Question of the Day

Featured

Are the Oceans Plagued by Plastic?

By James D. Agresti
February 28, 2015

Based upon two new papers in academic journals, media outlets have been reporting that the world’s oceans are overwhelmed with plastic waste. However, as detailed below, the documented amount of plastic in the world’s oceans is the equivalent of placing a microscopic speck of plastic weighing less than one-thousandth of an ounce into this Olympic-sized swimming pool containing 660,000 gallons of water:

Creative Commons | https://www.flickr.com/photos/dgeezer

The papers in question were published in the journals PLoS ONE and Science. Numerous media outlets and organizations reported on these papers with cataclysmic headlines, such as:

“Plastic, plastic everywhere: World’s oceans plagued by waste.”
– Traci Watson of USA Today

“World’s oceans clogged by millions of tons of plastic trash.”
– Will Dunham of Reuters

“Good job, humans: The oceans now contain 5 trillion pieces of floating plastic.”
– Chris Mooney of the Washington Post

These claims and others like them are rooted in alarmism enabled by the papers’ authors, who neglected to provide a tangible, objective context for their findings and then exaggerated them by making dire, subjective statements to the press. The authors of the Science paper also misused data to produce one of the key foundations of their study.

In the PLoS paper, the authors estimated that there is 269,000 metric tons of plastic waste floating in the world’s oceans. This figure is 8 to 38 times more than an estimate published six months earlier in the Proceedings of the National Academy of Sciences. Without dissecting the competing methods used in each of these papers, even if one blindly assumes that the higher figure is more accurate, this much plastic is equal to just 0.00000000002% of the mass of the world’s oceans.

For a striking comparison that illustrates the minuteness of that number, the average concentration of uranium in the human body is 400,000% higher than this. For another point of comparison, it is the equivalent of placing 1/60,000th of an ounce of plastic into an Olympic-size swimming pool containing more than five million pounds of water.

The PLoS authors assert that their “estimates are highly conservative, and may be considered minimum estimates.” Yet, even if there were 100 times more plastic in the oceans than they estimated, the average plastic concentration would still be more than 1,000 times lower than the EPA’s standard for drinking uranium-laced water on a regular basis.

Nevertheless, the lead author of the paper told a reporter from USA Today, “There’s a lot of waste out there,” and the reporter in turn declared that the oceans are “teeming with” plastic that weighs “three-quarters as much as the Empire State Building.”

Such statements are unscientific and misleading, because they ignore the most fundamental principle of toxicology, which is that the dose makes the poison. It is not the total amount of a pollutant that makes it harmful, but its concentration—or how much there is relative to the space or mass in which it is located. This fact is so vital and basic that a middle-school science guide on water pollution explains it. Yet, the authors of this paper overlooked this matter, as did certain journalists.

Plastic is not evenly distributed in the oceans, and thus, concentrations are higher in some areas than others. Because plastic is often buoyant, and because the oceans have massive regions of circular currents called “gyres,” plastic tends to drift towards the centers of these regions. This is where the primary data used in the PLoS paper was gathered, but the authors don’t even attempt to show that these regions have enough plastic to cause harm to any element of the environment.

As with most environmental issues, one can point to anecdotes (like a beach strewn with plastic) to argue that there is a crisis, but isolated examples don’t prove there is a global or even regional problem, as the paper’s authors and media have suggested.

Not all plastic in the oceans can be readily measured. Some of it sinks, and some of it is biodegraded by microbes and eaten by wildlife. Hence, the authors of the PLoS and Science papers claim that there must be far more plastic in the oceans than anyone has ever estimated. For example, the Science paper concluded that 4.8 to 12.7 million metric tons of plastic waste flow from the land to the ocean each year. These figures are 17 to 47 times higher than the amount of plastic floating in the oceans calculated in the PLoS paper.

The authors of the Science paper produced their estimates by employing a series of assumptions to calculate that an average of 5% to 13% of all plastics used within 31 miles of every coastline in the world ends up in the oceans every year. Perhaps realizing that these figures would be greeted with skepticism, the authors never directly revealed them in their paper or press conference. Instead, this essential element of the study must be calculated from information in the paper, which is located behind a paywall.

Worse still, the authors misapplied one of the key pieces of data used to produce their results. In a file of supplementary information (also behind a paywall), they claim that 4.17 million metric tons of litter were generated in the U.S. during 2008. However, the source that they cite for this figure does not state this. Instead, it states that this much litter “is collected each year” in the U.S. by governments, businesses, and educational institutions.

