for Economic Cooperation and Development. The international bureaucracy is infamous for using American tax dollars to promote a statist economic agenda. Most recently, it launched a new scheme to raise the tax burden on multinational companies, which is really just a backdoor way of saying that the OECD (and the high-tax nations that it represents) wants higher taxes on workers, consumers, and shareholders. But the OECD’s anti-market agenda goes much deeper.
- The OECD has allied itself with the so-called Occupy movement to push for bigger government and higher taxes.
- The OECD, in an effort to promote redistributionism, has concocted absurdly misleading statistics claiming that there is more poverty in the United States than in Greece, Hungary, Portugal, or Turkey.
- The OECD is pushing a “Multilateral Convention” that is designed to become something akin to a World Tax Organization, with the power to persecute nations with free-market tax policy.
- The OECD supports Obama’s class-warfare agenda, publishing documents endorsing “higher marginal tax rates” so that the so-called rich “contribute their fair share.”
- The OECD advocates the value-added tax based on the absurd notion that increasing the burden of government is good for growth and employment.
Now that there’s no ambiguity about my overall position, I can admit that the OECD isn’t always on the wrong side. Much of the bad policy comes from its committee system, which brings together bureaucrats from member nations.
The OECD also has an economics department, and they sometimes produce good work. Most recently, they produced a report on the Swiss tax system that contains some very sound analysis, including a rejection of Obama-style class warfare and a call to lower income tax burdens.
Shifting the taxation of income to the taxation of consumption may be beneficial for boosting economic activity (Johansson et al., 2008 provide evidence across OECD economies). These benefits may be bigger if personal income taxes are lowered rather than social security contributions, because personal income tax also discourages entrepreneurial activity and investment more broadly.
I somewhat disagree with the assertion that payroll taxes do more damage than VAT taxes. They both drive a wedge between pre-tax income and post-tax consumption. But the point about income taxes is right on the mark.
Evidence also suggests that tax autonomy may lead to a smaller and more efficient public sector, helping to limit the tax burden and improve tax compliance… Efficiency-raising effects of tax autonomy and tax competition on the public sector have also been reported in empirical research with Norwegian and German data… Tax autonomy generates opportunities to choose the level of public service provision and taxation, although in practice such “voting with your feet” seems mostly limited to young, highly educated and high-income households. Decentralised tax setting also fosters benchmarking of the performance of jurisdictions belonging to the same government level by voters, even in the absence of “voting with your feet”.
The report also notes that tax competition has reduced corporate tax rates.
Tax competition is likely to have contributed significantly to lowering corporate tax rates in Switzerland over the past 25 years. Indeed, empirical evidence shows that the responsiveness of sub-national governments to tax changes of other subnational governments (“tax mimicking”) is the strongest in the case of corporate taxation (Blöchliger and Pinero Campos, 2011). …Progressive corporate income taxes harm incentives for businesses to grow. Since growing businesses are likely to be high performers in terms of productivity, such disincentives are likely to hit high-performing businesses the most, with losses to aggregate productivity performance, which has been modest in Switzerland relative to best-performing high-income countries.
P.S.: This isn’t the first time the economists at the OECD have broken ranks with the political hacks that generally control the bureaucracy. In a 1998 Economic Outlook (see page 166) they wrote that “the ability to choose the location of economic activity offsets shortcomings in government budgeting processes, limiting a tendency to spend and tax excessively.” And in another publication (see page 1), the economists noted that “legal tax avoidance can be reduced by closing loopholes and illegal tax evasion can be contained by better enforcement of tax codes. But the root of the problem appears in many cases to be high tax rates.” These passages sound like they could have been authored by Pierre Bessard!
P.P.S.: I hasten to add that none of this justifies handouts from American taxpayers to the Paris-based bureaucracy any more than occasional bits of rationality from the World Bank (on government spending), IMF (on the Laffer Curve), or United Nations (also on the Laffer Curve) justify subsidies to those organizations.
