by Iain Murray
Liberal involvement with traditional religion has been falling for 20 years. In 1988, the last full year of Ronald Reagan’s presidency, Pew found that as many white evangelical Protestants identified themselves as Democrat as Republican—33 percent each. By 2004, only 22 percent of such Protestants identified themselves as Democrats, compared to 43 percent as Republicans. Among Roman Catholics, affiliation with the Democratic Party fell from 41 percent as recently as 1994 to just 28 percent in 2004.
Human nature abhors a religious vacuum. The number of people who do not believe in any kind of higher power is small indeed. Other than the handful you might find at a gathering of nuclear physicists or Marxist historians, in general, people feel the need to answer to some higher power.
Just as environmentalism has replaced Marxism as the central economic theory of the far Left, so too has environmentalism begun to replace liberal Christianity as the Left’s motivating religious force. Were it not for the presence of powerful African American Protestant churches in the liberal alliance, environmentalism might have supplanted liberal Christianity already.
The causality works both ways: The environmental movement has taken on facets of religion. The movement’s increasingly religious tone has attracted those who are thirsty for spiritual gratification yet averse to traditional religions.
There are two dominant mythical forces in the cosmologies of ancient Indo-European religions: the Weather God (Zeus, Jupiter, Thor) and the Earth Mother (Gaia, Ceres, Freya). The Weather God resides in the sky and lashes down rain, hail, and thunder on those who anger him. The Earth Mother gives her faithful followers her bounty, but when they fail her in some way, she retaliates with famine. Frequently, the two are married.
Today, both the Weather God and Earth Mother are central to the global warming issue. The atmosphere is to be protected at all costs, its avatar appeased by the closing of power stations and shutting down of internal combustion engines. Thus, his hurricanes are to be averted and his beneficent winds are to drive turbines. Moreover, the Earth is to be worshipped by returning to her simpler ways, with people shunning biotechnology and nuclear power. She will reward them.
Who makes up the rank and file of the clergy, the hedge priests as it were? That is where the Internet comes in. The role of a priest is to reveal mysteries, to soothe the faithful. No one fits this description better these days than bloggers. When some new scientific finding comes out which challenges their worldview, the blogs vigorously defend the creed.
Take, for example, last December’s release of a report by Sen. James Inhofe (R-Okla.) that chronicled how no fewer than 400 academics working in the field of climate analysis had cast doubt during the year on the theory of man-made climate catastrophe. Despite the fact that the paper reported the researchers’ own words, the bloggers acted to discredit the study and reassure the faithful that their creed stood unchallenged.
Taking their cue from The Goracle, whose office condemned the report on the grounds that, “twenty-five or thirty of the scientists may have received funding from Exxon Mobile [sic] Corp,” DeSmogBlog was first into the fray, calling the report “bunk.” It contended that the list was made up of “deniers-for hire.” Forced to concede that many names were not on the usual environmental enemies list, the blog simply asserted that, “It seems fair to assume that this, too, is an ideologically driven document with no merit whatsoever, either as a piece of research or, even more laughably, a reliable comment on science.”
Next up was Grist magazine, where Andrew Dessler dismissed the report with a wave of his priestly hand. He said that the report “provides a long list of names of people who disagree with the consensus, and I have no doubt that many on this list are indeed skeptics. The question is: does their opinion matter? Should you revise your views about climate change accordingly? Considering the source, I think we all know the answer to that.” Dessler observed that physicist Freeman Dyson had made the list, but that just as you would not take a sick child to Dyson to heal, so too would you not take a sick planet to him either. The fact that no one has ever been in the business of healing planets does not matter.
The American Prospect’s blog simply contended that Sen. Inhofe’s staff were “still tirelessly plugging away at global warming denialism,” blaming the messenger rather than confronting the arguments of the 400 academics. The blog also called the report “false” and “blatantly misleading.” Former Clinton administration appointee Joseph Romm characterized the study as “recyc[ling] unscientific attacks on global warming.” When New York Times environment correspondent Andrew Revkin, one of the few reporters to even-handedly cover the global warming debate, mentioned the Inhofe study on his blog, Romm slammed him for legitimizing it, calling Revkin’s coverage “amazing.” Romm went on to suggest that Freeman Dyson was not a serious scientist, which is a bit like saying Tiger Woods isn’t a good golfer.
