Kevin Drum

Corn Ethanol: Still a Boondoggle

| Mon Mar. 1, 2010 10:00 AM EST

Corn-based ethanol is supposedly a green alternative to gasoline. The corn farming lobby certainly thinks so, anyway, and they've persuaded Congress to mandate (and subsidize) increased corn ethanol production through the year 2015.

But is corn ethanol really greener than gasoline? If you analyze total lifecycle emissions directly (i.e., including the CO2 emissions involved not just in burning ethanol, but also in producing it), the answer is yes, though not by much. But there's more to it than just production. When you switch forest or pasture land to cropland in order to grow more corn, that releases CO2 as well, and you have to take that into account whether the farm lobby likes it or not. (And they don't.) The chart on the right shows the effects. So what's the conclusion? A new paper in BioScience1 takes a fresh look at what the market response is to increased corn production, including (a) reduction in food consumption due to higher food prices, (b) intensification of agricultural production, (c) land use change into cropping in the US, and (d) land conversion in the rest of the world. The paper suggests that previous estimates of induced land use changes (ILUC) have been too high, but:

Using straight line amortization over 30 years of production at current fuel yields [] results in ILUC emissions of 27 g CO2 per MJ....[A]dding our lower estimate of emissions to the direct emissions from typical US maize ethanol production (about 65 g CO2e per MJ) would nearly eliminate carbon benefit of this biofuel relative to typical gasoline (94-96 g per MJ).

(Note: MJ = megajoule, a unit of energy.) In other words, even giving corn ethanol the maximum benefit of the doubt, it's still no greener than gasoline: it releases about 92 grams of CO2 per megajoule of energy compared to 94-96 for gasoline. What's more, if you assume a more reasonable 20-year amortization period, corn ethanol's greenhouse gas emissions are even higher. And if you don't assume that people eat less thanks to increased corn ethanol production, but instead just spend more on food, it goes up even more.

Bottom line: corn ethanol is no greener than gasoline. In fact, it's almost certainly less green, and at the very least, there's no urgent need for the U.S. government to pay billions of dollars to subsidize its production. Too bad Iowa is the first state on the primary calendar every four years, isn't it?

1No link yet. I'll add one if and when it's available. UPDATE: It's not online yet, but the reference is BioScience, March 2010 / Vol. 60 No. 3.

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The Real Case for Broken Government

| Sun Feb. 28, 2010 11:17 PM EST

Over at MoJoBlog, Andy Kroll declares that "Sen. Chris Dodd (D-CT) has dealt the death blow to consumer protection." He's talking about the Consumer Finance Protection Agency, a proposed federal agency that would (in Elizabeth Warren's words) regulate financial products the same way we regulate toasters. Republicans have been opposed from the start to a CFPA with teeth, and Dodd has finally given in. Here's the PowerPoint version of his latest proposal:

  • Instead of being an independent agency, the CFPA has morphed into a Bureau of Financial Protection within the Treasury Department.
  • The BFP would regulate large banks and mortgage companies. However, it would have no authority over banks with assets of less than $10 billion and it would have no authority over other non-bank financial institutions. (The BFP can petition for authority over other financial sectors, but this is almost certainly a fig leaf. It would never get it.)
  • States that want to enforce higher consumer standards for financial products wouldn't be allowed to. The BFP preempts all state regulation.
  • The BFP would have to confer with existing bank regulators before making any new rules, and its rules could be overriden by the Systemic Risk Council.

I don't have a good sense of how much Dodd is to blame for this toothless state of affairs. After all, Republicans instantly rejected even this watered-down proposal, objecting to the "rule-writing power Dodd proposed for the consumer division." But if they're objecting to rule-writing power, then they're simply objecting to anything that might have even the slightest chance of being effective. It's all kabuki.

This, far more than healthcare reform, is the most disturbing evidence of America's broken politics. After all, healthcare was always bound to be brutally partisan. Democrats and Republicans have been disagreeing about national healthcare for decades and there was no reason to think it would be different in 2009. We liberals may not like the result so far, but it was hardly unexpected.

But financial reform is different. Sure, Republicans are generally less enthusiastic about corporate regulation than Democrats. This was never going to be a chorus of Kumbaya. But Republicans aren't philosophically opposed to preventing economic meltdowns, and if there's anything that should have inspired even conservatives into agreeing that Wall Street needed to be reined in a wee bit, it was the reckless financial excesses of the aughts and the unprecedented economic devastation it provoked. The entire country is suffering through a grueling economic downturn that's the worst since the Great Depression, the collapse of 2008 makes the case for regulation almost irresistable, and even the GOP's tea party base is ready to lynch bankers on sight. The political case for regulation could hardly be more powerful.

