By James D. Agresti
November 24, 2014
In articles and columns touting the virtues of solar energy, a chorus of reporters and pundits are claiming that solar panels produce electricity for about the same cost as fossil fuels. These individuals are also declaring that because of this, solar energy will soon provide a major portion of the world’s electricity.
However, official government data from the U.S., Germany, and the International Energy Agency show that solar energy is far more costly than fossil fuels. Furthermore, even if governments continue to mandate and subsidize solar while penalizing competing technologies, solar is on track to supply only 1.2% of the world’s electricity by 2040.
This has important implications for the vast majority of people in the world, because energy costs critically affect standards of living, particularly for the poor and middle class.
Benefits and costs
The primary benefit of solar and other renewable energy sources is that they emit a fraction of the pollutants and greenhouse gases of fossil fuels. Hence, for decades governments have been enacting regulations and taxes that charge consumers for the environmental impacts of energy sources. As explained in a 1992 report by the U.S. Energy Information Administration (EIA):
The effort to deal with environmental concerns has become a central feature of Federal energy policy. Substantial costs which were formerly outside the market mechanism have, through the implementation of a series of taxes and regulations, been internalized to energy markets.
Nonetheless, it is often impossible to assign objective dollar figures to these environmental impacts, and thus, some argue that fossil fuels are overtaxed and overregulated, while others say just the opposite.
For instance, when the New York Times conducted an analysis of corporate taxes and found that large oil companies pay an average effective corporate income tax rate of 37% as compared to 29% for other large corporations, the Times added “some economists argue that the high rates do not cover the pollution costs imposed on society.”
More significantly, the costs imposed on fossil fuels by energy regulations far exceed the costs of taxes levied upon them. Even before the regulatory growth of the past two decades, EIA reported, “There are so many Government regulations concerning energy that it is difficult to identify and analyze all of them.”
Despite all this, fossil fuels are still generally less expensive than green alternatives like solar, wind, and biodiesel. In fact, EIA has projected that by 2018, newly built commercial solar capacity will still be more than twice the cost of new natural gas capacity. Furthermore, as detailed below, these projections are based on assumptions that make the cost of solar seem much lower than reality.
Until recently, renewable energy advocates candidly admitted that “going green” will require economic sacrifices. For example, a 2011 report of the United Nations Framework Convention on Climate Change stated that the costs of cutting greenhouse gases “can carry an economic sting,” and “people are going to have to make difficult choices and take painful steps” to stem global warming. Likewise, in 2008, Barack Obama stated this under his plan to address climate change, “electricity rates would necessarily skyrocket.”
However, polls have shown that even though the vast majority of Americans favor green energy, most are not willing to pay a premium for it. For example, only 7% of utility customers are willing to pay an extra 20% for energy from renewable sources. This leaves green energy proponents in a tough position, because the energy sources they are promoting are at least 20% more expensive than their fossil fuel equivalents—and sometimes much more. Faced with these circumstances, many environmentalists and green energy investors have resorted to misrepresenting the costs of these energy sources.
How much does solar cost?
According to Los Angeles-based green energy supporter Robert Hunziker, the cost of solar-generated electricity is now “on a Levelised Cost of Energy (LCOE) competitive basis with conventional energy.” Likewise, Vivek Wadhwa, the director of research at the Center for Entrepreneurship and Research Commercialization at Duke, declares that “by 2020, solar energy will be price-competitive with energy generated from fossil fuels on an unsubsidized basis in most parts of the world.”
Contrasting those unsupported assertions with actual data from EIA, the levelized cost of newly built commercial-scale solar energy will be $144 per megawatthour by 2018. This is 2.2 times more than the $66 cost of electricity from new natural gas capacity, and 44% more than the $100 cost of new coal capacity.
Moreover, rooftop solar systems, which comprise most of the solar capacity in the U.S., are more costly than utility-scale solar systems. To quote the National Renewable Energy Laboratory, “rooftop PV [photovoltaic solar] is expensive compared to large-scale, ground-mounted systems.” This is mostly because larger systems benefit from economies of scale.
Furthermore, when calculating levelized costs, EIA uses certain assumptions that have the effect of skewing the results in favor of solar. For example, EIA’s cost figures:
- are computed by assuming that all types of generation capacity have a 30-year financial life. However, solar panels have an expected life of 20-30 years, while nuclear, coal, hydropower, and natural gas power plants commonly last for 60 years or more.
- do not account for the fact that electricity generated by wind and solar is generally less valuable than electricity from fossil fuels. This is because wind turbines only spin when the wind is blowing, and solar panels only produce when the sun is shining. Such discontinuous sources of capacity must be backed up by technologies that can produce a steady stream of power, like fossil fuels and nuclear. These added expenses are not reflected in EIA’s levelized costs.
In sum, even under these solar-friendly estimates and numerous regulations and taxes imposed upon fossil fuels, the costs of utility-scale solar are far higher than that of natural gas and coal. The situation is even worse for rooftop solar, the most common source of solar.
Such hard realities are precisely why Google has abandoned its Renewable Energy Cheaper than Coal (RE<C) project, which was launched “to develop renewable energy sources that would generate electricity more cheaply than coal-fired power plants do.” In a recent article by two Google engineers who worked on this initiative, they write that RE<C was “Google’s boldest energy move,” and the company committed “significant resources” to launching it in 2007, but:
By 2011, however, it was clear that RE<C would not be able to deliver a technology that could compete economically with coal, and Google officially ended the initiative and shut down the related internal R&D projects.
The engineers also tacitly confess to being hoodwinked by the type of rhetoric debunked above:
At the start of RE<C, we had shared the attitude of many stalwart environmentalists: We felt that with steady improvements to today’s renewable energy technologies, our society could stave off catastrophic climate change. We now know that to be a false hope—but that doesn’t mean the planet is doomed.
The engineers still believe that global warming may “take a terrible toll on civilization” but have concluded that “trying to combat climate change exclusively with today’s renewable energy technologies simply won’t work.” In other words, wind and solar are hopelessly inadequate for this goal. Thus, Google is redirecting its efforts to developing a game-changing technology like nuclear fusion.
But what about Germany?
Green energy supporters often point to Germany as proof that solar can economically generate large amounts of electricity. For example, Amit Ronen, director of George Washington University’s Solar Institute, affirms, “The German experience shows that with motivated leaders and the right policies, even a country with relatively poor solar resources and a large industrial base can reliably and affordably integrate high levels of solar energy into their electricity mix.”
Likewise, the Richard Dawkins Foundation has published a headline declaring that “Germany Now Produces Half Of Its Energy Using Solar” (Hat tip: Robert Wilson). Beneath this headline is a meme that says “I F#I&ING LOVE Science,” and beneath that is the disclosure that Germany does not produce half of its energy from solar. Instead, Germany did this on a certain day at a certain time when the country’s electricity needs were low because of a public holiday.
In reality, only 4.5% of Germany’s electricity came from solar in 2013. This single-digit contribution along with another 7.9% from wind has come at an enormous cost. In the words of a 2014 New York Times article on Germany’s clean-energy programs, the nation’s consumer energy prices “have nearly doubled in the past decade, including taxes and subsidies for clean energy projects that now account for roughly half of households’ energy bills.”
More specifically, data from the International Energy Agency shows that the average consumer cost for a megawatthour of electricity in Germany during 2011 was $351.955 or three times the U.S. cost of $117.837. Unsurprisingly, the same Times article reports “there is growing concern among leaders in Berlin that they may be stretching the limits of what citizens are willing to bear.”
The human toll
In October 2014, Bloomberg News published an article claiming that “solar will be the world’s biggest single source of electricity by 2050, according to a recent estimate by the International Energy Agency.”
In truth, IEA said no such thing. Instead, the IEA Secretariat estimated that solar could be world’s biggest source of electricity if governments subsidized and mandated it more aggressively. IEA’s press release stresses that this estimate does “not represent a forecast.”
An actual government forecast for solar energy is presented in EIA’s latest International Energy Outlook. According to this, under current laws and regulations, solar will supply only 1.2% of the world’s electricity in 2040, as compared to 36% for coal, 24% for natural gas, 16% for hydroelectric, and 14% for nuclear.
Those figures are based on the assumption that governments will keep propping up solar and holding back fossil fuels. These actions are not without costs, because every extra dollar that is used to build a solar panel rather than a more cost-effective option is a dollar that cannot be used for food, shelter, clothing, healthcare, or any other purpose.
That may not have much of an impact on those who have money to spare, but the global median household wealth is only $3,650, and 1.2 billion people live on less than $1.25/day. For these individuals, affordable energy can mean the difference between prosperity and poverty, or life and death. As explained in the textbook Introduction to Air Pollution Science, “The availability of affordable electric power is essential for public health and economic prosperity.”
The economics of energy greatly affect almost every material element of modern human life, from the costs of food and internet access to wage levels and unemployment. Hence, it behooves every thinking person to critically weigh the pros and cons of different energy technologies and the government policies that affect them.