The report was released on December 21, 2007. These many reactions were posted and disseminated to the faithful by December 22. No one needed to read the report to make up his mind. The priesthood did it for us.
Iain Murray (firstname.lastname@example.org) is Director of Projects and Analysis and Senior Fellow in Energy, Science, and Technology at CEI. This article is excerpted from his new book The Really Inconvenient Truths: Seven Environmental Catastrophes the Liberals Don’t Want You to Know About—Because they Helped Cause Them.
The Conspiracy to Deny the Poor Mobility—and Opportunity
by Ivan Osorio
Mobility is prosperity— a fact humans have recognized since towns arose along navigable waterways. Yet this simple fact seems to evade many pundits, environmental activists—and even screenwriters.
One of the most reprehensible hours in TV history is the fourth episode of “The Lone Gunmen,” the short-lived “X-Files” spinoff about three conspiracy-mongering oddballs who investigate government skullduggery and publish their findings in a newsletter. This episode involved a cover-up, by oil companies of course, of a car that runs on water. At the end of the show the three Gunmen find the car’s prototype and test it—and find that it works!
But rather than thwart Big Oil’s machinations, they decide to keep the car’s existence under wraps, lest too many people acquire such a cheap and easy form of transportation, which would lead to an environmental catastrophe. Of course, this is functionally the same as what the oil companies did. But the Gunmen do it to save the poor from themselves, rather than for grubby profit, so it’s okay. Life imitated art last January, when India’s Tata Motors unveiled the Nano, the world’s cheapest car, which will retail for about $2,500, putting inexpensive transportation within reach of millions—but don’t tell green activists.
“There is this mad rush towards lowering the prices to achieve mass affordability [emphasis added],” Anumita Roychoudhury of the Centre for Science and Environment (CSE) in New Delhi told Britain’s Observer newspaper. “If vehicle ownership increases very rapidly, we’ll have a time bomb ticking away. When you lower the price that drastically, how will you be able to meet the safety and emissions standards?”
In what universe is “mass affordability” of a useful product a bad thing? The same crazy conspiracy world the Lone Gunmen inhabit. Thankfully, most people don’t live there. As the Observer notes, “These concerns are of little interest to millions of Indians who aspire to owning a car.” However, some green activists and pundits do live in such a world—and are out to tell hundreds of millions of Indians what is best for them.
New York Times columnist Thomas Friedman reacted to the Nano with a hysterical call: “No, No, No, Don’t Follow Us.” Of course, “us” is the industrialized West and the place to not follow is access to one’s own wheels.
But Friedman recognizes that won’t be enough. Approvingly citing Sunita Narain, director of CSE, he says that, “India can’t ban a $2,500 car, but it can tax it like crazy [emphasis added] until it has a mass transit system that can give people another cheap mobility option.” Narain told Friedman, apparently with a straight face, “I am not fighting the small car. I am simply asking for many more buses and bus lanes.” In what world is taxing something “like crazy” not fighting it?
Advocates of the Nano have no sympathy for such views. Indian business writer Vivek Sharma says bluntly that Friedman and other critics of the Tata Nano are “barking up the wrong tree and some of their arguments are elitist and discriminatory.” “The less affluent cannot be denied the safety and comfort of a cheap four-wheeled vehicle only because the existing infrastructure will come under further strain,” says Sharma. Sharma also notes that Tata has too good a reputation to protect to cut corners on safety, and that many of the Nano’s potential buyers today are riding scooters, which are less safe than any enclosed car.
Moreover, notes Barun Mitra of India’s Liberty Institute, “[A]s more Indians learn to drive, the appreciation of basic road rules and etiquettes will improve, as drivers begin to realize that the purpose of the rules are not to hinder movement, but to facilitate it.” Mitra adds that greater mobility could help relieve congestion over the long term by allowing lower-density development, and that would encourage the building of new—and upgrading of existing—infrastructure. But that involves building, which the greens hate.
Sharma remarks, “Oh! Shouldn’t his critics be happier if the car becomes costlier and beyond the reach of its target customers!” Sadly, they would be. And unlike the fictional water-powered car cover-up, the losses from thwarting the Nano would be quite real.