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Michael F. Cannon
Today’s New York Times ”Room for Debate” feature poses the question, “Do the mixed results of an Oregon health care study show that government medical insurance should provide only catastrophic coverage?” From my contribution:
ObamaCare aims to cover 16 million poor uninsured adults through Medicaid, plus 16 million higher-income uninsured Americans through government-subsidized “private” insurance. Supporters portrayed these “reforms” as a matter of life and death, particularly for the poor. Yet a monumental new study finds that “Medicaid coverage generated no significant improvements in measured physical health outcomes” for poor adults. These findings strengthen the case that states should stop implementing ObamaCare, and Congress should swiftly repeal it…
The absence of physical-health improvements indicts the entire enterprise. Supporters have an obligation to show that the $2 trillion in entitlements ObamaCare will launch next year would actually improve enrollees’ health. The Oregon study shows they cannot meet their burden of proof. What part of “no discernible improvement” don’t they understand?
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Conservative and libertarian scholars are clashing over the findings and political implications of the new Heritage Foundation immigration study. The study spans 92 pages and is jam-packed full of statistics and detailed calculations.
I’ll leave the immigration policy to my colleagues who are experts in that area. To me, the study provides a very useful exploration into how massive the American welfare state has become. Here are some highlights:
- “There are over 80 of these [means-tested] programs which, at a cost of nearly $900 billion per year, provide cash, food, housing, medical, and other services to roughly 100 million low-income Americans.”
- “The governmental system is highly redistributive … For example, in 2010, in the whole U.S. population, households with college-educated heads, on average, received $24,839 in government benefits while paying $54,089 in taxes … [and] households headed by persons without a high school degree, on average, received $46,582 in government benefits while paying only $11,469 in taxes.”
- “Few lawmakers really understand the current size of government and the scope of redistribution. The fact that the average household gets $31,600 in government benefits each year is a shock.”
Total federal, state, and local government spending in 2010 was $5.4 trillion, or $44,932 per U.S. household. The figure of $31,600 in “benefits” is total spending less spending on public goods, interest, and government pensions.
A useful feature of the Heritage study is a breakdown of the $5.4 trillion in spending into six categories constructed by the authors. “Direct benefits” includes mainly Social Security and Medicare. “Pure public goods” includes programs such as defense and scientific research. “Population-based services” includes programs aimed at whole communities, such as police and highways. (Some of these also seem to be public goods). “Means-tested benefits” includes programs such as food stamps. Education includes both K-12 and college subsidies. “Interest and pensions” is the current costs of past spending, which includes servicing the debt and paying for government pensions. The chart shows spending in 2010.
This spending breakdown is useful for thinking about the proper size of government. From a libertarian standpoint, governments ought to be spending only on public goods and population-based services, as a first cut. That would be $1.94 trillion, or just 36 percent of the current total of $5.4 trillion. As a percent of GDP in 2010, that would be spending of 14 percent, rather than current spending of 38 percent.
But some of the population-based services mentioned by the authors could be privatized, and spending on some of the public goods could be cut. So a good libertarian target might be less than 36 percent of current spending, or less than 14 percent of GDP.
The Heritage study is sparking a debate about what type of immigration reform the nation should have. But hopefully, it will also spur more discussion about the massive size of the American welfare state. Immigration is partly, or mainly, such a contentious issue because we have such a huge welfare state.
The study includes projections about how many trillions of dollars of government benefits will flow to immigrants and their children in the decades ahead. But conservatives and libertarians agree that we ought to cut trillions of dollars in benefits to immigrants and nonimmigrants alike.
So is there some common ground here? Can we work toward an immigration reform that cuts government dependency in general and downsizes the welfare state?
View full post on Cato @ Liberty
Michael F. Cannon
Today, the nation’s top health economists released a study that throws a huge “STOP” sign in front of ObamaCare’s Medicaid expansion.
The Oregon Health Insurance Experiment, or OHIE, may be the most important study ever conducted on health insurance. Oregon officials randomly assigned thousands of low-income Medicaid applicants – basically, the most vulnerable portion of the group that would receive coverage under ObamaCare’s Medicaid expansion – either to receive Medicaid coverage, or nothing. Health economists then compared the people who got Medicaid to the people who didn’t. The OHIE is the only randomized, controlled study ever conducted on the effects of having health insurance versus no health insurance. Randomized, controlled studies are the gold standard of such research.