All too often, journalists, pundits, and educators emphasize the environmental benefits of renewable energy while ignoring or distorting the downsides of these technologies. That may enrich green energy investors and gratify the feelings of environmentalists, but it is a disservice to the vast majority of people whose lives are directly impacted by the real-world consequences of these matters.
By James D. Agresti
November 3, 2014
What do voters truly understand about major public policy issues that impact them? In the days leading up the 2014 elections, Just Facts commissioned a nationwide poll of likely voters to scientifically determine this.
While most polls focus on public opinion, this one measured public knowledge. The poll consisted of 20 questions—one concerning voters’ political inclinations and 19 dealing with their knowledge of policy issues.
Each question addressed a central element of a key issue, including healthcare, taxes, government spending, global warming, Social Security, energy, hunger, pollution, and the national debt. For instance, voters were asked: “On average, who would you say pays a greater portion of their income in federal taxes: The middle class or the upper 1% of income earners?”
The poll found deep partisan divides, with Democratic, Republican, and third-party voters being more or less knowledgeable depending upon the question. Overall, the majority of voters gave the correct answer to only five of the 19 policy questions. These results indicate that people may be casting ballots based upon false beliefs.
The poll was conducted by Conquest Communications Group, a professional polling firm. The responses were obtained through live telephone surveys of 500 likely voters across the continental United States on October 27-29, 2014. The margin of sampling error for all voters is plus or minus 4% with a 95% level of confidence. The margin of error for Republican voters is 7%, for Democratic voters 8%, for undecided voters 10%, and for third-party voters 19%.
The questions and results are as follows.
Question 1: The average U.S. household spends about $25,000 per year on food, housing, and clothing combined. If we broke down all combined federal, state, and local taxes to a per household cost, do you think this would amount to more or less than an average of $25,000 per household per year?
Correct Answer: Taxes are more than $25,000 per household per year. In 2013, federal, state and local governments collected a combined total of $4.4 trillion in taxes or an average of $33,006 for every household in the U.S. Correct answer given by 45% of all voters, 41% of Democratic voters, 49% of Republican voters, 50% of third-party voters, and 40% of undecided voters.
Question 2: On average, who would you say pays a greater portion of their income in federal taxes: The middle class or the upper 1% of income earners?
Correct Answer: The upper 1% of income earners. The Congressional Budget Office’s latest estimates of federal tax burdens show that households in the middle class pay an average federal tax rate of 11.5%, as compared to 29.4% for the top 1% of income earners. Correct answer given by 16% of all voters, 4% of Democratic voters, 25% of Republican voters, 29% of third-party voters, and 15% of undecided voters.
Question 3: Now, changing the subject from taxes to spending, suppose we broke down all government spending to a per household cost – do you think the combined spending of federal, state and local governments amounts to more or less than $40,000 per household per year?
Correct Answer: Government spending is more than $40,000 per household per year. In 2013, federal, state and local governments spent a combined total of $5.8 trillion or an average of $47,137 for every household in the U.S. Correct answer given by 44% of all voters, 36% of Democratic voters, 52% of Republican voters, 61% of third-party voters, and 38% of undecided voters.
Question 4: Do you think the federal government spends more money on social programs, such as Medicare, education, and food stamps – or does the federal government spend more money on national defense, such as the Army, Navy, and missile defense?
Correct Answer: Social programs. In 2013, 61% of federal spending was for social programs, versus 20% for national defense. Half a century ago, the opposite was true, and 53% of federal spending was for national defense, versus 21% for social programs. Correct answer given by 49% of all voters, 17% of Democratic voters, 61% of Republican voters, 46% of third-party voters, and 26% of undecided voters.
Question 5: What about federal government debt? The average U.S. household owes about $107,000 in consumer debt, such as mortgages and credit cards. Thinking about all federal government debt broken down on a per household basis, do you think federal debt amounts to more or less than $107,000 per U.S. household?
Correct Answer: Federal debt is more than $107,000 per household. On October 2, 2014, the federal debt was $17.9 trillion or $145,950 for every household in the U.S. Correct answer given by 70% of all voters, 62% of Democratic voters, 80% of Republican voters, 79% of third-party voters, and 67% of undecided voters.
Question 6: Over the past five years, which has grown at a faster rate, the U.S. economy or the national debt?
Correct Answer: The national debt. Over the past five years, the national debt grew by 51%, while the U.S. economy grew by 22%. Correct answer given by 83% of all voters, 68% of Democratic voters, 95% of Republican voters, 93% of third-party voters, and 84% of undecided voters.
Question 7: Would you say the earth is measurably warmer than it was 30 years ago?
Correct Answer: Yes. According to satellite measurements (and ground-level thermometers), over the past 30 years the earth’s average temperature has increased by about 0.6 to 0.9 degrees Fahrenheit, which is greater than the range of measurement uncertainty. For a point of comparison, a temperature analysis of a glacier in Greenland found that it was about 22ºF colder during the last ice age than it is now. Correct answer given by 58% of all voters, 89% of Democratic voters, 31% of Republican voters, 57% of third-party voters, and 54% of undecided voters.
Question 8: Again, thinking about the whole planet, do you think the number and intensity of hurricanes and tropical storms have generally increased over the past 30 years?
Correct Answer: No. Data published in the journal Geophysical Research Letters shows that the number and intensity of hurricanes and tropical storms is about the same as it was 30 years ago. Likewise, Christopher Landsea, a Ph.D. atmospheric scientist and hurricane specialist for NOAA, wrote in 2005, “All previous and current research in the area of hurricane variability has shown no reliable, long-term trend up in the frequency or intensity of tropical cyclones, either in the Atlantic or any other basin.” Additionally, the Intergovernmental Panel on Climate Change reported in 2012: “There is low confidence in any observed long-term (i.e., 40 years or more) increases in tropical cyclone activity (i.e., intensity, frequency, duration), after accounting for past changes in observing capabilities.” Correct answer given by 33% of all voters, 23% of Democratic voters, 54% of Republican voters, 42% of third-party voters, and 42% of undecided voters.
Question 9: Now, just thinking about the United States, in your opinion, is the air generally more polluted than it was 30 years ago?
Correct Answer: No. EPA data shows that ambient levels of criteria air pollutants have declined significantly over the past 30 years. The same is true for emissions of hazardous air pollutants. Correct answer given by 44% of all voters, 37% of Democratic voters, 53% of Republican voters, 39% of third-party voters, and 41% of undecided voters.
Question 10: If the U.S. stopped recycling and buried all of its trash for the next 100 years in a single landfill that was 30 feet high, how much of the nation’s land area would this cover? Less than 1%, 1% to less than 5%, or more than 5%?
Correct Answer: Less than 1%. At the current U.S. population growth rate and the current per-person trash production rate, the landfill would cover 0.05% of the nation’s land area. More realistically, the actual area in use will be an order of magnitude smaller, because (1) the U.S. recycles, burns, or composts 46% of its trash; (2) landfills can be more than 200 feet high; and (3) after 30-50 years, landfills are often covered and used for purposes such as parks, golf courses, ski slopes, and airfields. Correct answer given by 7% of all voters, 5% of Democratic voters, 11% of Republican voters, 7% of third-party voters, and 7% of undecided voters.
Question 11: Without government subsidies, which of these technologies is least expensive for generating electricity? Wind turbines, solar panels, or natural gas power plants?
Correct Answer: Natural gas power plants. Determining the costs of electricity-generating technologies is complex, but data from the U.S. Energy Information Administration shows that natural gas is considerably less expensive than wind, and wind is considerably less expensive than solar. Correct answer given by 42% of all voters, 31% of Democratic voters, 57% of Republican voters, 46% of third-party voters, and 29% of undecided voters.
Question 12: Without government subsidies, which of these fuels is least expensive for powering automobiles? Gasoline, ethanol, or biodiesel?
Correct Answer: Gasoline. As calculated with data from the U.S. Department of Energy and U.S. Energy Information Administration, without federal subsidies, the average nationwide retail price for ethanol in 2013 was 22% more than gasoline, and biodiesel was 41% more than gasoline. Correct answer given by 47% of all voters, 40% of Democratic voters, 44% of Republican voters, 54% of third-party voters, and 31% of undecided voters.
Question 13: Worldwide, which of these technologies generates the most electricity? Solar panels, natural gas power plants, coal power plants, or nuclear power plants?
Correct Answer: Coal power plants. Due to the low cost and widespread availability of coal, coal power plants produce about 39% of the world’s electricity, as compared to 21% for natural gas, 12% for nuclear, and 1% for solar. Correct answer given by 39% of all voters, 34% of Democratic voters, 44% of Republican voters, 50% of third-party voters, and 31% of undecided voters.
Question 14: On an average day, what portion of U.S. households with children have at least one child who experiences hunger? Less than 1%, 1% to less than 10%, or more than 10%?
Correct Answer: Less than 1%. Per the latest data from the USDA, on an average day, less than one quarter of one percent (0.24%) of households with children have a child who experiences hunger. Correct answer given by 12% of all voters, 6% of Democratic voters, 16% of Republican voters, 14% of third-party voters, and 12% of undecided voters.