By definition, litter that is “collected” is not litter that can flow into the oceans. Yet, the authors used this figure to calculate litter rates throughout the world and then assumed that 15% to 40% of all litter generated within 31 miles of the world’s coastlines ends up in the oceans each year. When Just Facts questioned the lead author of the study about this, she wrote that they “used the best available data we could find to produce our order of magnitude estimate….” This statement does not address the fact that this data is for litter that has been collected, which is clearly not litter that can flow to the oceans.

During their press conference, one of the coauthors of the Science paper stated that “any plastic in the ocean is too much.” This kind of rhetoric feeds a common misconception about pollution, which is that natural substances are inherently better for the environment than synthetic ones. The academic book Molecular Biology and Biotechnology: A Guide for Teachers aptly dispels this notion:

Many people are frightened by the use of synthetic chemicals on food crops because they have heard that these chemicals are “toxic” and “cancer causing,” but are all synthetic chemicals more harmful than substances people readily ingest, like coffee and soft drinks? No…. For example, in a study to assess the toxicities of various compounds, half of the rats died when given 233 mg of caffeine per kg of body weight, but it took more than 10 times that amount of glyphosate … which is the active ingredient in the herbicide Roundup, to cause the same percentage of deaths as 233 mg of caffeine.

Likewise, the Cambridge University Press textbook Understanding Environmental Pollution emphasizes that “anything is toxic at a high enough dose,” and “potentially toxic substances are found in anything that we eat or drink,” including natural items like potatoes and even pure water itself. Again, the dose makes the poison.

The misinformation unraveled above concurs with the findings of a recent article published in the journal BioScience. In this article, eight PhD-level environmental scientists explained that certain scientists and journalists have created “the perception of ocean calamities in the absence of robust evidence.”

After documenting that this happens, the authors discussed how and why it happens. To summarize their findings, the underlying causes boil down to personal and intellectual biases, careless research, political pressures, dishonesty in the pursuit of “righteous ends,” and the desire for recognition and career advancement.

Whether or not such thought processes animated the publication and propagation of these PLoS and Science papers is unknown. Regardless, the anxiety over plastic in the oceans that these individuals have spread is not supported by the evidence they presented.

Is Ocean Life on the Brink of Mass Extinction?

By James D. Agresti
February 7, 2015

The journal Science is one of the most prestigious and cited publications in all of academia. Its website boasts of being “the world’s leading outlet for scientific news” and having “more than 100 of the world’s top scientists” on its Board of Reviewing Editors. These luminaries recently published a paper by a team of ecologists and biologists who concluded that mankind is headed towards causing “a major extinction” of marine animals.

This paper was greeted with extensive media coverage warning of a looming disaster. Such stories were published by Discovery News, Yahoo News, Scientific American, The Independent, the Boston Globe, and the New York Times. The last of these, for instance, described the paper as “a groundbreaking analysis of data from hundreds of sources” that found “humans are on the verge of committing unprecedented damage to the oceans and the animals living in them.”

All of these media outlets reported on this paper without a hint of skepticism, and this paper was obviously approved by Science‘s review board or it could not be published there. However, the paper repeatedly misuses data in support of its primary conclusion, which is that “we are setting ourselves up” for a “wildlife Armageddon” in the oceans, to borrow the words of the paper’s lead author.

The basis for this assertion is that mankind has caused numerous extinctions of land animals since the outset of the Industrial Revolution about two centuries ago, and the trends that led to these extinctions are now evident in the oceans. The authors of the paper attempt to prove this with the two graphs shown below. In these charts, the green lines signify land animals, and blue lines marine animals.

To substantiate their crucial claim that “rates of extinction on land increased dramatically” after the Industrial Revolution, the authors provide this chart in the paper’s file of supplemental information:

This graph is a prime example of data misuse, because the record of documented species extinctions becomes increasingly incomplete as we travel back in time. Hence, the data will naturally show an increase in the rate of extinctions over time, even if none has occurred.

As explained by the International Union for Conservation of Nature—which is the authors’ source for the data in this graph and the world’s leading authority on modern species extinctions—the count of documented extinctions over the past 500 years “grossly underrepresents the number of extinctions that have taken place in historic times, due to very incomplete and uneven sampling, both geographically and taxonomically.”

The reason that sampling and counts of extinctions are so incomplete for historic times is obvious: Mankind did not have scientific knowledge, technologies, or financial resources to conduct the type of exploration and documentation that we do in modern times.