A version of this article originally appeared in TCSDaily.com
How the Community Reinvestment Act Hampers Access to Credit
by Michelle Minton
For nearly 30 years, American banks have lived under the burden of the Community Reinvestment Act (CRA), passed in the belief that banks systematically engaged in discriminatory lending.
In 1976, Congress passed the Housing and Mortgage Disclosure Act (HMDA), which required most lending institutions to publicly disclose their lending practices. The resulting data showed relatively low levels of investment in poorer neighborhoods, convincing lawmakers that banks engaged in redlining. As a result, legislators approved the CRA the following year.
The Act requires banks and thrifts to make loans throughout their entire market, operate depository facilities in certain neighborhoods, and collect data about their lending records. Federal supervisory agencies were then to use CRA ratings in deciding whether to approve mergers and acquisitions.
The Act exempts credit unions, which are insured by the National Credit Union Administration. Credit unions, by definition, limit their membership to people who share a “common bond,” which historically has been defined as working, worshipping, or attending school at the same place. Therefore, in theory a credit union could not “disinvest” in the only people to whom it could lend.
Yet some legislators want to extend the CRA to credit unions. House Financial Services Chairman Barney Frank (D-Mass.) told the National Association of Federal Credit Unions that he favored legislation loosening restrictions on credit unions’ field of membership and net worth standards, while reexamining their CRA exemption.
Since the legislation’s passage, lending to low and middle income residents has increased dramatically. CRA proponents cite this as evidence of the Act’s success, but this phenomenon is not likely the result of the CRA alone. While lending to low income borrowers and residents of low and middle income neighborhoods grew at a faster rate than that for middle and high income borrowers, lending increased across the board. Other factors, such as deregulation and new technologies, likely contributed to the increase as much as, or more than, the CRA.
Moreover, the original assumptions that led to the Act’s passage were based on deeply flawed data. Clifford Rossi and Fred Phillips-Patrick of the Offi ce of Thrift Supervision demonstrate that the models used to interpret the original data in the 1970s were inconclusive at best and misleading at worst. Rossi and Phillips-Patrick note that the “single-model” equations like those used to evaluate the original HMDA data do not tell the entire story about credit fl ows because they cannot account for supply and demand within neighborhoods.
Furthermore, even more sophisticated models do not clearly demonstrate discrimination because, as researchers Andrew L. Holmes and Paul Horvitz noted in a study on alleged redlining practices, individual credit histories appear to explain the results just as well. Banks most likely did what lenders have always done and continue to do: avoid risk. However, until the 1970s, information technology was unsophisticated, credit histories were not widely available, and lending data was expensive to collect. Additionally, lenders could rarely accurately assess the value of the properties used as collateral because, until the 1970s, appraisals were almost exclusively limited to higher-value homes.
Thus, lenders could have appeared to be discriminating simply by using their very limited information, including residence in a lower income neighborhood, to decide whether a loan was too risky to make. New technologies and statistical methods have eliminated the need to rely on such often arbitrary presumptions.
While the CRA has had few, if any, positive effects, it definitely has negatively affected lenders and borrowers alike.
Increased Risk. Jeffrey W. Gunther, in a Cato Institute study, compares bank CRA ratings to CAMELS ratings—a formula used by bank regulators based on capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risks. He found the better a lender’s CRA rating, the worse was its CAMELS rating.
Increased Costs for Small Lenders. Complying with the CRA imposes costs in addition to writing riskier loans. The burden is especially heavy on small lenders that might compete directly with credit unions, which are exempt from the Act. A 1992 survey of 445 small banks found that CRA compliance cost 4.5 percent of their pre-tax income and, on average, 0.25 percent of their total assets.
The Act also has created opportunities for rent seeking by political activists, which creates financial and logistical burdens on all lenders. The latter must spend money, time, and resources on documentation, PR, and other compliance costs.
Groups like the Association of Community Organizations for Reform Now (ACORN), aware that even small delays in regulatory approval can impose substantial financial losses on financial institutions, have been exploiting the CRA for years. For example, Chase Manhattan and J.P. Morgan donated hundreds of thousands of dollars to ACORN around the time that they applied for permission to merge.