Consistent with lackluster results from the first year, the OHIE’s second-year results found no evidence that Medicaid improves the physical health of enrollees. There were some modest improvements in depression and financial strain–but it is likely those gains could be achieved at a much lower cost than through an extremely expensive program like Medicaid. Here are the study’s results and conclusions:
We found no significant effect of Medicaid coverage on the prevalence or diagnosis of hypertension or high cholesterol levels or on the use of medication for these conditions. Medicaid coverage significantly increased the probability of a diagnosis of diabetes and the use of diabetes medication, but we observed no significant effect on average glycated hemoglobin levels or on the percentage of participants with levels of 6.5% or higher. Medicaid coverage decreased the probability of a positive screening for depression [by 30 percent], increased the use of many preventive services, and nearly eliminated catastrophic out-of-pocket medical expenditures…
This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.
As one of the study’s authors explained to me, it did not find any effect on mortality because the sample size is too small. Mortality rates among the targeted population – able-bodied adults 19-64 below 100 percent of poverty who aren’t already eligible for government health insurance programs – are already very low. So even if expanding Medicaid reduces mortality among this group, and there is ample room for doubt, the effect would be so small that this study would be unable to detect it. That too is reason not to implement the Medicaid expansion. This is not a population that is going to start dying in droves if states decline to participate.
There is no way to spin these results as anything but a rebuke to those who are pushing states to expand Medicaid. The Obama administration has been trying to convince states to throw more than a trillion additional taxpayer dollars at Medicaid by participating in the expansion, when the best-designed research available cannot find any evidence that it improves the physical health of enrollees. The OHIE even studied the most vulnerable part of the Medicaid-expansion population – those below 100 percent of the federal poverty level – yet still found no improvements in physical health.
If Medicaid partisans are still determined to do something, the only responsible route is to launch similar experiments in other states, with an even larger sample size, to determine if there is anything the OHIE might have missed. Or they could design smaller, lower-cost, more targeted efforts to reduce depression and financial strain among the poor. (I propose deregulating health care.) This study shows there is absolutely no warrant to expand Medicaid at all.
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Outbreak: Frightening H7N9 Study: “Authorities Should Definitely Be Alarmed and Get Prepared for the Worst-Case Scenario”
April 25th, 2013
While U.S. Center for Disease Control and Prevention director Tom Frieden suggests there is no cause for panic over the H7N9 influenza strain and says that Americans, “go about their daily lives,” this unusually dangerous virus has concerned officials at the CDC to such an extent that they are rapidly working to develop an effective vaccine in the event it makes its way to North America.
According to the World Health Organization, the H7N9 bird flu virus is one the most lethal influenza strains ever identified. The first case appeared in China in late February and has since spread to scores of others, with at least 109 cases having been reported to WHO thus far, 22 of which have resulted in death. This amounts to a kill rate of 20%. These are laboratory confirmations, so in all likelihood there are hundreds, perhaps thousands, of others who may be infected with the virus that haven’t received medical attention.
In the last 24 hours officials in Taiwan confirmed the first case of the virus outside of China. The patient was originally hospitalized on April 12, but confirmation of the virus did not come until nearly two weeks later, suggesting that the official numbers and the reality on the ground are starkly different.
Moreover, as reported by WHO, half of the H7N9 cases identified are individuals who have had no prior contact with poultry.
If true, this would be strong evidence that H7N9 has already achieved “human-to-human transmission,” turning it into a “nightmare influenza” that might already be spreading across the population.
That status is not proven yet, however, and more observation is needed before such a conclusion could be substantiated.
“If H7N9 were to stably adapt to humans, it would probably meet with little or no human immunity,” writes Peter Horby from Nature.com. “Detecting and tracking a partially human-adapted H7N9 virus in a city as vast as Shanghai or Beijing would be difficult; tracking a fully adapted virus would be impossible. And it could easily spread nationally and internationally.”
Source: Natural News
While transmission between humans is not yet confirmed, the South China Morning Post cites a frightening study that suggests the virus is mutating at an alarming rate:
The new bird flu could be mutating up to eight times faster than an average flu virus around a protein that binds it to humans, a team of research scientists in Shenzhen says.
Dr He Jiankui, an associate professor at South University of Science and Technology of China, said yesterday that the authorities should be alarmed by the results of their research and step up monitoring and control efforts to prevent a possible pandemic.