Question 15: Some people say that Social Security faces financial problems because politicians have looted the program and spent the money on other programs. Do you believe that statement is true or false?
Correct Answer: False. By law, all Social Security taxes and revenues can be used only for the Social Security program, and the federal government has never failed to abide by this law. What some call “looting” is actually a legal requirement (established in the Social Security of 1935) that all of the program’s surpluses be loaned to the federal government. The government is required to pay back this money with interest, and it has been doing so since 2010. Social Security’s financial challenges stem from other factors. Correct answer given by 20% of all voters, 26% of Democratic voters, 17% of Republican voters, 14% of third-party voters, and 22% of undecided voters.
Question 16: Some policymakers are proposing that individuals be allowed to save and invest some of their Social Security taxes in personal accounts instead of paying these taxes to the Social Security program. In your view, do you think such proposals generally improve or harm the finances of the Social Security program?
Correct Answer: Improve. As shown by analyses conducted by the chief actuary of the Social Security Administration and a bipartisan presidential commission, proposals to give Social Security an element of personal ownership generally strengthen the program’s finances. Although some tax revenues that would have gone to the program instead go to people’s personal retirement accounts, these tax revenues are more than offset by the savings of not paying these individuals full benefits. Correct answer given by 23% of all voters, 10% of Democratic voters, 38% of Republican voters, 25% of third-party voters, and 15% of undecided voters.
Question 17: In 1960, governments paid for 24% of all healthcare costs in the U.S. Do you think government now pays a greater portion or a lesser portion of all healthcare costs in the U.S.?
Correct Answer: A greater portion. Between 1960 and 2009, the portion of U.S. healthcare expenses paid by government increased from 24% to 48%. Correct answer given by 59% of all voters, 50% of Democratic voters, 71% of Republican voters, 64% of third-party voters, and 54% of undecided voters.
Question 18: When health insurance copayments are high, people tend to spend less on healthcare. Does this reduced spending typically have a negative impact on people’s health?
Correct Answer: No. Multiple studies have shown that when copayments are high, people generally spend less money on their healthcare without negatively impacting their health. This is because when people directly pay for more of their healthcare bills, they are more likely to be responsible consumers and use only those services that actually benefit their health. An exception to this rule is the poorest 6% of the population, who do experience negative effects when copayments are increased. Correct answer given by 15% of all voters, 12% of Democratic voters, 19% of Republican voters, 11% of third-party voters, and 16% of undecided voters.
Question 19: In 2010, Congress passed and President Obama signed the Affordable Care Act, also known as “Obamacare.” This law uses price controls to save money in the Medicare program. Do you think these price controls will affect Medicare patients’ access to care?
Correct Answer: Yes. As explained by Medicare’s actuaries, the price controls in the Affordable Care Act will cut Medicare prices for many medical services over the next three generations to “less than half of their level under the prior law.” The actuaries have been clear that this will likely cause “withdrawal of providers from the Medicare market” and “severe problems with beneficiary access to care.” Correct answer given by 58% of all voters, 38% of Democratic voters, 74% of Republican voters, 64% of third-party voters, and 66% of undecided voters.
Question 20: In the upcoming U.S. Congressional elections, do you think you will probably vote for Democrats, Republicans, or third-party candidates?
Answers: 34% planned to vote for Democrats, 37% for Republicans, 6% for third-party candidates, 19% were unsure, and 5% declined to answer the question.
By James D. Agresti
October 21, 2014
Stan Collender, “one of the world’s leading experts on the U.S. budget and congressional budget process,” claims in his Forbes column that the federal deficit is “falling rapidly as a percent of Gross Domestic Product and that means the national debt is less of an economic burden than it has been in the recent past.”
As documented below with data from the federal government, the second half of that statement is categorically false, and the national debt situation is now worse than in any time in U.S. history. However, like President Obama, Collender obscures this by narrowly focusing on the relative size of recent deficits instead of looking at the broader picture.
Although the debt is now 13% below the peak from World War II, the situation today is more ominous than it was then. This is because the World War II debt was a temporary spike that steadily declined when spending on the war subsided. In contrast, the current national debt is a systemic and escalating problem driven by ongoing federal policies. These primarily involve mounting expenditures on social programs (like Medicaid, Social Security, and food assistance), which have risen from 21% of the federal budget in 1960 to 60% in 2012.
In fact, the Congressional Budget Office (CBO) recently projected that under current federal policies, publicly held federal debt (a partial measure of the national debt) is on track to significantly and permanently eclipse the peak debt of World War II:
Such levels of government debt threaten harm to nearly all Americans, because they can depress economic growth, reduce living standards, drive up taxes, drive down government benefits, or trigger combinations of such results.
Worse still, CBO’s projections are based upon the questionable assumption that Obamacare’s Medicare cuts will “exert their full effect.” However, Medicare’s Chief Actuary recently reiterated that these cuts will likely cause “severe problems with beneficiary access to care” unless lawmakers “intervene.”
If lawmakers do intervene to prevent these cuts, Medicare’s Chief Actuary wrote that this will “lead to substantially higher costs for Medicare in the long range than those projected in this report.” This means that unless Medicare is rationed, the national debt is slated to grow even faster than CBO projects.
By James D. Agresti
September 26, 2014
Nobel Prize-winning economist Paul Krugman claims he has unveiled the real motive behind opposition to the Federal Reserve’s policy of minting trillions of dollars to purchase toxic investments and government debt——technically known as quantitative easing or QE.
According to Krugman, criticism of QE is not genuinely rooted in the oft-voiced concern that it may stoke inflation that would make necessities like food, housing, and energy far more expensive. Instead, he asserts that QE is “in the interest of the vast majority of Americans,” but “the right side of the political spectrum” opposes it because it harms the “very wealthy, in particular the top 0.01 percent.”
Going further, Krugman dismisses scholars who oppose QE as intellectually corrupt, declaring that the “wealth and the influence” of the elite buys “plenty of supposed experts eager to find justifications” to do what benefits rich instead of what’s good for America.
As documented below with highly credible, primary sources, Krugman uses a half-truth to weave a narrative that is diametrically opposed to reality. Furthermore, when pressing his case, Krugman critically fails to mention that since QE began in 2009, the wealth of the economic elite has soared, while that of the middle class has fallen. This occurred in spite of the fact that the recession ended more than five years ago and government has been inordinately active in redistributing wealth from prosperous Americans to others.
The what, why, and how of QE
In order to understand the basis for Krugman’s claim, it is essential to understand what QE was supposed to achieve, why it was said to be necessary, and how it was implemented.
In January 2009, the same month that QE began, Ben Bernanke, the chairman of the Federal Reserve from 2006 until early 2014, gave a speech in which he explained that the main purpose of QE was to make it easier and less costly for households and businesses to borrow money. “If the program works as planned,” he said, “it should lead to lower rates and greater availability of consumer and small business credit.”
Why is this important? Per an article published by the Federal Reserve Bank of St. Louis, “As interest rates fall, the cost to businesses for financing capital investments, such as new equipment, decreases. Over time, new business investments should bolster economic activity, create new jobs, and reduce the unemployment rate.” Likewise, Bernanke has said that “bringing down mortgage rates” stimulates “home-buying, construction, and related industries.”
In the same 2009 speech, Bernanke stated that the Fed was “compelled” to implement QE because “many financial institutions” had incurred “substantial losses” in the housing market crash, and these firms still owned a “large quantity” of “troubled” and “illiquid assets of uncertain value.” These are called “toxic assets,” and to a large degree, they consisted of subprime and other high-risk mortgages that had fueled the housing crash.
Given that financial institutions had just suffered huge losses and still owned stockpiles of toxic investments that they could not sell without taking further losses, these firms found themselves in a position where they could not effectively loan, borrow, or trade. As explained by Bernanke, this is problematic because “our economic system is critically dependent on the free flow of credit.”
In order to open the flow of credit, the Fed began purchasing these toxic assets from the major corporations that owned them, effectively giving them cash for their “illiquid assets of uncertain value.” Naturally, this put these institutions in a better position to conduct business and earn profits.
This was a direct bailout of the financial companies that owned these investments. In the words of Bernanke, the public “is understandably concerned by the commitment of substantial government resources to aid the financial industry,” but this action “appears unavoidable” in order to save the economy. He also noted that the “large firms that the government is now compelled to support to preserve financial stability were among the greatest risk-takers during the boom period.”
In sum, Bernanke said it was necessary to bail out the same financial firms that took the greatest risks (and hence made the greatest profits) during the boom that led to the crash. This is the most obvious way in which QE has enriched many wealthy people, who are far more heavily invested in stocks than other Americans. For instance, in 2013, the top 10% of income earners owned an average of $969,00 in stocks, including shares owned directly and indirectly through mutual funds, trusts and retirement plans. In comparison, the top 50-10% of income earners owned an average of $132,000 in stocks.
Beyond this, the Fed and other proponents of QE articulated two other primary ways in which QE would make it easier for Americans to borrow money. First, through buying $1.7 trillion of mortgage-based assets, the Fed planned to increase the demand for them, which for reasons detailed by the Congressional Research Service, would lead “to lower mortgage rates.”