The Community Reinvestment Act has not encouraged productive investment in lower income neighborhoods. Setting aside the question of the appropriateness of government telling private banks and thrifts where to lend, Congress should repeal the Act based on its ineffectiveness alone.
Short of eliminating the law, legislators should reduce its scope. For instance, regulators should exempt small banks from the Act to level the playing field with credit unions. Any reduction in the total regulatory burden on financial services in the United States would allow the free market to better meet the credit needs of lower income Americans.
Finally, policy makers should consider other strategies to increase the availability of fi nancial services. Allowing credit unions to add underserved markets to their field of membership would be a modest step to encourage an increased flow of credit to low income communities.
The intentions behind the Community Reinvestment Act may have been good, but as a tool to improve the flow of credit the law has been a bust. Congress should repeal the CRA and focus on eliminating regulatory barriers to the provision of credit to all Americans.
Michelle Minton (email@example.com) is a policy analyst at CEI. This article is based on her CEI OnPoint, “The Community Reinvestment Act’s Harmful Legacy: How It Hampers Access to Credit.”
by Wayne Crews
As Democrats and Republicans in Congress group-hug over their $150 billion smoke-and-mirrors redistributionist “stimulus” package, the federal budget deficit is now projected to top $400 billion. Spending straddles the $3 trillion mark, the bulk of it going to America’s entitlement, health, and defense budget bonanzas. The same government that claims the new “stimulus” legislation will boost the economy already spends over 20 percent of this nation’s $13 trillion annual economic output.
A drop in this big bucket, the stimulus bill represents a nervous exercise to avoid blame in November and obscure the fact that a recession, if it comes, must be ridden out—if not now, then in the coming months or years, when the readjustments could be even more painful. But by then, of course, the economic pain will be other politicians’ problem.
Members of both parties opportunistically blame markets for an impending recession while ignoring the real culprit: the regulatory leviathan that government has become. Like the presidential working group now contemplating new oversight of mortgage markets, the “solution” is always to expand state authority, imposing new controls on businesses and entrepreneurs.
Blaming the private sector makes bipartisanship easy. The supposed stimulus will have little real effect and betray no principles since Congress recognizes few boundaries on its power anyway. Indeed, politicians promise even more “stimulus” if the current go round doesn’t work.
The financial markets blamed in the ongoing credit meltdown are already regulated top to bottom. Politicians rarely mention this or the fact that the Federal Reserve has manipulated money, credit, and interest rates for close to a century. (Indeed, any true free market in money and credit is generations away, but that’s another story.) But we should allow today’s partially free financial market to function rather than subject it to even more political intervention.
There is one silver lining. The call for new regulations highlights the need to reconsider regulation comprehensively in the context of stimulating economic growth and wealth creation. A new Small Business Administration (SBA) initiative called Regulatory Review and Reform exemplifi es just the kind of re-thinking that’s needed.
Reducing the accumulated impact of 70,000 annual pages of new regulations—in a Washington incapable of cutting spending—offers real stimulus opportunities. Pruning the regulatory superstate would increase returns to investors and offer struggling entrepreneurs greater prospects that risky new ventures would succeed.
That assurance would be welcome. Economist Mark Crain estimates compliance costs for health, safety, environmental, and economic regulations at over $1.1 trillion—more than one-third the level of federal spending itself. Regulatory costs exceed all U.S. corporate pretax profits ($1.06 trillion in 2004), estimated individual income taxes ($998 billion in 2006), and corporate income taxes ($277 billion). Combine regulation and spending, and the federal government’s share of the economy tops 29 percent.
Sixty-plus federal departments, agencies, and commissions are now at work on nearly 4,000 more rules. Of these, agencies report that well over 100 are “economically significant”—that is, they will cost at least $100 million (and often far more), while nearly 800 are expected to affect small businesses. So much for the supposed national stimulus policy. In fact, we have a ball-and-chain policy.
SBA’s list of the top 10 rules requiring reform is a good start. But it’s only a start: Recent regulatory proposals cover everything from trans fat labeling to the controversial airline passenger screening system; from myriad auto and Labor Department safety standards to energy efficiency mandates for anything with an exhaust pipe.