“It happened in just one or two weeks. The speed may not have caught up with the HIV, but it’s quite unusual for a flu.”
The fast mutation makes the virus’ evolutionary development very hard to predict. “We don’t know whether it will evolve into something harmless or dangerous,” He said. “Our samples are too limited. But the authorities should definitely be alarmed and get prepared for the worst-case scenario.“
It’s impossible for the general public to know how this virus has mutated. Government officials in China are not sharing any specific details, and as noted, there are significant delays between the time a patient enters the hospital and when the virus is confirmed as H7N9.
Furthermore, if this virus has become transmittable by way of human to human contact it’s likely that government officials, in an effort to prevent panic, will wait as long as possible before they disseminate information to the public.
There is not much we can do unless we know it’s coming. The evidence thus far indicates the virus is continuing to spread. We really don’t know if it has gone human-to-human, and we may not know until it’s too late.
The Chinese study cited above suggests that authorities start preparing for a worst-case scenario.
We suggests individuals do the same and take steps now to prepare for a pandemic.
Stay up to date with information as it becomes available. If it’s confirmed that humans can pass this to each other, then avoid densely populated areas, especially schools, sporting events or any public gatherings. A 20% kill rate is not something to gamble with, so avoiding external human contact should this go critical is key to survival.
With the ease of travel across the globe, it won’t take long at all for this virus to appear in every major city on the planet.
The Black Death wiped out nearly one-third of Europe’s population in the mid 1300?s (incidentally, this plague reportedly started in China). The Spanish Flu infected half a billion people across the globe and killed upwards of 50 million in the early 1900?s.
It’s only a matter of time before the next mass pandemic makes its way across the world, and all of our technological advancements and modern day implements will be powerless to stop it.
Statistics: Posted by yoda — Thu Apr 25, 2013 9:41 pm
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Daniel J. Mitchell
I’m very leery of corporate tax reform, largely because I don’t think there are enough genuine loopholes on the business side of the tax code to finance a meaningful reduction in the corporate tax rate.
That leads me to worry that politicians might try to “pay for” lower rates by forcing companies to overstate their income.
Based on a new study about so-called corporate tax expenditures from the Government Accountability Office, my concerns are quite warranted.
The vast majority of the $181 billion in annual “tax expenditures” listed by the GAO are not loopholes. Instead, they are provisions designed to mitigate mistakes in the tax code that force firms to exaggerate their income.
Here are the key findings.
In 2011, the Department of the Treasury estimated 80 tax expenditures resulted in the government forgoing corporate tax revenue totaling more than $181 billion. …approximately the same size as the amount of corporate income tax revenue the federal government collected that year. …According to Treasury’s 2011 estimates, 80 tax expenditures had corporate revenue losses. Of those, two expenditures accounted for 65 percent of all estimated corporate revenues losses in 2011 while another five tax expenditures—each with at least $5 billion or more in estimated revenue loss for 2011—accounted for an additional 21 percent of corporate revenue loss estimates.
Sounds innocuous, but take a look at this table from the report, which identifies the “seven largest corporate tax expenditures.”
To be blunt, there’s a huge problem in the GAO analysis. Neither depreciation nor deferral are loopholes.
I wrote a detailed post explaining depreciation earlier this month, citing three different experts on the issue. But if you want a short-and-sweet description, here’s how I described depreciation in my post on corporate jets.
If a company purchases a jet for $20 million, they should be able to deduct – or expense – that $20 million when calculating that year’s taxable income… A sensible tax system defines profit as total revenue minus total costs – including purchases of private jets. But today’s screwy tax code forces them to wait five years before fully deducting the cost of the jet (a process known as depreciation). Given that money today has more value than money in the future, this is a penalty that creates a tax bias against investment (the tax code also requires depreciation for purchases of machines, structures, and other forms of investment).
In other words, businesses should be allowed to immediately “expense” investment expenditures. What the GAO refers to as “accelerated depreciation” is simply the partial mitigation of a penalty, not a loophole.
The same is true about “deferral.” Here’s what I wrote about that issue in February 2010.