Second, in the initial round of QE and in two subsequent rounds, the Fed purchased nearly two trillion dollars of federal debt. The rationales for this entail many particulars, but as summarized by the Congressional Research Service, the Fed did it to drive down interest rates on government debt “in the hope” that this “will indirectly filter through to reductions in other” interest rates, such as home mortgages and business loans.
So from where did the Fed get the money to purchase trillions of dollars in toxic assets and government debt? In the words of Benn Steil, the Director of International Economics at the Council on Foreign Relations, the Fed did it with “newly conjured dollars.” This is another way of saying that the Fed created the money out of thin air. Bernanke himself explained how this could cause inflation in a 2002 speech before the National Economists Club in Washington, D.C.:
U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services.
Bernanke then assured that the “U.S. government is not going to print money and distribute it willy-nilly,” but he acknowledged that the Fed engages in certain “policies that approximate this behavior.”
These realties spur concern among economists that QE may well lead to inflation levels that would make life substantially harder on many Americans, especially those with the least financial flexibility—namely, the lower and middle classes.
Krugman’s assertion that QE harms the rich is based upon the fact that it was designed to drive down interest rates, which he says is “directly detrimental to people who get a lot of their income from bonds and other interest-paying assets — and this mainly means the very wealthy, in particular the top 0.01 percent.” “You’re living in a fantasy world,” he proclaims, “if you don’t think this has something to do with the diatribes against” QE.
To support this narrative, Krugman cites data on interest income from 2007 to 2012, showing that annual interest income for the top .01% of earners declined by $1.7 million over this period, or by 9% of their total 2007 income. “The wealthy derive an important part of their income from interest on bonds,” he writes, “and low-rate policies have greatly reduced this income.”
Krugman doesn’t bother to document this data except to say that it came from economists Thomas Piketty and Emmanuel Saez. Nevertheless, assuming it is accurate, the conclusion Krugman draws from it ignores three vital aspects of QE’s effects on the economy and wealthy investors.
First, bond investors don’t only make money by purchasing bonds and holding them as they earn interest. They also reap capital gains from selling bonds, and this is a central element of bond investing. During 2013, the U.S. bond market issued $6.4 trillion in new bonds, but investors bought and sold an astounding $202 trillion of bonds, or more than 12 times the size of the entire U.S. economy. These transactions are opportunities for investors to make capital gains, which are not reflected in the figures cited by Krugman.
That is a critical oversight, because although QE pushes down the overall interest rates on bonds, it actually drives up their values. As explained by the U.S. Securities and Exchange Commission, “A fundamental principle of bond investing is that market interest rates and bond prices generally move in opposite directions.” The SEC has detailed the reasons for this counterintuitive fact, but as summarized by the Fed, “the result is an increased demand for those securities, which in turn raises their prices.” Through this, QE has enriched bondholders, especially those who owned bonds just before QE began. Collectively, such bonds were worth $32 trillion at the end 2007, or more than twice the size of the U.S. economy that year.
Second, QE was a direct bailout of the large financial firms that invested heavily in subprime and other high-risk mortgages. Per the Federal Reserve, on the same day that the Fed announced the first round of QE, “profit takers had entered the market and were selling MBS [mortgage-backed securities] in large quantities.” In other words, the Fed’s actions artificially transformed risky, failed investments into profit-makers, thus benefiting many affluent Americans who owned shares of these firms.
Third, and perhaps most importantly, QE has inflated the stock market, a major source of wealth for the richest Americans. Relative to the size of the U.S. economy, at of the end of 2013 the Dow Jones Industrial Average was 25% above its average since 1990. Per Lawrence Summers, Obama’s former chief economist and Clinton’s Treasury Secretary, “low interest rates raise asset values and drive investors to take greater risks,” and per the SEC, stocks have the “greatest risk and highest returns among the three major asset categories.” Likewise, the Wall Street Journal recently reported:
Investors and strategists say that the low interest-rate environment of recent years has helped contribute to gains in U.S. stocks, as it makes competing assets such as bonds less appealing.
Wealthy and well-advised investors often have the expertise and financial flexibility to adapt to changing circumstances. If bonds do not offer them the best available value, they can and have put their money into other investments that do.
In sum, Krugman’s storyline rests upon demonstrably false and absurd assumptions that the wealthy haven’t altered their investment strategies in the wake of QE and that they have not capitalized on the rising bond and stock prices driven by QE.
Economic theory aside, what has occurred under QE lends no comfort to Krugman’s narrative. For example, from 2009 through 2013, the inflation-adjusted mean net worth of Forbes 400 Richest People in America increased from $3.4 to $5.1 billion, or by 50%. In striking contrast, during the same period, the median net worth of America’s households declined from $70,801 to $56,335, or by 20%.
Such outcomes have prompted people like Andrew Huszar, the former Federal Reserve official who implemented the “centerpiece program” of the first round of QE, to publicly apologize for his role in this policy. The Fed “continues to spin QE as a tool for helping Main Street,” wrote Huszar in November 2013, “But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.”
Of course, it is impossible to objectively disentangle the effects of a single government policy like QE from countless other factors that impact the income and net worth of wealthy and middle-class Americans. However, it would be quite a stretch to claim that the wealthy would have grown poorer and everyone else would have grown richer had it not been for factors outside of QE. This is because QE has coincided with the advent of numerous government programs designed to redistribute wealth from prosperous Americans to others.
Although the first round of QE was announced in November 2008, the Fed began buying bonds in January 2009. This happened to be the same month as the inauguration of President Obama, who pledged to “spread the wealth around” and implemented numerous polices toward that end. These include but are not limited to the 2009 stimulus, 2010 stimulus, expanding the Children’s Health Insurance Program, Obamacare, successive payroll tax holidays, extended unemployment benefits, capping student loan payments, and raising taxes on the wealthy.
Most of these policies were enacted during Obama’s first two years in office when he enjoyed the largest Congressional majorities in recent history, including a 79-seat Democratic majority in the House and an effective 18- to 20-seat majority in the Senate. From the time when Republicans gained control of the House in 2011, they have sometimes stopped Obama from enacting other such polices, but they have generally failed to undo what he previously passed. In fact, Obama is the first president since Lyndon B. Johnson (1963-1969) who has not yet had a single veto overridden by Congress.
Also, during Obama’s presidency (though not solely of his doing), government social benefits—which are a primary means of redistributing wealth—have consumed more of the U.S. economy than ever recorded in the nation’s history:
In sum, during QE, the finances of most Americans have fallen while that of the upper-class have risen, even though government has been directly transferring wealth from the latter to the former at an unprecedented rate. These facts make it difficult to rationally argue that QE helps “the vast majority of Americans” and makes “big losers” out of “people with very high incomes,” as Krugman proclaims.
In both theory and practical reality, there is ample evidence to suggest that QE has been a boon to the wealthy and possibly hurt most other Americans. Whether or not this will be the case in the future will be addressed in a forthcoming article about the inflationary potential of QE and the dynamics of prolonging or unwinding this policy.
By James D. Agresti
July 29, 2014
In the buildup to the Supreme Court’s Hobby Lobby decision, and even more so in its aftermath, prominent news outlets have been aggressively spreading falsehoods about key aspects of the case. Beyond logical fallacies about who is imposing their will on others, many reports and commentaries also contain statements that are discredited by the scientific facts at the core of this case.
Although journalism standards give commentators “wide latitude” to express their views, this is not a license to mutilate the truth. In the words of New York Times deputy editorial page editor Trish Hall, “the facts in a piece must be supported and validated. You can have any opinion you would like, but you can’t say that a certain battle began on a certain day if it did not.”
Yet, the New York Times and other media outlets have repeatedly broadcast demonstrably false claims about the Hobby Lobby case. Among the most frequent of these are as follows:
- Medical science shows that the Obama administration’s “contraception” mandate has nothing to do with abortion.
- IUDs don’t terminate human embryos.
- Morning-after pills don’t kill human embryos.
As detailed below, all of those claims are deceitful and derived from politicized, unauthoritative sources. In reality, data from highly credible sources shows that:
- The Hobby Lobby case concerns the destruction of living, viable human embryos.
- IUDs terminate viable human embryos.
- Morning-after pills may kill embryos, and claims that they don’t are based upon crass distortions of scientific studies.
What follows is the documentation of these facts, along with the details of how media outlets have flouted basic standards of journalistic integrity in their coverage of this case.
What is an embryo?
As explained in the medical textbook The Developing Human: Clinically Oriented Embryology, an “embryo” is formed at “fertilization” and marks the “beginning of a new human being.” Per the American Heritage Dictionary of Science, the earliest stage of an embryo is also called a “zygote” or “fertilized egg.”
During fertilization, embryos acquire the genetic information that makes each of us human. Per a 2001 paper in the Biochemical Journal, “Sexual reproduction in mammals results in the formation of a zygote, a single cell which contains all the necessary information to produce an entire organism comprised of billions of cells grouped into multitudinous cell types.”
In more practical terms, the Mayo Clinic Guide to a Healthy Pregnancy explains that the genetic material formed at fertilization “will determine your baby’s sex, eye color, hair color, body size, facial features and – at least to some extent – intelligence and personality.”