In fact, scientists have only just begun to thoroughly catalog the world’s living species, thus enabling them to obtain more inclusive counts of extinctions. As the Associated Press reported in 2007, a “worldwide scientific effort to catalog every living species” was only “six years into the program.” A scientist involved in the project explained, “Many are surprised that, despite over two centuries of work by biologists and the current worldwide interest in biodiversity, there is presently no comprehensive catalog of all known species of organisms on Earth.”

In sum, the chart above does not prove that extinction rates increased over the last two centuries but that technological advances since the industrial revolution have enabled scientists to do a progressively better job of recording extinctions than in the past.

Another graph—this one appearing on the first page of the paper—suffers from a similar but worse flaw. It purports to show a dramatic spike in land animal extinctions in the past 500 years relative to thousands of years beforehand:

The problem with this graph is that before 500 years ago, extinction rates are approximated from studying fossils, which is a notoriously unreliable method of measuring extinction rates. As explained in the textbook Biodiversity and Environmental Philosophy, the “benchmark for assessing the severity of the current extinction rate” is called “background extinction rate,” which is “estimated from the fossil record” and is “generally accepted” to be “about one species per year.” The textbook then reveals that no “serious” attempt has been made to “judge the reliability” of this figure, because the “uncertainties at each stage of the calculation” would make the effort worthless. It also states, “Probably no one will be surprised if this estimate is off by a factor of 10 or even 100.”

Two important points arise from the details above: First, extinction rates based upon fossils are highly uncertain. Second, the above graph systematically understates the accepted background extinction rate of one species per year. In this chart, each vertical bar covers a period of about 500 years, and hence, the accepted background extinction rate would amount to 500 extinctions for each bar. This is roughly the same as the modern extinction rate displayed in the graph. Yet, the graph shows absolutely no extinctions for almost all of the older 500-year periods. Thus, it conveys the impression that thousands of years regularly elapsed without a single animal species among millions ever going extinct. This has the effect of making the recent number of extinctions look misleadingly large by comparison.

Other evidence suggests that the modern rate of extinctions is modest and unalarming. In 1977, President Jimmy Carter tasked the EPA, State Department, National Science Foundation, and several other federal agencies to produce a “study of the probable changes” to the “world’s population, natural resources, and environment” up through the year 2000. This turned into a herculean effort, involving hundreds of people, including “informal advisors” to the study representing the world’s leading environmental institutions. Among the many scholars in this list of advisors is John P. Holdren, who now serves as President Obama’s science czar.

In 1979, this dream team of scientists released The Global 2000 Report to the President of the U.S., which stated that under current polices and continuing technological progress, “at least 500,000-600,000″ species “will be extinguished during the next two decades.”

How close did this projection come to reality? Per a 2004 report by the International Union for Conservation of Nature, “At least 27 species are recorded as having become Extinct or Extinct in the Wild during the last 20 years (1984–2004).” The report notes other extinctions may have occurred, such as “eight species of birds,” but more research is needed to be certain.

Accounting for the fact that even modern extinction counts are not totally inclusive, even if 100 species went extinct in this period, the official government projection overshot the actual loss by 500,000 percent in just 20 years. Nonetheless, the authors of the paper in Science are insisting that the earth is undergoing an epidemic of land animal extinctions.

The authors admit there are no documented global extinctions of any marine animal for the past 50 years, but they maintain that “complacency” is “ill-advised” because of the recent spike in land extinctions and the chance that a similar trend is occurring in the oceans. Besides the fact that this spike may not even exist, the authors’ assumption that ocean extinctions may mirror the number on land is belied by data in a paper in the journal Diversity and Distributions.

This 2011 paper revealed that among the 190 documented extinctions of land-dwelling mammal and bird species since 1500 AD., only nine of them (six birds and three mammals) lived on major continents. The rest lived on islands, where populations are generally small and tightly restricted by physical boundaries. This represents a materially different situation from the oceans, where creatures can often roam widely. Marine creatures are restricted by environmental boundaries (such as temperature and salinity), but these are generally not as abrupt or unforgiving as the physical edges of islands. This casts serious doubt on the analogy between land and ocean extinctions drawn by the authors of the Science paper.

The habit of embellishing environmental threats is an ongoing problem among scientists and environmentalists, and this is recognized within this community. In a 2008 paper in the journal Endangered Species Research, Grahame J. W. Webb of the School of Environmental Research at Charles Darwin University in Australia documented that:

Overstating the risks of wildlife becoming extinct tends to be justified on the basis of the Precautionary Principle: better to overstate than understate risks. But in science, precaution means avoiding speculative conclusions drawn improperly from data. For most scientists, deliberate and gross exaggeration amounts to deception, which is considered unprofessional, unethical and shortsighted. …

Yet scientific precaution often clashes with the goals of advocacy… Exaggerating risks of extinction, whether ethical or not, is an effective political strategy for achieving conservation outcomes and the end justifies the means in the eyes of many. (Citations omitted)

Webb further explained that scientists who officially designate species as “endangered” are “often beneficiaries” of funding that flows as a result of these designations. Thus, “the potential for self-serving assessments has long been recognized.”