But that hasn't made a lick of difference. Not a lick. On an issue where the facts on the ground were so compelling that Democrats and Republicans should have been easily able to forge a consensus for serious change despite philosophical differences, there's been barely even a recognition from conservatives that anything went wrong. It's as if Democrats had responded to 9/11 by flatly opposing any action whatsoever to beef up our anti-terrorist capabilities.

So what now? Unlike healthcare, where a weak bill is still worth passing because it might lead to stronger reforms in the future, I don't think you can say that about this. An agency with no rulemaking authority isn't going to suddenly gain some later on. It will just be one of those indestructible bureaucratic barnacles, taking up space in some federal office building forever without ever accomplishing anything.

Writing a decent bill and making Republicans kill it might provide Democrats with some kind of partisan advantage. Maybe. But passing Dodd's current proposal, let alone something even weaker, would certainly have no substantive effect, either now or in the future. There's literally no point in bothering to bring it to the floor. After going through the greatest financial catastrophe of our lifetimes, brought on by forces we understand perfectly well, we're going to do nothing to keep it from happening again. That's a broken government.

UPDATE: Paul Krugman writes essentially the same thing here. At this point, no bill might be better than what it's possible to pass in the face of Republican opposition.

LA-SF Reality Check

| Sun Feb. 28, 2010 1:57 AM EST

Well, that didn't take long:

Despite a new $2.25-billion infusion of federal economic stimulus funding, there are intensifying concerns — even among some high-speed rail supporters — that California's proposed bullet train may not deliver on the financial and ridership promises made to win voter backing in 2008.

....New inflation-adjusted construction figures show that outlays needed to build the first 520-mile phase of the system have climbed more than 25%, from $33.6 billion to $42.6 billion....Under the new scenario, one-way fares between L.A. and San Francisco rise from $55 to $105, closer to the cost of an airline ticket. The change shows healthier surplus revenue, which may appeal to private investors. But estimated ridership falls by about one-third, to about 40 million annual boarders in 2030.

So in a mere two years, projected ticket prices have gone up 90%, ridership has gone down 30%,1 and construction costs have increased 25%. There's nothing yet about increasing the projected travel time from its original, very optimistic, 2.5 hours, but I'm sure that's coming too. Who could have predicted?

1Actually, my recollection is that the original studies were based on a fantasy ridership of 100 million. So ridership projections are actually down 60%.

Daniel Ellsberg on the Limits of Knowledge

| Sat Feb. 27, 2010 4:55 PM EST

Jay Ackroyd went to a conference last week where he heard Daniel Ellsberg speak. He apparently recounted one of my favorite Ellsberg stories, and since it's one of my favorites I'm going to repeat it in full below. It's from Ellsberg's book Secrets, and the setting is a meeting with Henry Kissinger in late 1968 when he was advising him about the Vietnam War. The idea of Kissinger seeking out Ellsberg for advice on Vietnam initially seems a bit unlikely, but in 1968 Ellsberg was a highly respected analyst on the war who had worked for both the Pentagon and Rand, and Kissinger was just entering the government for the first time. Here's what Ellsberg told him. Enjoy:

"Henry, there's something I would like to tell you, for what it's worth, something I wish I had been told years ago. You've been a consultant for a long time, and you've dealt a great deal with top secret information. But you're about to receive a whole slew of special clearances, maybe fifteen or twenty of them, that are higher than top secret.

"I've had a number of these myself, and I've known other people who have just acquired them, and I have a pretty good sense of what the effects of receiving these clearances are on a person who didn't previously know they even existed. And the effects of reading the information that they will make available to you.

"First, you'll be exhilarated by some of this new information, and by having it all — so much! incredible! — suddenly available to you. But second, almost as fast, you will feel like a fool for having studied, written, talked about these subjects, criticized and analyzed decisions made by presidents for years without having known of the existence of all this information, which presidents and others had and you didn't, and which must have influenced their decisions in ways you couldn't even guess. In particular, you'll feel foolish for having literally rubbed shoulders for over a decade with some officials and consultants who did have access to all this information you didn't know about and didn't know they had, and you'll be stunned that they kept that secret from you so well.

