Month: August 2014

The head of the International Monetary Fund,
Christine Lagarde, outlined her agency’s proposal for imposing
taxes on various fossil fuels as a way to avert future man-made
global warming. Such taxes would encourage people to burn less
coal, oil, and natural gas and to switch to no-carbon energy
sources. In her presentation, Lagarde declared:

On this point, let me be crystal clear: we are generally talking
about smarter taxes rather than higher taxes.
This means re-calibrating tax systems to achieve fiscal objectives
more efficiently, most obviously by using the proceeds to lower
other burdensome taxes. The revenue from energy taxes could of
course also be used to pay down public debt.

We would expect these sorts of tax shifts to have limited
adverse economic effects—the whole point is to raise revenue in
ways that make the economy work better by fixing market
failures….

Using a single fiscal instrument targeted at a particular source
of environmental harm is both effective and administratively
simple. It is better than relying on a patchwork of uncoordinated
policies—such as telling some manufacturers to install certain
control technologies, requiring others to use certain fuels, or
rewarding households for buying certain vehicles.

The bottom line is that we can spur the same kinds of virtuous
behavior by using a much simpler tool—a single fiscal instrument.
And once we price bad things right, we will not need to
worry so much about subsidizing good things—like renewable
energy.

The IMF report sets fossil fuel tax rates at
different levels for each of 156 countries, taking into account
not only the future damages of climate change, but also benefits
like the number of lives that would be saved by reducing current
levels of air pollution. So how high would a tax on coal and
natural gas be for the United States? The National Journal

reports that the tax rate would be $8 per gigajoule of coal and
a bit over $3 per gigajoule of natural gas.

Roughly speaking a ton of coal contains somewhere around
25
gigajoules of energy, which implies a tax rate of $200 per ton.
Burning a ton coal produces about 2,000 kilowatt hours of
electricity. The average American household uses about 11,000
kilowatt hours annually, implying a hike in electric rates of
about $1,100 per year due to the new carbon tax. Since the average
monthly
electric bill is about $107, the IMF’s proposed tax hike on
coal would approximately double how much Americans pay for
coal-fired electricity.

A thousand cubic feet (mcf) of natural gas contains
about 1 gigajoule of energy. The average American household
burns about
75 mcf of natural gas annually so that implies a total tax
burden of $225 per residential customer.

Lagarde also calls for ending the massive
fossil fuel consumption subsidies that amount globally to $544
billion annually. On that point, she is certainly right.

I’ve got
a review of Guardians of the Galaxy, the latest movie
in the increasingly sprawling Marvel
Cinematic Universe, in this morning’s Washington
Times.

Short version? I liked it a lot.

Slightly longer version: Marvel’s interconnected universe, with
its long-running plotlines and teasers and recurring characters, is
advancing the TVification of movies. 

As television has become more cinematic, thanks to the growing
prominence of shows like “Game of Thrones” and “The Walking Dead,”
movies have become more like television.

Marvel is making a TV series for the multiplex, two hours and
$200 million at a time.

Nowhere is this more true than in the Marvel Cinematic Universe,
a sprawling and interconnected series of superhero films existing
in a shared story-world, with multiple overlapping characters and
lengthy plot lines that take years to fully play out.

There’s a visionary who oversees the writers and directors
working on the individual productions, and there are even teasers
at the end of each installment hinting at what’s to come.

Part of what continues to amaze me about Marvel’s success is
that the studio has turned what is essentially a niche product that
for most of its history was aimed largely at young boys into a mass
cultural phenomenon. Yes, the audience is still heavily male, and
it skews young. The larger world of Marvel toys and cartoons and
live-action
arena shows is obviously aimed mostly at school-aged boys. But
you don’t consistently
post Marvel-size box office numbers at home and abroad without
a fair amount of crossover appeal. 

The niche-weirdness of it all is especially on display in
Guardians, which revolves around characters that almost no
one outside the still-fairly-small world of paper-and-ink comic
book fans has ever heard of. And part of what struck me about the
movie is how much it draws from the zany pulp traditions of the
comics—the Nova Corps just sort of shows up without any
explanation, a major sequence takes place in a lawless mining
encampment built to harvest valuable goop from the severed head of
a dead celestial, one of the characters is a talking tree. It’s
just delightfully weird and outlandish. 