Environmentalists, government officials, and the innovators and laborers who produce new technologies deserve credit for making quantitative strides in improving the environment, particularly in the U.S. and other Western nations. Yet, the majority of Americans are unaware of these improvements, because individuals with public platforms have drastically overstated environmental risks and conditions, as in this Science paper.

This state of affairs may help environmental groups organizations raise money or help certain politicians get elected, but it inevitably misdirects attention and financial resources away from solving genuine problems, whether they be environmental or otherwise.

Widely Touted Study on State and Local Taxes is a Sham

By James D. Agresti
January 17, 2015

The Institute on Taxation and Economic Policy (ITEP) is a self-described “non-partisan research organization” dedicated to providing “accurate, timely, and straightforward information” about tax policies. In a new report on state and local taxes, ITEP declares that “virtually every state’s tax system is fundamentally unfair,” because they take “a much greater share of income from low- and middle-income families than from wealthy families.”

The findings of this study have been uncritically cited in prominent venues such as the Washington Post, CBS, the Daily Beast, Newsmax, the Providence Journal, and the New York Times. For instance, the Times reported that “according to the study, in 2015 the poorest fifth of Americans will pay on average 10.9 percent of their income in state and local taxes, the middle fifth will pay 9.4 percent and the top 1 percent will average 5.4 percent.”

Glaringly absent from the media coverage is how this study uses the same type of deceitful methodology behind claims that the middle class pays a higher federal tax rate than the top 1% of income earners, Warren Buffet pays a lower federal tax rate than his secretary, and Mitt Romney pays a lower federal tax rate than the middle class.

As Just Facts has documented in detail, all of those oft-repeated assertions are fraudulent, because they are based on calculations that exclude certain taxes, use partial measures of income, or employ both of these charades. The result is that the actual tax rates of the wealthy are understated, while those of others are progressively overstated as their income declines.

For example, Warren Buffett’s famous allegation that he pays a lower tax rate than his secretary is based upon the dishonest practice of using “taxable income” for his calculations. As the academic textbook Federal Taxation explains, using taxable income to calculate tax rates is “a bit misleading,” because this “is a very narrow measure of income” that says “little about the true impact of a tax on the taxpayer.”

Buffett and his secretary won’t release their tax returns, so there is no way to be exactly certain how this particular sleight-of-hand (they also use another) warps their true tax rates. However, a similar and less egregious ruse (using adjusted gross income) has the effect of artificially raising the average middle-class tax rate by at least 23% and Romney’s by less than 1%.

Similarly, ITEP uses a partial measure of income in virtually all of its studies, and moreover, it carefully guards this fact from the public. ITEP’s recent report on state and local taxes is 139 pages long, but the authors never bother to explain how they measure income. Instead, on page 135, they refer readers to the organization’s website for more details about how the study was conducted. The website contains a 17-page description of ITEPs “Tax Model,” which is used in most of its studies. Like the study, this lengthy description neglects to define how they measure income.

I first noticed this omission in 2012 and sent ITEP an email asking what measure of income they use in their tax model. When I didn’t receive a response, I followed up with a phone call, which they also failed to return. In other words, through both their publications and communications, ITEP has chosen to obscure how they arrive at one of the key variables used in nearly all of their tax rate calculations.

This led me to spot-check some of ITEP’s figures against those provided by the Congressional Budget Office (CBO). The results were appalling. For example, CBO’s comprehensive and transparent estimate of average income for the poorest fifth of Californians was at least 64% higher than ITEP’s ill-defined figure. This means that ITEP’s methodological ploy has the effect of inflating the tax rate for these people by at least 64%. Other ruses may be lurking in their tax model, because their description of it is vague on some key parameters like the incidence of corporate income taxes.

Nevertheless, the media has been reporting ITEP’s study without even a hint of skepticism, much less an investigation of how they arrive at their figures. That is not practicing journalism but doling out free publicity.

This kind of subterfuge has profoundly misinformed the American public. For instance, CBO’s latest estimates of effective federal tax rates show that the top 1% of income earners pay an average tax rate of 33% or 2.7 times more than the 12% rate paid by the middle class. Yet, for the third straight year, a scientific poll commissioned by Just Facts has found that roughly 80% of voters think the middle class pays a higher federal tax rate than the upper 1%.