"You will feel like a fool, and that will last for about two weeks. Then, after you've started reading all this daily intelligence input and become used to using what amounts to whole libraries of hidden information, which is much more closely held than mere top secret data, you will forget there ever was a time when you didn't have it, and you'll be aware only of the fact that you have it now and most others don't....and that all those other people are fools.

"Over a longer period of time — not too long, but a matter of two or three years — you'll eventually become aware of the limitations of this information. There is a great deal that it doesn't tell you, it's often inaccurate, and it can lead you astray just as much as the New York Times can. But that takes a while to learn.

"In the meantime it will have become very hard for you to learn from anybody who doesn't have these clearances. Because you'll be thinking as you listen to them: 'What would this man be telling me if he knew what I know? Would he be giving me the same advice, or would it totally change his predictions and recommendations?' And that mental exercise is so torturous that after a while you give it up and just stop listening. I've seen this with my superiors, my colleagues....and with myself.

"You will deal with a person who doesn't have those clearances only from the point of view of what you want him to believe and what impression you want him to go away with, since you'll have to lie carefully to him about what you know. In effect, you will have to manipulate him. You'll give up trying to assess what he has to say. The danger is, you'll become something like a moron. You'll become incapable of learning from most people in the world, no matter how much experience they may have in their particular areas that may be much greater than yours."

....Kissinger hadn't interrupted this long warning. As I've said, he could be a good listener, and he listened soberly. He seemed to understand that it was heartfelt, and he didn't take it as patronizing, as I'd feared. But I knew it was too soon for him to appreciate fully what I was saying. He didn't have the clearances yet.

Friday Cat Blogging - 26 February 2010

| Fri Feb. 26, 2010 2:54 PM EST

This has felt like a long week. Was it just me? Either way, I need to emulate my cats and catch up on some sleep this weekend.

And speaking of cats, here they are, just in the nick of time. On the left, Domino, as usual, has staked out one of the roving patches of sunshine in the house (entryway in the morning, top of the stairs in the late morning, in front of the dining room table in the afternoon, etc.). On the right, Inkblot is pursuing one of his favorite non-sleeping activities, namely preventing me from blogging.

In other news, Carly Simon has revealed that the subject of "You're So Vain" is named David. Let the guessing games begin anew!

The Hard Road Ahead

| Fri Feb. 26, 2010 1:53 PM EST

The path forward for healthcare reform is now widely agreed on: pass the existing Senate bill through the House, and then tack on a package of changes negotiated between the House and Senate that can be passed through both chambers on a simple majority vote via the budget reconciliation process. Simple. Except for one thing: who goes first, and what gets passed when? Michael Scherer outlines the process:

The Senate does not want to go first because Republicans will be able to bottle up the reconciliation process, delaying the vote and making for another ugly sausage making spectacle that Americans hate to watch. If reconciliation takes too long, the thinking goes, then the House will never act, and the whole health care deal will die. But if the House goes first by passing the Senate bill, and the president signs it, then the incentive for Republicans to bottle up reconciliation would be diminished. Health care reform would, at that point, already be law. The horse would be out of the barn. Republicans would then be obstructing fixes to the law that would make the bill, arguably, better by getting rid of stuff like the "cornhusker kickback," a much tougher proposition.

Here is where it gets tricky: The House is not going to vote on the Senate bill (even with a separate package of amendments to match the Senate's reconciliation) until it is dead certain that the Senate will act. So how could those assurances be arranged? With the help of C-Span cameras, of course, or perhaps a letter from 51 Democrats vowing to pass reconciliation come hell or high water. Once the letter is read on the nightly news, the House can act, and suddenly the pressure would be on the Senate Republicans. With health care already law, the GOP will have to decide whether or not to spend weeks gumming up the Senate to delay some amendments to that bill.

Without a doubt, the whole thing is a long shot. It's not clear that Pelosi has the votes she needs, but if she can get to 217, then it is unlikely to be all that difficult to get the Senate to 51, despite Republican carping over process. There is a path. It's tiny. But it's there.

Of course, Scherer has skipped a step here: coming up with the reconciliation compromise in the first place. It has to be something that can still get 51 votes in the Senate — which probably isn't too hard — and a majority in the House. And since abortion language can't be changed via reconciliation (it has nothing to do with the budget), that means the House majority has to suck it up and accept the Senate's abortion language. Considering that the Senate language is pretty stiff, that shouldn't be too hard, but if anti-abortion Dems are casting around for an excuse to vote No anyway, that would be a pretty handy one.