And Marvel’s success is not going unnoticed.
Disney, which owns Marvel and its characters, is planning a
similarly sprawling story
universe for its upcoming series of Star Wars films.
Warner Brothers, which owns DC Comics, Marvel’s main competitor in
the comic book world, has a
multi-character Justice League/Batman/Superman movie in
production, featuring such comic-book non-notables as Cyborg. Even
Universal is planning an
expanded movie universe based on its classic movie
monsters.

It’s happening on TV too, with spinoffs of
Walking Dead and
Breaking Bad on the way. There’s even
talk of a second Game of Thrones series. 

Interconnectedness and story sprawl are in. The
proximate cause for the current burst of connected story-worlds is
clear: Marvel, arguably the biggest success in Hollywood over
the last decade, is to credit (or blame).

But I think you can plausibly argue that in the larger sense
this is at least partially a function of the way that the Internet
trains people to think in and about interlinked webs of
information. Which is part of why I sense that not only are movies
and television becoming more like each other, they are also both
becoming more like comic books, which have relied on a combination
of pulpy genre stories and complicated—often contradictory
and borderline incomprehensible—narrative continuity for
decades. It just so happens that the folks at Marvel have been
telling stories in this complex, Internet-friendly way for decades,
so it’s probably no surprise that they were the first to
successfully exploit it on a wider scale. 

Previously on the lamest soap
opera ever made: A
judge would not authorize California to sell bonds to build the
first part of a leg of its boondoggle high-speed rail project and
ordered them to redo its business plan. Issues at hand included the
fact that the plan bore little resemblance any more to what voters
approved when they passed Proposition 1A back in 2008 and that the
state has not identified any sources of money to pay for the
estimated (as in, “the number that comes next is way too low”) $68
billion project beyond one short, unusable leg from Madera to
Fresno.

But late Thursday an appeals court overruled Kenny and gave the
state permission to sell bonds to start the project. From
The
Fresno Bee:

In ordering Kenny to vacate his ruling that the authority’s
preliminary financing was deficient, the appeals court said the
plan “was intended to provide guidance to the Legislature in acting
on the Authority’s appropriation request (in mid-2012). Because the
Legislature appropriated bond proceeds following receipt of the
preliminary funding plan approved by the Authority, the preliminary
funding plan has served its purpose.”

The ruling represents the second legal victory in a week for the
rail program at the appellate level. On July 24, a different
three-judge panel from the 3rd District ruled in the rail
authority’s favor and upheld Kenny’s approval of an environmental
impact report that selected the Pacheco Pass between Gilroy and Los
Banos as the preferred corridor for high-speed trains between the
Bay Area and the San Joaquin Valley. The San Francisco Peninsula
communities of Atherton and Palo Alto had challenged Kenny’s
approval of environmental work for the Bay Area-to-Central Valley
section of the rail line.

In the ruling (which can be read
here) the judges note that courts have previously upheld the
sale of bonds for public work projects that have changed
significantly from their initial proposals, which seems rather
disingenuous. The bullet train plan as it is now bears almost no
resemblance to what voters approved. The lawyer for the plaintiffs
fighting the train
takes note of what this means to the Associated Press:

Stuart Flashman, an attorney for the plaintiffs, said the ruling
“sends a really terrible message to Californians about whether they
can trust what’s on the ballot.” He had argued that the requirement
for a valid funding plan would not have been included in the ballot
measure if it was not paramount to protecting the
public interest.

“What this says, essentially, if I was your average voter and I
was looking at a ballot measure, I’m going to vote no,” he said. “I
don’t care what they promise me, I don’t believe it.”

That’s actually a pretty good lesson to learn, though it’s a
shame it required a giant, costly train system.