Under current law, the “foreign-source” income of multinationals is subject to tax by the IRS even though it already is subject to all applicable tax where it is earned (just as the IRS taxes foreign companies on income they earn in America). But at least companies have the ability to sometimes delay when this double taxation occurs, thanks to a policy known as deferral.
I added to those remarks later in the year.
From a tax policy perspective, the right approach is “territorial” taxation, which is the common-sense notion of only taxing activity inside national borders. It’s no coincidence that all pro-growth tax reform plans, such as the flat tax and national sales tax, use this approach. Unfortunately, America is one of the world’s few nations to utilize the opposite approach of “worldwide” taxation, which means that U.S. companies face the competitive disadvantage of having two nations tax the same income. Fortunately, the damaging impact of worldwide taxation is mitigated by a policy known as deferral, which allows multinationals to postpone the second layer of tax.
Simply stated, the U.S. government should not be trying to tax income earned in other countries. “Deferral” is the mitigation of a penalty, not a loophole.
So why would the GAO make these mistakes? Well, to be fair to the bureaucrats, they simply relied on the analysis of the Treasury Department.
But why does Treasury (and the Joint Committee on Taxation) make these mistakes? The answer is that they use the “Haig-Simons” tax base as a benchmark, and that approach assumes bad policies such as the double taxation of income that is saved and invested. If you want to get deep in the weeds of tax policy, I shared late last year some good analysis on Haig-Simons produced by my colleague Chris Edwards.
By the way, properly defining loopholes also is an issue for reform on the individual portions of the tax code. I’ve previously pointed out the flawed analysis of the Tax Policy Center, which put together a list of the 12 largest “tax expenditure” and included six items that don’t belong.
To conclude, the right tax base is what’s called “consumed income.” But that’s simply another way of saying that the system should only tax income one time, and it’s how income is defined for both the flat tax and national sales tax.
One final comment about GAO. It’s understandable that they used the Treasury Department’s methodology, but they also should have produced a list of tax expenditures based on a consumed-income tax base. That’s basic competence and fairness.
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There are indications that The Heritage Foundation may soon release an updated version of its 2007 report, “The Fiscal Cost of Low-Skill Immigrants to the U.S. Taxpayer,” by Robert Rector. That 2007 report’s flawed methodology produced a grossly exaggerated cost to federal taxpayers of legalizing unauthorized immigrants while undercounting or discounting their positive tax and economic contributions – greatly affecting the 2007 immigration reform debate.
Before releasing its updated report, I urge the Heritage Foundation to avoid the same serious errors that so undermined Mr. Rector’s 2007 study. Here is a list of some of its major errors:
- Count individuals, not households. Heritage counts household use of government benefits, not individual immigrant use. Many unauthorized immigrants are married to U.S. citizens and have U.S. citizen children who live in the same households. Counting the fiscal costs of those native-born U.S. citizens massively overstates the fiscal costs of immigration.
- Employ dynamic scoring rather than static scoring.  Heritage’s report relies on static scoring rather than dynamic scoring, making the same mistake in evaluating the impact of increased immigration on welfare costs that the Joint Committee on Taxation makes when scoring the impact of tax cuts. Instead, Heritage should use dynamic scoring techniques to evaluate the fiscal effects of immigration reform. For example, Heritage should assume that wages and gross domestic product are altered considerably because of immigration policy reforms. In contrast to that economic reality, immigrant wages, gross domestic product, and government welfare programs are unrealistically static in Mr. Rector’s study. His study largely ignores the wage increases experienced by immigrants and their descendants over the course of their working lives, how those wages would alter after legalization, and the huge gains in education amongst the second and third generation of Hispanics. Heritage is devoted to dynamic scoring in other policy areas – it should be so devoted to it here too.
- Factor in known indirect fiscal effects. The consensus among economists is that the economic gains from immigration vastly outweigh the costs. In 2007, Mr. Rector incorrectly noted that, “there is little evidence to suggest that low-skill immigrants increase the incomes of non-immigrants.” Immigrants boost the supply and demand sides of the American economy, increasing productivity through labor and capital market complementarities with a net positive impact on American wages. Heritage should adjust its estimates to take account of the positive spill-overs of low-skilled immigration.