Journalists, commentators, politicians, and organizations like ITEP have succeeded in manipulating the vast majority of Americans into believing the total opposite of reality about this and many other issues. This threatens harm to all Americans, regardless of their political inclinations, for as John F. Kennedy observed, “Only an educated and informed people will be a free people,” and “the ignorance of one voter in a democracy impairs the security of all.”

Misleading Claims that Fuel Hatred Against Police Officers

By James D. Agresti
January 5, 2015

In the wake of the killings of Michael Brown and Eric Garner, many people are accusing the police of rampant racism and callous disregard for the lives of African Americans. Most of these claims have been made by individuals who offer no objective evidence to support them, but some people have attempted to provide a factual basis for their accusations.

A prime example are the members of the New York Times editorial board, who wrote that a “grim report” by ProPublica shows “that young black males in recent years were at a far greater risk — 21 times greater — of being shot dead by police than young white men. These statistics reflect the fact that many police officers see black men as expendable figures on the urban landscape, not quite human beings.”

Unlike the Times editorialists, ProPublica emphasized that these statistics are based on data that “is terribly incomplete,” but even if it is roughly correct, this by no means shows that many police officers consider black men to be subhuman and disposable. As explained by ProPublica:

Many have pointed to our reporting as proof of police bias. That overstates our case; ProPublica found evidence of a disparity in the risks faced by young black and white men. This does not prove that police officers target any age or racial group – the data is far too limited to point to a cause for the disparity.

The unsupported assumption of the Times editors is that the disparity is primarily the result of racism, despite overwhelming evidence to the contrary detailed below. Without scrutinizing the facts of each case where the police killed someone, one cannot conclusively determine which of these killings were preventable. However, police are less likely to kill black people than others relative to the rates at which people of different races present a threat of murder.

People of African descent comprise 14.2% of the U.S. population, but in 2013 they were 54% of 10,020 murder offenders in cases where the races of the perpetrators were known and reported. This 54% figure is almost certainly lower than reality, because murders involving minority victims and offenders are far less likely to be solved, and the vast majority of murders are committed by people of the same race as their victims.

In comparison to the 54% of reported murder offenders who are black, 33% of 2,876 people killed by police from 2003-2009 in which the races of the deceased were reported were black. This data comes from a 2011 report by the U.S. Department of Justice, which notes that arrest-related deaths are “under-reported” and are “more representative of the nature of arrest-related deaths than the volume at which they occur.” It is the nature of these deaths that is relevant in this context, and thus, like the data from ProPublica, it sheds significant light on this issue.

In sum, black people represent 14% of the U.S. population, at least 54% of murder offenders, and roughly 33% of the people killed by police. These data indicate that relative to the murder threat posed by people of different races, police are less likely to kill black people than others. Nonetheless, the editorial board of the Times fueled hatred against police officers by accusing “many” of them of being cold-blooded racists who consider black men to be “not quite human” and “expendable.”

Of course, none of these facts excuse even a single unjustified killing by police. They do, however beg the question of why some people are protesting police with signs that say “black lives matter,” while many of the same people have been silent as more than 6,000 black people are murdered every year and a third of the perpetrators are never brought to justice.

Click here to be notified of new articles from Just Facts.

Solar Energy Costs and Impacts

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.”

Beyond corporate income taxes, governments also impose excise, sales and other taxes specifically targeted at fossil fuels in order to restrict their production and consumption.

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.

Pre-Election Poll: Voters Broadly Misinformed about Key Issues

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.

The poll results for all voters are available here, and the results broken down by political inclination, age, and gender are available here.

Current National Debt Situation is the Worst in U.S. History

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.

To begin with, the national debt is currently 103% of GDP, which is the largest it has been in U.S. history except for three years near the end of World War II:

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.

Additional Reading
Debt versus deficit: Obama’s bait and switch

Do large national debts harm economies?

Maddow’s tax and deficit doubletalk

Quantitative Easing: Who wins and who loses?

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 half-truth

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.

Real-world outcomes

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.”

Similarly, inflation-adjusted middle-class income fell during the recession, continued to fall even after the recession ended in 2009, and has scarcely rebounded since then:

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.

Media repeatedly deceives public in Hobby Lobby coverage

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.

Even among identical twins (who have exactly the same DNA), the burgeoning science of epigenetics has shown they still have biological differences that make each of them remarkably unique.

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.

Journalistic integrity?

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.

White House pledge on deportations belied by official data and actions

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.”

Click here to be notified of new articles from Just Facts.