It’s still not over, though (it will never be over until Jerry
Brown dies). There is still a battle over whether the proposed
bullet train complies operationally within the criteria of
Proposition 1A, which mandates that the train make a full trip from
San Francisco to Los Angeles in under three hours and whether it
can operate without subsidies from the state. (Ha, ha! No.) Judge
Kenny will be tackling those claims probably later in the year.

In 1819, Chief Justice John Marshall famously
commented, “the power to tax involves the power to destroy” on
his way to ruling that it’s too dangerous to allow states the
authority to extract revenue from the federal government. And it’s
no shocker that the perils posed by the tax power to the federal
government are orders of magnitude worse when inflicted on
individuals and businesses. Unfortunately, John Marshall didn’t
spread his sense of mercy beyond the banks of the Potomac to others
who might find a similar dagger to their throats—such as Brandon
Spencer, the owner of an amusement arcade in Hanover,
Pennsylvania.

Andrew Staub at the PA Independent
has the story:

The small borough of Hanover has long been championed as the
Snack Food Capital of the World, but there’s no such grand
proclamation about the small York County town’s nightlife.

These days, though, a blast from the past is helping change the
downtown dynamic, but local officials could derail the
momentum.  The borough wants the TimeLine Arcade, which moved
into a former bank building just off the borough square last
October, to pay a massive amusement tax.

The owner of the arcade, Brandon Spencer, declined to pay what
he said would be a nearly $6,000 fee. That’s left the borough
council pondering whether it should change a four-decade-old
ordinance to make sure it applies to a more modern world.

Staub points out that Hanover’s downtown is rebuilding after a
period of decline—with Spencer given much of the credit by others
for spurring the revival with his museum-style arcade. He charges
by the hour to play his collection of classic pinball and video
games. Because his machines don’t take coins, he hasn’t had to pay
the “tax of $50 upon each
coin-operated amusement device” that dates back to the days
when Space Invaders was in every pizza joint.

Well, he didn’t have to pay it until the town decided, fuck it,
they’ll just send him a bill adding up to three months’ worth of
electricity costs anyway.

The kicker, though, is Council President John Gerken’s reaction
to the news that the tax is unaffordable for the arcade. “It’s not
government’s job to ensure that people stay in business, you know
what I’m saying? The laws have to be enforced, whether you like it
or not.”

Last week, New York City Mayor Bill de Blasio also
told us, “a violation of the law is a violation of the law,”
after cops killed a man over cigarette taxes.

So the sentiment isn’t confined to some burg in
Pennsylvania.

And if a law or tax happens to destroy, I guess that’s just too
damned bad.

On Sunday The New York
Times officially
turned against marijuana prohibition, and this week it has
followed up on that historic editorial with a series of essays on
various aspects of the issue. Tuesday’s
installment, headlined “The Federal Marijuana Ban Is
Rooted in Myth and Xenophobia,” accurately describes the irrational
origins of that policy. But as I point out in my latest
Forbes column, the Times conspicuously
overlooks its own role in disseminating the propaganda underlying
the war on marijuana. Here is how the column begins:

According to a recent poll by the Pew Research Center,
54 percent of American adults support marijuana legalization.
That’s around 130 million people. It turns out that some of them
are members of the New York Times editorial
board, which on Sunday declared that “the federal
government should repeal the ban on marijuana.”

Given its timing, the paper’s endorsement of legalization is
more an indicator of public opinion than a brave stand aimed at
changing it. Andrew Rosenthal, editorial page editor at
the Times, told MSNBC’s
Chris Hayes that the new position was not controversial among the
paper’s 18 editorial writers and that when he raised the subject
with the publisher, Arthur Sulzberger, “He said, ‘Fine.’ I think
he’d probably been there before I was. I think I was there before
we did it.” Better late than never, I guess, although I confess
that seeing a New York Times editorial in favor
of legalizing marijuana briefly made me wonder if I’ve been wrong
about the issue all these years.

In their gratitude for the belated support of a venerable
journalistic institution, antiprohibitionists should not overlook
the extent to which the Times has aided and
abetted the war on marijuana over the years. That shameful history
provides a window on the origins of this bizarre crusade and a
lesson in the hazards of failing to question authority.

Read the whole thing.