- Assume that wages for legalized immigrants would increase – dramatically. Heritage did not assume large wage gains for unauthorized immigrants after legalization. In the wake of the 1986 Reagan amnesty, wages for legalized immigrants increased – sometimes by as much as 15 percent – because legal workers are more productive and can command higher wages than illegal workers. Heritage should adopt similar wage increases to estimate the economic effects of immigration reform if it were to happen today.
- Assume realistic levels of welfare use. Vast numbers of immigrants will return to their home countries before collecting entitlements, the “chilling effect” whereby immigrants are afraid of using welfare reduces their usage of it, and immigrants use less welfare across the board. 100 native-born adults eligible for Medicaid will cost the taxpayers about $98,000 a year. A comparable number of poor non-citizen immigrants cost approximately $57,000 a year – a 42 percent lower bill than for natives. For children, citizens cost $67,000 and non-citizens cost $22,700 a year – a whopping 66 percent lower cost. Heritage should adjust its estimates of future immigrant welfare use downward. 
- Use latest legislation as benchmark. The current immigration plan, if rumors are to be believed, would stretch a path to citizenship out for 13 years. Most welfare benefits will be inaccessible until then, so Heritage’s report must take that timeline into account.
- Remittances do not decrease long term consumption. Remittances sent home by immigrants will eventually return to the U.S. economy in the form of increased exports or capital account surpluses. Heritage should recognize this aspect of economic reality rather than assuming remittances are merely a short-term economic cost.
- Factor in immigration enforcement costs. Heritage did not compare costs of legalization and guest workers to the costs of the policy status quo or increases in enforcement. The government spends nearly $18,000 per illegal immigrant apprehension while the economic distortions caused by forcing millions of consumers, renters, and workers out of the U.S. would adversely affect income and profitability.
- Use transparent methodology. Heritage’s methodology should replicate that of the National Research Council’s authoritative and highly praised – even by immigration restrictionists – study entitled The New Americans. That study is the benchmark against which all efforts at generational fiscal accounting – including Heritage’s 2007 report – are measured. If Heritage deviates from their methods, it should explain its methodology in a clear and accessible way that states why they altered practice.
- Don’t count citizen spouses. Heritage counted U.S.-born spouses of unauthorized immigrants as fiscal costs. Counting the net immigrant fiscal impact means counting immigrants and perhaps their children at most, not native-born spouses who would be on the entitlement roles regardless of whether they married an immigrant or a native-born American.
- Suggest changes to the welfare state. Heritage has elsewhere called low-skill migrant workers “a net positive and a leading cause of economic growth” and accurately reported that “[t]he consensus of the vast majority of economists is that the broad economic gains from openness to trade and immigration far outweigh the isolated cases of economic loss.” Instead of arguing against low-skill immigration, Mr. Rector should instead suggest reforms that would, in the words of Cato’s late Chairman Bill Niskanen, “build a wall around the welfare state, not around the country.”
It is imperative that the economic costs and benefits of increased immigration be studied using proper methods and the most recent data. A previous report by the Heritage Foundation in 2006 entitled, “The Real Problem with Immigration … and the Real Solution,” by Tim Kane and Kirk Johnson roundly rejected the negative economic assessments of Mr. Rector’s 2007 study. Not only does Mr. Rector not speak for the broad conservative movement; it appears that economists who have worked for the Heritage Foundation also disagree with Mr. Rector’s conclusions.
For decades, the Heritage Foundation has been an influential intellectual force in conservative circles. Its economic analyses have been predicated on consideration of the dynamic effects of policy changes as opposed to static effects. Unfortunately, Mr. Rector’s past work has not been consistent in this regard, employing the same static scoring conservatives have traditionally distrusted in other policy areas.
Many conservatives rely on the Heritage Foundation for accurate research about immigration’s impact on the economy. Before releasing another study assessing the net fiscal impacts of immigration reform, Heritage should correct the errors outlined above to guarantee the most accurate information on this important topic is available.