A Deregulatory Stimulus package would create a more favorable environment for business development and wealth creation by (1) freezing enactment of new non-essential rules, (2) reconsidering the regulatory state as a whole and implementing a bipartisan package of cuts, and (3) instituting a permanent “sunsetting” process of ongoing rule reviews and purges.
Congress should start by repudiating the slate of crippling energy regulations already enacted (as well as rejecting those being proposed this election year).
But such an initiative, though a good start, is not enough. Voters need to hold Congress accountable for agency rule-making. Only congressmen, not bureaucrats, are elected. The latter lack any incentive to police themselves, so they rarely acknowledge that the regulations they implement could create more costs than benefits. By delegating lawmaking power to agencies, Congress bears prime responsibility for regulatory growth. Sound public policy requires giving the responsibility back to Congress and requiring elected representatives to affi rm new major rules, after considering their costs, before they become effective.
America’s long-term economic health results far more from minimal regulation than from any short-term fiscal stimulus. We badly need better control of the fiscal state—but just as badly we need to rein in the regulatory state. The federal budget itself didn’t hit $1 trillion, the regulatory state’s current perch, until 1987. Look at outlays now. Stimulus, indeed. It’s time to really stimulate the economy by freeing up the American people.
Wayne Crews (firstname.lastname@example.org) is Vice President for Policy at CEI. He is author of the report Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State and the recent report Still Stimulating Like It’s 1999: Time to End Bipartisan Collusion on Economic Stimulus Packages.
by Steven J. Milloy
Food riots caused by rising food prices have erupted around the world. Five people died in uprisings in Haiti, perhaps the first of many casualties to come from the fad of being “green.”
Food riots also broke out in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia. The military is being deployed in Pakistan and Thailand to protect fields and warehouses. Higher energy costs and policies promoting the use of biofuels such as ethanol are being blamed.
“When millions of people are going hungry, it’s a crime against humanity that food should be diverted to biofuels,” an Indian government official told The Wall Street Journal. Turkey’s finance minister labeled the use of biofuels as “appalling,” according to the paper.
Biofuels have turned out to be a lose-lose-lose proposition. Once touted by the greens and the biofuel industry as being able to reduce the demand for oil and lower greenhouse gas emissions, biofuels have accomplished neither goal and have no prospect for accomplishing either in the foreseeable future.
The latest research shows that biofuels actually increase greenhouse gas emissions on a total lifecycle basis. Add in that taxpayer-subsidized diversion of food crops and food crop acreage to fuel production has contributed to higher food prices and reduced food supply, and biofuels turn out to be nothing less than a public policy disaster.
The situation is not likely to get any better any time soon, as cutting the farm subsidies and tariffs on sugar cane-based ethanol imports that have fueled the ethanol craze seems to be yet another third rail of U.S. politics.
Biofuel proponents hope the reliance on food crops to produce biofuels is temporary, and they point to a future where non-food biomass (such as corn stalks and grasses) is used to produce so-called cellulosic ethanol.
But in addition to the fact that the technology for producing cellulosic ethanol on a cost-effective basis is nowhere near ready for prime time, the greenhouse gas footprint of cellulosic ethanol likely will be far worse than that of corn-based ethanol.
It’s one thing to transport relatively compact corn kernels to be processed into ethanol; it’s quite another to transport bulky biomass. The bulk problem would require a multitude of cellulosic ethanol plants to be built around the country—a project that could be quite costly and difficult to locate given the phenomenon of NIMBY-ism and the problem of plant emissions making it more difficult for states to comply with federal air quality standards.
States that don’t meet those standards don’t get their much-needed federal highway funds. Food riots are only the tip of the green iceberg. We might also expect energy riots to erupt one day.
The world has an ever-growing population that needs more and more energy, but the greens are doing everything they can to constrict the world’s energy supply.
As the Sierra Club campaigns to shut down our coal-fired electricity capabilities, the Natural Resources Defense Council campaigns to prevent nuclear power from taking its place. The demise of coal-fired power and the blockage of increased nuclear power will increase the demand for supply constraints on, and the prices for, natural gas.