Science has also revealed that each human embryo is biologically unique and irreplaceable. Genetically speaking, with the exception of identical twins, once a woman conceives an embryo, the odds against her conceiving the same one again are greater than 10600 to one. For comparison, there are roughly 1080 atoms in the known universe.
What is an abortion?
As described in various dictionaries, an “abortion” involves the termination of a pregnancy. There is little controversy over that. However, there is disagreement over when pregnancy begins, and this boils over into the issue of what constitutes an abortion.
Some claim that pregnancy begins at fertilization, while others argue that it does not begin until the embryo implants in the uterus (which occurs 8-10 days after fertilization). Hence, under the second of these definitions, killing an embryo before implantation would not be considered an abortion. Instead, it would be called “contraception.”
Does the Hobby Lobby case concern abortion?
According to Annie Sneed in Scientific American, Anne Michaud in Newsday, and Jamie Manson in the National Catholic Reporter, medical science says that pregnancy does not begin until implantation, and thus, the Hobby Lobby case is not truly about abortion. In the words of Manson, “according to the medical definition, a woman is not considered pregnant until the developing embryo successfully implants [in] the lining of the uterus.”
Those are but a few examples of many who have made absolutist claims to that effect, but in reality, the definition of pregnancy is highly disputed in the medical profession. For example, polls of obstetrician-gynecologists published in the American Journal of Obstetrics and Gynecology and the Journal of Maternal-Fetal and Neonatal Medicine both show that doctors are divided over whether pregnancy begins at fertilization or implantation.
Likewise, medical literature abounds with the use of both definitions. Here is just a small sample of the countless medical texts that define pregnancy as beginning at fertilization:
- Human Reproductive Biology: “In most textbooks and in legal rulings about induced abortion (see Chapter 14), pregnancy begins at fertilization: We will also use that definition in this book.”
- Medical Physiology: Principles for Clinical Medicine: “A mother is considered pregnant at the moment of fertilization—the successful union of a sperm and an egg.”
- What Every Woman Should Know about Cervical Cancer: “The pregnancy begins with the fertilization of the ovum [egg].”
- Medical Terminology Made Incredibly Easy: “Pregnancy results when a female’s egg and male’s sperm unite.”
- Placenta and Trophoblast: Methods and Protocols: “Pregnancy begins with fertilization of the ovulated oocyte by the sperm.”
Nevertheless, writing for Al Jazeera, Marisa Taylor quotes two people from the Office of Population Research at Princeton University—neither of whom have a medical degree—stating that Hobby Lobby and other companies “are really redefining what pregnancy is, and therefore what abortion is. … Either they are very stupid, or they don’t believe in science.”
When Al Jazeera gives a platform to that kind of rhetoric while failing to report the countervailing facts, they violate a central tenet of journalism: to tell “the complete, unvarnished truth as best we can learn it.”
Most importantly, the precise definition of pregnancy is a semantic distraction from the core of the case. The Hobby Lobby lawsuit is about the owners’ objection to being forced to pay for items that terminate living, viable human embryos. Whether one calls this “abortion” or “contraception” does not change this reality.
Do IUDs terminate viable embryos?
The Obama administration’s Department of Health and Human Services—which is the same agency that issued the “contraception” mandate—publishes a “Birth control methods fact sheet” that was last updated in July 2012. This document states that copper IUDs can keep “the fertilized egg from implanting in the lining of the uterus” and that hormonal IUDs affect “the ability of a fertilized egg to successfully implant in the uterus.” In other words, HHS has confirmed that these devices terminate viable embryos.
Yet, articles and editorials by Aaron E. Carroll in the New York Times, Sally Kohn in the Daily Beast, Jill Filipovic in Cosmopolitan, and countless others emphatically deny that IUDs terminate embryos. For a prime example, during an interview with Megyn Kelly of FOX News, Patricia Ireland, the former president of the National Organization of Women, said the “belief that an IUD or a morning-after-pill works against a fertilized egg is not scientifically based.” When Kelly challenged her on this, Ireland replied, “No, no, you need to do a little medical research.”
In fact, medical research proves that exact opposite of what Ireland and company have declared. For instance, a 2002 paper in the American Journal of Obstetrics and Gynecology reveals the results of “a rigorous examination of the evidence on the mechanism of action of IUDs.” The study found that “both prefertilization and postfertilization mechanisms of action contribute significantly to the effectiveness of all types of intrauterine devices.”
Likewise, a 290-page report dedicated to “long-acting reversible contraception” published by Britain’s Royal College of Obstetricians and Gynaecologists in 2005 and updated in 2013 explains that “IUDs prevent pregnancy by impairing gamete [sperm and egg] viability at fertilization and they have a strong inhibitory effect on implantation.” This statement is supported with citations of five medical studies, and the report recommends “women should be informed that intrauterine devices (IUDs) act by preventing fertilization and inhibiting implantation.”
Despite all of the evidence above, Aaron Carroll reports in the New York Times that “research does not support the idea that they [IUDs] prevent fertilized eggs to implant.” He attempts to back up this claim with studies showing “that a telltale sign of fertilization — a surge of the hormone human chorionic gonadotropin — occurred in only 1 percent of 100 cycles in women using IUDs. This would be consistent with the failure rate of IUDs in general.”
Carroll, however, neglects a key fact that undermines this entire line of reasoning. As detailed in the American Journal of Obstetrics and Gynecology paper cited above, human chorionic gonadotropin [hCG] “first becomes detectable relative to background levels in control subjects around the time of implantation,” and “between fertilization and implantation, substantial loss can occur. Therefore, hCG cannot be used as an indicator of fertilization, nor as an indicator of early embryo loss before implantation.”
In sum, contrary to the narrative being pushed by many media outlets, authoritative medical studies show that IUDs terminate living, viable human embryos.
Do morning-after pills destroy embryos?
The manufacturers of the three most common morning-after pills have been required by the FDA to affirm that the drugs may block implantation. Thus, the official company website for ella states that the drug “may also work by preventing attachment to the uterus.” Similarly, the website for Plan B One-Step states that the drug “may also work by preventing fertilization of an egg (the uniting of sperm with the egg) or by preventing attachment (implantation) to the uterus (womb).”
The website for Next Choice has recently been stripped of all but two pages, and neither of these explains how the drug works. In February 2013, this same website had a page stating that “it works by preventing” ovulation, fertilization, and “attachment of the egg (implantation) to the uterus (womb).” The full prescribing information for this drug, which is currently buried on a separate manufacturer’s website, says the same, only in more guarded and technical language.
None of the above hindered the editors at the Daily Beast from publishing Sally Kohn’s claim that there is “very little evidence” that IUDs and morning-after pills destroy embryos and “every scientific and medical study says so, as does the FDA.”
How does Kohn support this claim? By linking to a story at NPR and an analysis by RH Reality Check that relies upon the very same NPR story. This NPR story, in turn, is derived from a New York Times story that is rife with falsehoods. Just Facts has conducted an in-depth analysis of these NPR and New York Times articles; and to summarize, both are based upon gross misrepresentations of scientific studies and the unsupported claims of selected scientists with partisan political agendas (more on this below).
As detailed in Just Facts’ earlier analysis, the question of whether or not morning-after pills destroy embryos is reflected in their FDA-approved prescribing information: they may block implantation. If this occurs, they destroy human embryos.
Portraying activists as neutral authorities
The BBC’s journalism standards on “Avoiding Misleading Audiences” state that reporters should provide the “credentials” of their sources so “audiences can judge their status.” More specifically, BBC’s standards on “Impartiality” state that news professionals should not assume their sources are “unbiased” and should “make it clear to the audience when contributors are associated with a particular viewpoint, if it is not apparent from their contribution or from the context in which their contribution is made.”
That standard, which is meant to prevent journalists and commentators from portraying activists as impartial authorities, has been routinely ignored by news outlets in their coverage of the Hobby Lobby case. For example, the above-mentioned NPR and New York Times articles both rely upon claims from the following individuals to support the central narratives of their stories:
- Susan F. Wood, an associate professor of health policy at George Washington University and a former assistant commissioner for women’s health at the FDA.
- Diana Blithe, a biochemist and contraceptive researcher at the National Institute of Child Health and Human Development.
What these NPR and New York Times articles fail to mention is that both Wood and Blithe are political donors to Barack Obama. More significantly, both are also donors to Emily’s List, a political action committee “dedicated to electing pro-choice Democratic women to office.”
Those are not isolated examples. One of the commonly cited authorities in this case is the emergency contraception website operated by Princeton University’s Office of Population Research and people associated with it. Yet, the following information is almost never disclosed: The website was founded by James Trussell, a Princeton professor who is a senior fellow with the Guttmacher Institute, an organization that operates under “guiding principles” that include support for legalized abortion. Moreover, Trussell is “a member of the National Medical Committee of Planned Parenthood Federation of America, and a member of the board of directors of NARAL Pro-Choice America and the Society of Family Planning.”