Anyway, I keep reading that the House and Senate hate each other's guts these days, which is going to make this whole process difficult. That seems crazy to me, since you'd think a bunch of professional politicians would have a pretty hard-boiled view of the institutional issues that affect both chambers. But in the same way that inter-party relationships have gotten far more personal and vitriolic since the Gingrich revolution, apparently so have intra-party relationships. Obama's got his work cut out for him.

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John McCain and California's Caps

| Fri Feb. 26, 2010 12:38 PM EST

During the healthcare summit yesterday, John McCain hailed California and Texas for implementing damage caps in medical malpractice suits. But then he stumbled a bit and decided he actually wanted to talk only about Texas, not California. He nervously made a lame joke about California stealing Arizona's water to cover this up, but at the time I tweeted: "McCain doesn't want to talk about California's damage caps. Why? Because it hasn't kept premiums down."

And it hasn't. We passed a law called MICRA in 1975 that limited noneconomic damages in malpractice cases to $250,000. Adjusted for inflation, that cap is now about the equivalent of $60,000. Nonetheless, its impact on malpractice premiums has been negligible. The chart below comes from the Foundation for Taxpayer and Consumer Rights, which definitely has a dog in the fight since it was founded by insurance industry scourge Harvey Rosenfield, who championed Proposition 103, an initiative that implemented state approval of insurance rates. It was passed in 1988.

Still, the results are pretty clear. After 1975, malpractice premiums continued to zoom upward, rising at an even higher rate than in other states. But after 1988 (that's the green line for easy reference), California premiums leveled off while rates in the rest of the country continued to rise. The reason for this is pretty simple: large damage awards are actually pretty rare and don't make up a huge proportion of total malpractice payouts. Capping them changes the picture, but it doesn't change it that much. But it does substantially cut into trial lawyer income.

Which, of course, is the whole point. If you want to annoy trial lawyers, you should cap damages. If you really want to reform malpractice law, however, look elsewhere.

Healthcare Summit: The Takeaway

| Fri Feb. 26, 2010 12:04 PM EST

Here's the lead story in the print edition of the LA Times this morning:

Democrats' next option: Go it alone

Facing unbending Republican opposition to a healthcare overhaul, President Obama confronted a stark reality Thursday as his televised summit ended: If he and his Democratic allies in Congress want to reshape the nation's healthcare system, they will have to do it by themselves.

I'm not sure how the summit is playing on TV, but this is, I think, about the best possible spin for Obama. If, over the next few days, the takeaway from the summit is that Republicans are just dead set against doing anything — whether due to principle or just political bloodymindedness, it doesn't matter — that helps his cause with both the public and his own caucus.

Healthcare Summit Wrapup III

| Fri Feb. 26, 2010 1:02 AM EST

A sampling of bigfoot liberal pundit reaction to the summit. Steven Pearlstein:

The most important thing Republicans think is that if there are Americans who can't afford the insurance policies that private insurers are willing to offer, then that's their problem — there's nothing the government or the rest of us should do about it....That was their clear message Thursday. It was their message during all those years when their party controlled Congress and the White House and they did nothing and said nothing about the plight of the uninsured. And it is clear that they would continue to do nothing if, by some miracle, Democrats were to drop their plan or embark on a more modest approach. For Republicans, the uninsured remain invisible Americans, out of sight and out of mind.

E.J. Dionne:

The Republicans simply don’t want to pass comprehensive health-care reform. That is the main lesson of today’s health-care summit.

Paul Krugman:

So what did we learn from the summit? What I took away was the arrogance that the success of things like the death-panel smear has obviously engendered in Republican politicians. At this point they obviously believe that they can blandly make utterly misleading assertions, saying things that can be easily refuted, and pay no price. And they may well be right.

Can't disagree with any of that! Still, my take is that the summit was basically a draw, but with a slight edge to the Republicans. They didn't have to win, after all. They just had to seem non-insane, and for the most part they did. What's more, Obama missed a chance to provide a punchy, 60-second sales pitch for the Democratic plan. A recent Kaiser poll that's been making the rounds shows that Americans don't like the Democratic plan but they do like the features of the plan. They just don't know they're there. So Obama should have outlined those features in quick, soundbite format. He missed a bet by not doing that.

What Happened to John Yoo's Emails?

| Thu Feb. 25, 2010 8:00 PM EST

Hmmm. "Most of" John Yoo's emails from his stint writing torture memos for the Justice Department were deleted before he left. You know, it takes a pretty deliberate effort to delete emails and make them nonrecoverable. CREW wants an investigation.