But then again, environmental advocacy group Earth First perhaps is helping to alleviate the looming natural gas crisis by campaigning against power plants that use the fuel. In a recent campaign against a South Florida power plant, an Earth First campaigner stated that the environment ought not be threatened “so that people can fuel their greedy energy desires.” “Just say ‘no’ to electricity,” seems to be the bottom line of eco-think.
Even wind power is becoming more and more politically incorrect. Environmentalist-friendly Maryland Governor Martin O’Malley recently announced that wind farms will not be allowed on state lands because they are eyesores.
Considering eco-activist Robert F. Kennedy Jr.’s long-standing opposition to a wind farm off the coast of his family’s Hyannis Port compound as well as environmentalist concerns that wind farms kill wild birds, it seems that the future of wind power is uncertain.
The environmentalist effort to tie our energy policy in knots already is producing results. The availability of electricity in the Washington, D.C., area is so fragile that Maryland officials already are planning for summertime rolling blackouts starting in 2011.
In California, officials are so concerned that a recent state legislative proposal would have provided local utilities the power to control thermostats in new homes and businesses. Although this effort failed, it’s not that hard to imagine that, one day, all homes will have their electrical use controlled by local utilities—no doubt run by your local green energy czars.
Millions in the developing world have died and continue to do so from the greens’ campaign against pesticides such as DDT. Nothing less should be expected from their new campaign that threatens global food and energy production.
Steven J. Milloy is an adjunct fellow at CEI. This article originally appeared on FoxNews.com.
The Good, the Bad, and the Ugly
Greenland Not About to Disappear
In his movie, An Inconvenient Truth, Al Gore conjures up several potential disasters threatening to overwhelm humankind. Naturally, global warming was the culprit in all of them. Gore’s proposed solution is to shut down the world economy.
Life isn’t quite so bleak. For instance, Gore warned that Greenland’s ice mass could break off into the ocean. At issue is the impact of moulins, or meltwater descending in vertical tunnels to the bottom of the ice. They do accelerate glacial movement, but only marginally.
CEI’s Marlo Lewis points to a new study reported in the journal Science. Explain the researchers: “Surface-melt-enhanced basal lubrication has been invoked periodically as a feedback that would hasten the Greenland Ice Sheet’s demise in a warming climate. Our results show that several fast-flowing outlet glaciers, including Jakobshavn Isbrae, are relatively insensitive to this process… Our results thus far suggest that surface-melt enhanced lubrication will have a substantive but not catastrophic effect.” Poor Al, now the Greenland Ice Sheet is against him!
Destroying the American Auto Industry
Reality rarely has much impact on policy making in Washington, and Corporate Average Fuel Economy (CAFE) standards are no exception. CAFE mandates automakers to improve the mileage of their fleets, with no regard for technological feasibility—or safety. Last year Congress voted to increase CAFE standards. In late April the Department of Transportation issued a new timetable for hiking CAFE.
Yet no mandate will overcome CAFE’s many problems. For one thing, the federally mandated program leads to more highway deaths due to its downsizing effect on cars. A 2001 National Academy of Sciences study found that CAFE contributes to between 1,300 and 2,600 deaths every year. CAFE also raises new vehicle prices and restricts consumer choice. And while politicians enacted the standards in 1975 in an effort to reduce the amount of oil Americans use, that hasn’t happened. Higher fuel standards actually lead to people driving more. Yet none of this seems to matter in Washington.
Ethanol Starves the World's Poor
Sen. Hillary Clinton (D-N.Y.) once complained about the “sweetheart deal” of providing “subsidies on top of subsidies on top of subsidies.” But today, both Republicans and Democrats have jumped on the ethanol bandwagon. Biofuels are supposed to deliver energy independence to America, but instead, they’re exacerbating hunger among the world’s poor.
Of course, if you dramatically increase the demand for a product—such as corn—you likely will dramatically increase the price. Which means, ta dah!, higher food prices, which affect the poor the most. The Washington Post recently reported: “More than 100 million people are being driven deeper into poverty by a ‘silent tsunami’ of sharply rising food prices, which have sparked riots around the world and threaten U.N.-backed feeding programs for 20 million children, the top U.N. food official said.”
Government subsidized ethanol, observes CEI’s Iain Murray, “was once just a boondoggle.” Now it’s a catastrophe.