Even so, Time magazine describes Trussell as “a professor of economics and public affairs at Princeton University who has done extensive research on the subject” of emergency contraception. He is similarly described by MSN, Reuters, and a host of other news organizations. Would these same media outlets describe a board member of the National Right to Life Committee in such a nondescript manner?
Another commonly cited authority in the Hobby Lobby case is the American College of Obstetricians and Gynecologists (ACOG). Although media outlets regularly quote this organization as if were neutral, it has a track record of consistently opposing pro-life legislation and issuing statements that are transparently false. For instance, ACOG has declared “there is no evidence” a fetus can feel pain “until 29 weeks at the earliest” despite copious evidence to the contrary from journals such as Fetal Diagnosis and Therapy, Behavioral and Brain Sciences, Pain: Clinical Updates, and PLoS ONE.
Furthermore, ACOG was caught modifying its clinical findings on partial-birth abortion at the behest of a Clinton White House lawyer. Incidentally, this lawyer was Elena Kagan—who President Obama later appointed to the Supreme Court. Again, media coverage is virtually devoid of this information, which has the result of deceiving audiences through the omission of vital context.
In flagrant disregard for basic standards of honest journalism, media outlets have propagated claims about the Hobby Lobby case that are falsified by credible scientific publications.
Many of these news organizations have written guidelines that call for unconditional integrity. The New York Times, for example, declares that “the journalism we practice daily must be beyond reproach,” and the organization has “an ethical responsibility to correct all its factual errors, large and small.”
Whether or not those are just lofty words will be shown by how the media responds to the facts above.
9 of 10 unaccompanied Central American minors caught illegally entering the U.S. over the past 5 years have not yet been ordered to leave.
By James D. Agresti
July 11, 2014
White House Press Secretary Josh Earnest stated on Monday that the Obama administration is “committed” to “enforcing the law” and that most of the unaccompanied Central American minors illegally flooding into the U.S. will be deported. “Most of these kids,” said Earnest, do “not have a legal basis for remaining in this country” and “will be returned” to their homelands.
Earnest’s statement led to series of major media headlines, such as “White House Says ‘Most’ Children At The Border Will Be Sent Home” (Associated Press), “White House: Most will be sent home” (The Hill), and “White House: ‘Most’ unaccompanied minors at border will likely be deported” (Washington Post).
That claim, however, is at odds with data recently provided by an Immigration and Customs Enforcement (ICE) official at a Congressional hearing. While testifying before the House Judiciary Committee on June 25th, Tom Homan, ICE’s Executive Associate Director for Enforcement and Removal Operations, stated that 87% of the unaccompanied Central American minors who have been apprehended illegally entering the U.S. over the last five years have not yet been ordered to leave.
ABC News was one of the few major media outlets to report this 87% figure, but ABC quoted Homan out of context, thus giving the impression that the figure only applied to those who entered in the past year. Complete footage of the hearing shows that it applies to all who entered “in the last five years,” which dates back to mid-2009, or a few months after President Obama took office. The relevant excerpt and context from Homan’s testimony are shown in the video below. (For reference, an “NTA” is a notice to appear in immigration court.)
The White House is saying that this “influx of illegal migration from Central America” is an “urgent humanitarian situation” but that Obama cannot effectively address it because of a law signed by George W. Bush. The law, enacted in 2008 to combat human trafficking, requires special treatment for “unaccompanied alien children” from nations that don’t directly border the U.S., such as El Salvador, Guatemala, and Honduras.
The law states that when such children are “apprehended at the border” or a “port of entry,” they must be “promptly placed in the least restrictive setting that is in the best interest of the child,” “provided access to counsel,” and “placed in removal proceedings.” This means that they cannot be returned to their homeland without a court order. The Obama administration is placing about 85% of these minors with relatives in the U.S.
In contrast, under this same law, unaccompanied minors from countries that border the U.S., such as Mexico, can be returned to their “country of nationality” without a court order, largely at the discretion of ICE. ICE is part of the Department of Homeland Security, which is under the authority of the President.
In keeping with the message the President wants to speed deportations, the White House is calling on Congress to give Obama “greater authority” to “more efficiently and effectively remove and repatriate immigrants to this country that don’t have a legal basis for remaining here.” However, the Associated Press reported less than three weeks ago that the “Obama administration has released into the U.S. an untold number of immigrant families caught traveling illegally from Central America in recent months.”
Unlike unaccompanied minors, the law does not require that these apprehended illegal immigrants be released into the U.S. Yet, the Associated Press estimated that the Obama administration may have released more than 40,000 of them since October, and “although the government knows how many it’s released, it won’t say publicly.”
Likewise, as far back as 2010, the union representing 7,000 officers and employees of the ICE Office of Enforcement and Removal Operations (ERO) unanimously passed a “Vote of No Confidence” in the Obama administration’s ICE leaders. The resolution stated that they “have abandoned the Agency’s core mission of enforcing United States Immigration Laws and providing for public safety” and:
The majority of ICE ERO Officers are prohibited from making street arrests or enforcing United States immigration laws outside of the institutional (jail) setting. This has effectively created “amnesty through policy” for anyone illegally in the United States who has not been arrested by another agency for a criminal violation.
Similarly, in 2013, Chris Crane, the president of this union, wrote a letter to Congress stating that “ICE officers are being ordered by” Obama administration “political appointees to ignore the law.” He also wrote that ICE officers have been disciplined “for engaging in routine law enforcement actions” and are being “barred from enforcing large sections of the Immigration and Nationality Act, even when public safety is at risk.”
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By James D. Agresti
June 10, 2014
In a recent interview, Senator Marco Rubio (R-FL) declared it is a scientific fact that “human life begins at conception.” He also said that “leaders on the left” who “wag their fingers” about the “settled science” of global warming are hypocrites when it comes to science, and someone should ask them if they accept the “consensus of scientists that says that human life begins at conception.”
Going further, the senator added, “I’d like to see someone ask that question. It’s never asked. And that’s not even a debatable thing, we can actually see that happening. I mean, that is a proven fact. And yet that’s a scientific consensus they conveniently choose to ignore.”
- he made a “scientific blunder on abortion.” (Carmon)
- “conception” and “life” “aren’t scientific terms.” (Carmon)
- “the scientific experts we spoke with didn’t offer any consensus” on when life begins. (Bump)
However, as documented below, the facts of science support Rubio’s point and reveal that the claims of Carmon and Bump are scientifically baseless.
Science shows that life begins at conception
Contrary to Carmon’s allegation that “conception” and “life” are not scientific terms, both of these words are clearly defined in science dictionaries and widely used in scientific literature.
To cite just a few examples, the American Heritage Science Dictionary defines “conception” as “the formation of a zygote resulting from the union of a sperm and egg cell; fertilization.” (For reference, a zygote is the first stage of a human embryo.)
Likewise, the entry for “life” in the American Heritage Dictionary of Science states that life is “the form of existence that organisms like animals and plants have and that inorganic objects or organic dead bodies lack; animate existence, characterized by growth, reproduction, metabolism, and response to stimuli.”
Rubio’s statement that “human life begins at conception” is consistent with both of these definitions, because human zygotes display all four empirical attributes of life:
- Growth – As explained in the textbook Essentials of Human Development: A Life-Span View, “the zygote grows rapidly through cell division.”
- Reproduction – Per Human Sexuality: An Encyclopedia, zygotes sometimes form identical twins, which is an act of “asexual reproduction.” (Also, in this context, the word “reproduction” is more accurately understood as “reproductive potential” instead of “active reproduction.” For example, three-year-old humans are manifestly alive, but they can’t actively reproduce.)
- Metabolism – As detailed in the medical text Human Gametes and Preimplantation Embryos: Assessment and Diagnosis, “At the zygote stage,” the human embryo metabolizes “carboxylic acids pyruvate and lactate as its preferred energy substrates.”
- Response to stimuli – Collins English Dictionary defines a “stimulus” as “any drug, agent, electrical impulse, or other factor able to cause a response in an organism.” Experiments have shown that zygotes are responsive to such factors. For example, a 2005 paper in the journal Human Reproduction Update notes that a compound called platelet-activating factor “acts upon the zygote” by stimulating “metabolism,” “cell-cycle progression,” and “viability.”
Furthermore, the science of embryology has proven that the genetic composition of humans is formed during fertilization, and as the textbook Molecular Biology explains, this genetic material is “the very basis of life itself.”
In accord with the facts above, the textbook Before We Are Born: Essentials of Embryology and Birth Defects directly states: “The zygote and early embryo are living human organisms.” This may be controversial from a political perspective, but the sciences of embryology and genetics leave no doubt as to when human life begins.
ACOG is not an objective scientific authority
Bump’s article is entitled, “Marco Rubio demanded people look at the science on abortion. So we did.” Yet as far as the article reveals, the entirety of Bump’s “scientific” research consisted of speaking to a single organization: the American College of Obstetricians and Gynecologists, or ACOG.
While Bump’s article clearly shows that ACOG avoided the question of when life begins and attempted to change the subject, Bump did not articulate this to his readers. Instead, he used ACOG’s non-answer to conclude that life “is something of a philosophical question,” and “the scientific experts we spoke with didn’t offer any consensus” on this issue.