 Borjas and Katz, “The Evolution of the Mexican-Born Workforce in the United States,” in Mexican Immigration to the United States¸NBER Book, May 2007, Lewis, “Immigrants-Native Substitutability: The Role of Language Ability,” NBER Working Paper 17609, forthcoming in David Card and Stephen Raphael, eds., Ottaviano and Peri, “Rethinking the Effects of Immigration on Wages,” Journal of the European Economic Association, 2012. Peri and Sparber, “Task Specialization, Immigration, and Wages,” American Economic Journal: Applied Economic, 2009, Peri and Sparber, “Highly-Educated Immigrants and Native Occupational Choice,” Centre for Research and Analysis of Migration Discussion Paper Series No. 13/08, November, 2008.
 Amuedo-Dorantes, Bansak, and Raphael, “Gender Differences in the Labor Market: Impact of IRCA,” American Economic Review, 2007, Rivera-Batiz, “Undocumented Workers in the Labor Market: An Analysis of Earnings of Legal and Illegal Mexican Immigrants in the United States,” Journal of Population Economics, 1999, Kossoudji and Cobb-Clark, “IRCA’s Impact on the Occupational Concentration and Mobility of Newly-Legalized Mexican Men,” Journal of Population Economics, 2000, Kossoudji and Cobb-Clark, “Coming Out of the Shadows: Learning about Legal Status and Wages from the Legalized Population,” Journal of Labor Economics, 2002, Baker, “Effects of the 1986 Immigration Reform and Control Act on Crime,” SSRN Working Paper, 2011.
 This advice is based on praise of those methods by the Center for Immigration Studies, a restrictionist think-tank in Washington, D.C.: Camarota, “The High Cost of Cheap Labor: Illegal Immigration and the Federal Budget,” Center for Immigration Studies, August 2004.
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Recent news reports have missed a major item on Afghanistan. Last week, the Independent reported on an internal study from the British government’s Ministry of Defence (MoD). The study, obtained under the Freedom of Information Act, examines the “extraordinary number of similar factors that surround both the Soviet and Nato campaigns in Afghanistan.”
The study finds that despite their differences:
Both interventions have been portrayed as foreign invasions attempting to support a corrupt and unpopular central government against a local insurgent movement which has popular support, strong religious motivation and safe havens abroad. In addition, the country will again be left with a severely damaged and very weak economic base, heavily dependent upon external aid.
It goes on:
The highest-level parallel is that both campaigns were conceived with the aim of imposing an ideology foreign to the Afghan people: the Soviets hoped to establish a Communist state while Nato wished to build a democracy,” it says. “Equally striking is that both abandoned their central aim once they realised that the war was unwinnable in military terms and that support of the population was essential. [Emphasis added.]
In a questionable comment that one would expect a U.S. official to utter, the British government website states “We are in Afghanistan to protect our own national security by helping the Afghans take control of theirs.” The internal study, of course, comes to a contrary conclusion: “The military parallels are equally striking; the 40th Army [of the Soviet Union] was unable decisively to defeat the mujahedin while facing no existential threat itself, a situation that precisely echoes the predicament of Isaf [the Nato-led security mission].”
To learn more about the international community’s inability to rescue Afghanistan—and why the international community made that grandiloquent pledge in the first place—register for the Cato Institute policy forum on Friday, April 5th , “The war in Afghanistan: What Went Wrong?” I will host Washington Post reporter Rajiv Chandrasekaran, the RAND Corporation’s Ambassador James Dobbins, and West Point Professor and COIN critic Colonel Gian Gentile to discuss America’s longest war.
View full post on Cato @ Liberty
New Study Shows 59% of “Tuna” Sold in the U.S. Isn’t Tuna
Posted on March 1, 2013
This is just the latest revelation in the stealth inflation and food fraud theme I have written about frequently in recent months. The non-profit group Oceana took samples of 1,215 fish sold in the U.S. and genetic tests found that that 59% of those labeled tuna were mislabeled. It seems that “white tuna” should be avoided in particular as “84% of fish samples labeled “white tuna” were actually escolar, a fish that can cause prolonged, uncontrollable, oily anal leakage.” Oh and if you live in my hometown of New York City, you should pay particular attention:
Big Apple has big problem with seafood fraud: 94 percent of tuna and more than three quarters of sushi samples in New York City mislabeled.
Of the 142 fish samples collected in New York, 39 percent were mislabeled. New York City led the nation with the highest occurrence of mislabeled salmon as well as the highest amount of fraud among salmon collected from grocery stores and restaurants.