That is not “looking at science,” as Bump claims he did. Rather, it is cherry-picking the opinions of selected scientists and uncritically relaying them. It also presumes that the chosen scientists are unbiased and incontestable authorities on this issue, which is demonstrably not the case with ACOG’s leadership.
For instance, when a debate over partial-birth abortion was raging during the Clinton Administration. ACOG prepared a statement disclosing that a “select panel convened by ACOG could identify no circumstances under which this procedure, as defined above, would be the only option to save the life or preserve the health of the woman.”
Yet instead of releasing this information to the public, ACOG faxed it to the Clinton administration with a header that stated: “CONFIDENTIAL, NOT FINAL, DO NOT COPY, DO NOT DISTRIBUTE.”
This document came to the attention of a White House lawyer and policy advisor named Elena Kagan (later appointed by President Obama to the Supreme Court). She was displeased with ACOG’s conclusion and wrote a memo warning that its release would be a “disaster,” especially since ACOG opposed banning partial birth abortions.
Kagan then proceeded to edit ACOG’s statement by adding that partial-birth abortion “may be the best or most appropriate procedure in a particular circumstance to save the life or preserve the health of a woman….” Those words did not reflect the thrust or scope of ACOG’s findings, which Kagan clearly understood because she had detailed them in a previous memo.
Nevertheless, ACOG adopted Kagan’s words as its own, thus using the rhetoric of a Clinton administration lawyer in place of its own medical conclusions. Those are not the actions of an objective scientific authority but of an organization that is willing to place politics over science.
What is science?
There is a lot of posturing about science in the world of politics, but some of what is reported as “science” is actually just the claims of selected scientists, which happen to be at odds with the facts of science.
Science, in the words of Webster’s College Dictionary, is the “systematic knowledge of the physical or material world gained through observation and experimentation.” Notably, this does not entail parroting the assertions of someone with scientific credentials.
In the realm of science, what matters is facts and logically inescapable conclusions that flow from them—not opinions, no matter who voices them or how prevalent they are. A classic example of this is Galileo, who wrote that when it comes to the sciences, “the authority of thousands of opinions is not worth as much as one tiny spark of reason in an individual man.”
In this instance, Rubio is that man, and Carmon, Bump, and ACOG are substituting their ideology for science in the public debate over abortion.
By James D. Agresti
May 30, 2014
In an op-ed about the Obama administration’s pending regulation of greenhouse gases from coal-fired electricity plants, Paul Krugman recently declared in his New York Times column that:
- the international community will join together to curtail greenhouse gases if only the U.S. would do so.
- the regulatory costs of “saving the planet would be remarkably cheap.”
- solar energy will make these costs even lower.
All of these claims are at odds with the economic, scientific, and historical facts of these matters.
First, Krugman says that “other countries, China in particular,” will not negate U.S. greenhouse gas reductions by “burning ever more coal.” He claims that this outcome would be prohibited by “international agreement,” but “U.S. unwillingness to act has been the biggest obstacle to such an agreement.”
He then lays out this vision: “If we start taking serious steps against global warming, the stage will be set for Europe and Japan to follow suit, and for concerted pressure on the rest of the world as well.”
Krugman seems oblivious to the fact that there already was an international agreement to restrict greenhouse gas emissions. It was called the Kyoto Protocol—it was ratified by every major developed nation but the United States—and the events that ensued were very different than the scenario painted by Krugman. As documented in Just Facts’ research on global warming:
- “Between 1997 (the year Kyoto was adopted) and 2008 (the start of its compliance period), the combined annual CO2 emissions of the developed countries that ratified the treaty increased by 1.3%,” while those of “the U.S. decreased by 0.7%.”
- “In the decade following the adoption of the Kyoto Protocol, Earth’s atmospheric CO2 concentration increased by 5.3% or 19 parts per million, which is 35% more than the increase in the decade before the treaty.”
- “In 2011, Russia, Japan, and Canada announced they would not extend their participation in the Kyoto Protocol beyond 2012 because developing nations were exempted from its conditions.”
- “In 2010, the head of the head of the European Commission’s climate unit stated that the European Union’s participation in the Kyoto Protocol after 2012 will be based upon the participation of Russia and Japan.”
It is difficult to square these realities with Krugman’s prophecy of global climate change cooperation based on the U.S. cutting greenhouse gas emissions. The U.S. already did this, but the world did not follow, and the agreement fell apart due to the actions of other nations.
Krugman also argues that we can “achieve large reductions in greenhouse gas emissions at little cost to the economy.” He says, for example, that a study from the U.S. Chamber of Commerce shows that the total cost per household of Obama’s forthcoming coal regulation will be only $200 annually.
However, the Obama administration’s regulatory agenda on greenhouse gases is much more expansive than this single regulation. The administration has issued a far-reaching regulatory decision that a metric ton of CO2 has a “social cost” of $38. This is the figure used by the EPA and other agencies under the authority of the president to assess and justify regulations on greenhouse gases.
As explained by the U.S. Energy Information Administration (EIA), such regulations “can have the same consequences for energy prices, production, and consumption as the direct payment of a cash subsidy or the imposition of a tax.” According to this same federal agency, a CO2 tax of roughly the same magnitude as Obama’s regulatory decision will add 11% to the price of gas and 30% to the price of electricity by 2022.
These are recurring annual costs to American consumers, not a one-time fee.
Next, Krugman claims that the Chamber of Commerce’s analysis is pessimistic, because it assumes the replacement of coal with natural gas. According to Krugman, “dramatic technological progress taking place in renewables, especially solar power … should make cutting back on carbon even easier.”
That assertion is categorically false. Data from the Energy Information Administration show that solar-generated electricity will still be more than twice the cost of electricity from natural gas in 2018.
Though Krugman (and many others) are claiming that the world can cut greenhouse gases with minimal sacrifice, a 2011 report of the United Nations Framework Convention on Climate Change bluntly declares that “in the end ‘no regrets’ methods won’t be enough to stabilize or reduce worldwide greenhouse-gas levels—governments, businesses, and people are going to have to make difficult choices and take painful steps.”
These painful steps generally involve higher energy prices, which drain household budgets and harm the broader economy. Numerous creditable sources, such as the Institute for Plasma Physics in the Netherlands, the U.S. Department of Agriculture, the Congressional Budget Office, the Congressional Research Service, and the U.S. Government Accountability Office, have affirmed that higher energy costs drive up unemployment, drive down wages, and cause other harmful economic effects.
Furthermore, these effects tend to be harsher on poorer nations and people, because they spend a greater portion of their incomes on energy than wealthier individuals, and because high energy prices drive up the costs of food. Hence, despite the pronouncements of certain individuals, there are significant costs to cutting greenhouse gases, and these costs should be honestly weighed against any potential environmental benefits.
By James D. Agresti
May 20, 2014
In a recent segment of her Emmy-Award winning television show, Rachel Maddow, an MSNBC host with a doctorate in political science from Oxford University, claimed that:
- State government budget deficits in Kansas, North Carolina, and New Jersey are “huge,” because their Republican governors have cut tax rates.
- Cutting tax rates invariably leads to lower tax revenues.
- The federal deficit is “plummeting,” because President Obama raised taxes on the wealthiest Americans.
All of those assertions are false or misleading, and data from the federal government and the same sources cited by Maddow show that:
- The federal deficit she applauded is 4.8 to 6.7 times larger than the state shortfalls she derided.
- Tax revenues sometimes stay level and even increase when tax rates are cut.
- The federal deficit naturally declines after a recession, but it is still larger than Bush-era deficits that Obama condemned as “reckless.”
Below is the documentation of these facts, along with the details of how Maddow has distorted the truth.
The federal deficit far exceeds the “huge deficits” cited by Maddow
While criticizing Republican governors and tax cuts, Maddow flashed the following snippets of news stories about projected state budget shortfalls:
- Kansas: “a shortfall of about $900 million by fiscal year 2019″
- New Jersey: “$807-million-revenue shortfall”
- North Carolina: “Analysts expect $445M NC shortfall”
Maddow provided no sense of scale for these figures, which is vital to understanding their significance. Instead of providing some basic context, such as how large these shortfalls are compared to the size of the budgets, Maddow simply exclaimed that they are “huge.” She said this four times in less than three minutes while declaring that these budgets had “blown up” and were going “kablooey.”
However, compared to the size of their budgets, the projected budget shortfalls of these states are far smaller than that of the federal government. The projected 2014 fiscal year shortfall for Kanas is 3.0% of the budget—for Jersey, it is 3.0%—and for North Carolina, it is 2.2%. In comparison, the projected shortfall for the federal government is 14.5% of the budget.
In other words, the federal deficit that Maddow celebrated is 4.8 to 6.7 times larger than the state shortfalls she decried.
Higher taxes reduce the incentive to work
Throughout the segment, Maddow repeatedly used sarcasm to assert that reductions in tax rates inevitably produce lower tax revenues. In her words: “One thing that happens when you cut taxes is that taxes get cut!” That claim may seem intuitive, but it is not true in all cases.