Statistics: Posted by yoda — Sun Mar 03, 2013 12:35 pm
View full post on opinions.caduceusx.com
Patrick J. Michaels and Paul C. "Chip" Knappenberger
Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”
Today’s global media are ablaze with coverage of newly reported scientific findings purporting to show that anthropogenic global warming is leading to more extreme weather events such as heat waves, forest fires, and floods.
The findings are being made available in the early releases section of the Proceedings of the National Academy of Sciences (PNAS) and represent the work of a group of researchers from the Potsdam Institute for Climate Impact Research (PIK)—an institute which can be routinely counted on to produce rather alarming climate change studies. The new analysis, led by Vladimir Petoukhov, is no exception.
The researchers examined the trends in the daily patterns of air flow in the lower atmosphere and found that some patterns had become more persistent with time—a characteristic that leads to a slowdown in the forward motion of weather systems. Or as the researchers put it in their press release, “What we found is that during several recent extreme weather events these planetary waves almost freeze in their tracks for weeks.” To make sure you understand the implications, they added “Since many ecosystems and cities are not adapted to this, prolonged hot periods can result in a high death toll, forest fires, and dramatic harvest losses.”
While climate alarm plays well in the media, what doesn’t play so well is climate-as-normal.
Case and point: there are zero media stories about a similarly timed study purporting to show that any anthropogenic global warming influence on extreme weather events is too small to be reliably detected.
This study, available in the early-release section of the journal Geophysical Research Letters, was performed by the research team of James Screen and Ian Simmonds of the University of Melbourne. Screen and Simmons examined the trends in the daily patterns of air flow in the lower atmosphere and found little significant change. They note that “the changes in meridional amplitude over recent decades are relatively small compared to the year-to-year variability” and “that possible connections between [anthropogenic global warming] and planetary waves, and the implications of these, are sensitive to how waves are conceptualized.” They cautiously conclude that “[t]he contrasting meridional and zonal amplitude trends have different and complex possible implications for midlatitude weather, and we encourage further work to better understand these.”
[Layman’s translation: There are few significant changes in north-to-south extent of jet stream troughs or their forward speed. The data are so noisy that results are highly dependent upon what analytical method is chosen. The contrasting north-south and east-west changes in jet stream troughs have multiple influences that we haven’t sorted out yet, but it would be foolish to tie them to global warming at this time.]
So there are two different research teams studying the same issue; one screams that global warming is killing us, while the notes that the situation is complicated and requires additional study, and that it is difficult to relate any observed changes to global warming.
Such an example provides a perfect picture of how the media influences public opinion about science.
A large number of people will be exposed to the news that scientists are reporting that global warming is leading to more severe weather. This will be the majority opinion, as few folks are inclined to dig deeper than a sound byte or a single paragraph.
Virtually no one will be exposed to the scientific finding that the influence of global warming on severe weather is largely lost in the noise of the complex influences of a number of other factors.
And so the story of global warming science in the public eye grows asymmetrically, with alarming evidence receiving far more exposure than evidence for more modest changes and impacts, or, situation-as-normal findings.
We’re not blaming the media. While they have a clearly demonstrable bias, that’s just a convenient assist to their prime motivation: selling more ad space. The end-of-the-world-as-we-know-it always sells better than business-as-usual.
Where the science really needs to gets sorted out and fairly considered is in the summary “science assessment” reports that form the basis for policy (or lack thereof). Consider the document “Global Climate Change Impacts in the United States,” published by the U.S. Global Change Research Program (you can find it here).
As our work at the Cato Institute’s Center for the Study of Science plainly reveals, the representativeness of the science included in many government assessment reports is no better than it is in the popular media (you can find our companion report to the above-mentioned government report here).
Alarm not only sells papers, but also amps up the regulatory state.
Petoukhov, V., et al., 2013. Quasi-resonant amplification of planetary waves and recent Northern Hemisphere weather extremes. Proceedings of the National Academy of Sciences (Early Edition), doi:10.1073/pnas.1222000110
Screen, J.A., and I. Simmonds, 2013. Exploring the links between Arctic amplification and mid-latitude weather. Geophysical Research Letters, in press, doi: 10.1002/GRL.50174
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