As shown in the graph below, federal income tax revenues often do not correspond with top federal income tax rates (which lawmakers tend to raise and lower simultaneously with and more dramatically than the rates for lower brackets):
The reason that tax revenues don’t always mirror tax rates is because there are a host of other variables that affect revenues, one of which is that lower tax rates boost people’s incentives to work, thereby generating more taxable income.
As explained by the Congressional Budget Office (CBO), “a lower marginal tax rate on labor income increases the incentive to work, raising the number of hours people work and therefore the amount of output and income.”
The strength of this effect is debatable, and not every cut in tax rates leads to higher revenues. However, even prominent liberal economist Paul Krugman wrote in his 2009 textbook, Economics, that higher tax rates diminish the incentive to earn more income:
Any income tax system will tax away part of the gain an individual gets by moving up the income scale, reducing the incentive to earn more. But a progressive tax takes away a larger share of the gain than a proportional tax, creating a more adverse effect on incentives.
The decline in deficits since 2009 is nothing to brag about
Just two weeks before President Obama was inaugurated in January 2009, CBO projected the path of the U.S. economy and federal budget for the next 10 years based upon current law. These projections showed rapidly improving economic conditions coupled with rapidly declining budget deficits after 2009, as is typical after a recession.
In the words of Krugman, “rapid growth is normal when an economy is bouncing back from a deep slump.” Economic growth, in turn, boosts tax revenues and lessens spending on government assistance programs, all of which serves to shrink deficits.
Before going further, it is important to note that CBO’s current law projections for the federal deficit are not directly comparable to actual outcomes, because such projections often use unrealistic assumptions. However, they do show that just before Obama took office, the laws already in place coupled with the economic growth that regularly follows recessions were expected to progressively reduce the federal deficit, as shown in this graph:
Nevertheless, Obama and supporters like Maddow routinely crow about the declining deficit, using the refrain that it has fallen at the fastest pace since World War II. What they neglect to mention is that every deficit from 2009 to 2012 was larger than any deficit since the World War II era. Thus, there was enormous potential and natural impetus for the deficit to fall.
Yet, even in 2013, four years after the recession ended, the deficit was still 72% higher than the average deficits that occurred solely during the presidency of George W. Bush (without overlap with Clinton or Obama). Obama denounced these Bush-era deficits on the floor of the U.S. Senate in 2006 when he stated that “reckless fiscal policies” had driven federal deficits to “historically high levels.” Now, he and others are bragging about deficits that are significantly worse.
More importantly, the national debt provides a much clearer picture of the financial health of the federal government than the deficit in any given year or string of years. As such, during the same Senate speech, Obama warned that “America’s debt weakens us domestically and internationally,” “America has a debt problem and a failure of leadership,” and “Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren.”
On the day Obama gave that speech, the national debt was $8.3 trillion or 61% of the nation’s economy. The national debt now stands at $17.5 trillion or 102% of the economy. Hence, even after adjusting for economic growth (which accounts for population increases and inflation), our national debt is now 67% larger than the debt Obama railed against in 2006.
Finally, linking deficits to any particular president or governor fails to account for the actions of congresses, the impacts of preexisting laws, and many other variables that impact government spending and revenues. Hence, to attribute these deficits purely to presidents or governors, as Maddow and many others have done, oversimplifies and misrepresents the facts of these matters.
By James D. Agresti
May 2, 2014
One of the most heartrending issues in society is child hunger, and polling shows that public support for addressing hunger is “high across party lines, age, race, gender, income, and geographical areas.” However, instead of reporting the facts of this important issue, a number of influential media sources are greatly exaggerating the problem.
One of these sources is Think Progress, which ranks among the nation’s top-15 political websites. In a recent article, Alan Pyke, the Deputy Economic Policy Editor of Think Progress, reports that “more than a fifth of America’s children are going hungry,” government food “programs have faced wave upon wave of funding cuts,” and “America does a slightly better job at feeding adults” than children.
All of those statements are categorically false according to data from the U.S. Department of Agriculture (USDA), the Census Bureau, and the White House Office of Management and Budget. These primary sources show, for example, that on an average day, less than 1% of U.S. households with children have a child who experiences hunger.
These sources also show that the annual hunger rate for children is lower than adults and that federal spending on food and nutrition programs has risen by more than two thirds since 2007, even after adjusting for inflation and population growth.
Below is the documentation of these facts, along with the details of how Think Progress and others have distorted the truth.
“Food insecure” does not mean “hungry”
The crux of Pyke’s misreporting is that he falsely equates food insecurity with hunger. “Food insecurity” is a technical term used by the USDA to categorize households based upon a survey conducted by the Census Bureau.
This annual survey includes a series of questions about food consumption, and if respondents answer “yes” to at least three of ten questions, their households are classified as food insecure. For example, respondents are asked if they ever “worried” that their “food would run out before” they “got money to buy more.” For another example, they are asked if they “couldn’t afford to eat balanced meals.”
According to this survey, 21.6% of children and 15.9% of adults lived in households that were food-insecure at some point during 2012. These are the figures quoted by Pyke, but they do not apply to hunger, especially for children.
The title of Pyke’s article is “More Than A Fifth Of America’s Children Are Going Hungry.” Just to be clear, “hungry” means hungry (not food-insecure), “children” means children (not households), and “going” means currently (not once during the past year). Beyond the standard ten questions in this survey, the Census asked direct questions about child hunger, and the results look nothing like what Pyke reports.
For example, the survey found that 1.5% of households with children had a least one child who was hungry at some point in the year. Likewise, in the 30 days before the survey, 1.04% of households with children had at least one child who was hungry at some point in the month.
Finally, on the average day (i.e., presently), 0.25% of U.S. households with children have at least one child who experiences hunger. In other words, Pyke’s claim that “more than a fifth of America’s children are going hungry” exaggerates child hunger by about 8,000%.
What are the reasons for the disconnect between Pyke’s figure and the government data?
First, as the USDA explains, “Households classified as having low food security” experienced “food access problems,” but they “typically have reported few, if any, indications of reduced food intake.” Prior to 2006, the USDA’s label for such households reflected this fact—it was called “food insecure without hunger.”
Second, food insecurity in a household does not necessarily mean food insecurity for the children in that household. Per the USDA, “Not all children residing in food-insecure households were directly affected by the households’ food insecurity. … Young children, in particular, are often protected from effects of the households’ food insecurity.”
Third, the USDA emphasizes that “when interpreting food security statistics in this report, it is important to keep in mind that households were classified as having low or very low food security if they experienced the condition at any time during the previous 12 months. The prevalence of these conditions on any given day is far below the corresponding annual prevalence.”
These three factors account for the differential between Pyke’s figure and reality. Furthermore, they undercut his claim that “America does a slightly better job at feeding adults” than children. While average daily hunger rates for adults are not available, 4.7% of survey respondents reported that they were hungry at least once during the year, as opposed to 1.5% for any children in households with children. In other words, the portion of households that report hunger among children is three times lower than that of adults—not higher.
A common falsehood and misinformed public
Pyke is not the only purveyor of inflated hunger statistics. PolitiFact, the Pulitzer-Prize winning fact check organization, has alleged that 24.3% of children in Texas were “in hunger” and “according to the U.S. Department of Agriculture, ‘food insecurity’ means that at some point in a year, someone in a household went hungry because the household couldn’t afford food.”
That claim is in direct opposition to what the USDA explicitly states. Again: “Households classified as having low food security have reported multiple indications of food access problems, but typically have reported few, if any, indications of reduced food intake.”
Other journalists and commentators have also grossly overstated hunger in the U.S. This includes (but is not limited to) Paul Kurtz of CBS News, Bob Beckel of Fox News, Paul Krugman of the New York Times, and Stoyan Zaimov of the Christian Post.
Such widespread misreporting may explain why public opinion on this issue is so far removed from reality. A recent poll commissioned by Just Facts found that only 9% voters know that less than 1% of households with children have a child who experiences hunger on an average day. Contrastingly, 56% of voters believe this figure is above 10%.
Federal spending on food and nutrition programs has grown dramatically
To support his assertion that food assistance “programs have faced wave upon wave of funding cuts,” Pyke links to an article he wrote that doesn’t even support that claim. This is called a “citation bluff,” which is when someone cites a source to back up a claim, when in fact, the source does not prove it.
The article Pyke cites is about how 16 states are adapting to a recently closed loophole in the food stamp program. This is not a wave of cuts but the closure of a single loophole, which incidentally, was supported by staunch proponents of food stamps, such as the Washington Post editorial board, the New York Times editorial board, and the Center on Budget and Policy Priorities.
Although it was not mentioned in Pyke’s article, a temporary increase in food stamp benefits enacted in the 2009 stimulus bill expired in November 2013. Such fairly mundane changes hardly amount to a wave of cuts, much less “wave upon wave” of cuts.
In stark contrast to the picture painted by Pyke, federal spending on food and nutrition assistance programs has risen steeply over the past dozen years, growing more than 70% between 2007 and 2013, and more than 120% since 2001—even after adjusting for inflation and population growth: