2022 State Ballot Hodgepodge: My Take on the Results Regarding Taxes, Pot, Civil Liberties, and Other Topics

Another Election Day is behind us. When November takes place, it is not only about which party gains control of Congress or whether there are more governors of one party versus another. I relish the state and local ballots to see what issues matter to the people. It comes with a wide variety of topics and multiple implications for peoples' lives. In 2020, I wrote a hodgepodge of analysis on state ballot initiatives that covered such topics as taxes, the gig economy, marijuana, and minimum wage. Instead of looking at many of these prior to Election Day, I decided to do this year's ballot hodgepodge after the elections so I can reflect on some of the decisions voters made across the United States. Below are some of the notable results. For additional information on the given ballots, you can go to Ballotpedia for excellent coverage. 

Recreational Marijuana Legalization: It should be no surprise that I am for marijuana legalization. That is why last Tuesday was a mixed bag in this category. There were two states that voted in favor of legalizing marijuana in their states: Maryland and Missouri. This brings the count of states that have legalized recreational marijuana to 21 states plus the District of Columbia. The downside of the ballot results is that three states rejected legalizing recreational marijuana: Arkansas, North Dakota, and South Dakota. Even so, I remain optimistic that the United States is heading toward the path of legalizing it across the nation so we do not have to have this debate anymore. 

Decriminalizing Psychedelics: Oregon was the first state to legalize psychedelics. This past Tuesday, drug legalization had another victory. The state of Colorado voted to decriminalize psychedelics. You can read my 2019 piece on why psychedelics should be legalized. 

Millionaire Taxes: California proposed enacting a 1.75% individual income tax on those making over $2 million. This tax revenue would have gone towards providing incentives towards purchasing electric cars, charging infrastructure, and wildlife prevention. Thankfully, California rejected Proposition 30. Given that California ranks 46th on state-local tax burden (Tax Foundation), I'm both surprised and relieved. I wish I could say the same for the Commonwealth of Massachusetts. The Bay State voted to create an additional 4 percent income tax on those making over $1 million. This 4 percent is on top of the 5 percent in state income tax they already pay. As I pointed out in my analysis on Massachusetts' millionaire tax, this is going to have considerable and negative impact on the Bay State's economy. 

Flavored Cigarette Ban: California passed a ballot initiative (Proposition 31) to uphold its ban on flavored cigarettes, which includes menthol cigarettes. In June, I compiled a list of eight reasons as to why we should not have menthol cigarette bans, which included economic, public health, and criminal justice explanations.

Sports Betting: Another reason to be irritated with California voters. California proposed two initiatives on the topic: one to allow for sports betting on Native American lands (Proposition 26) and one to legalize online sports betting with platforms that have agreements with Native Americans (Proposition 27). Both propositions got shot down by the California populace. Setting aside how this affects the Native American population and an ability to make greater revenue off an activity for which there is clear demand, I made an argument a couple of years ago in favor of sports betting. 

Minimum Wage: Nevada will set its minimum wage to $12/hour by July 2024. Nebraska is set to raise its minimum wage to $15/hour by 2026. I have written on the topic of minimum wage multiple times, and I am unhappy with these outcomes to say the least. 

Data Privacy and Due Process: Through Measure C-48, Montana amended its constitution to include electronic data and communication in search and seizure protection. Montana joins Michigan and Missouri as the only states with explicit protections in their state constitutions. As far as I am concerned, this is a victory for due process.

Abortion: Three states voted to enshrine abortion rights in their state constitutions: California, Michigan, and Vermont. Kentucky rejected enshrining the illegality of abortion in their constitution, although it is de facto illegal in Kentucky. Montana rejected a law that would require medical care to infants born alive, which would have included those born in botched abortions. If we look at abortions strictly from ballot initiatives (without factoring in pro-life governors that won their elections), then it looks like a good night for those claiming abortion to be a right. I am a pro-life libertarian, which puts me in an atypical position for a libertarian. I also view Roe v. Wade as shoddy constitutional law, which means that states navigating the topic at least removes the legal and constitutional concerns I previously had. 

Ranked Choice Voting: As of June 2022, only Alaska and Maine have had ranked choice voting on federal or state-level voting. Nevada has become the third state to do so. I understand the appeal of having more options and to have your vote more accurately reflect your preferences. I also understand how this could make counting ballots more complicated. I would need to look further into this topic before having a more defined opinion. 

Enslavement and Indentured Servitude: I am working on a separate piece for this particular topic. Since that analysis is pending, I do not want to say too much at this time. However, there were five states that were looking to modify their state amendments to not allow for forced prison labor. Four of the states succeeded: Alabama, Oregon, Tennessee, and Vermont. The fact that there are fewer places where slavery or indentured servitude is a punishment for a crime is a win for civil liberties.

Greenpeace Admits that Recycling Plastic Is Feel-Good Folly

Reduce, Reuse, Recycle. 

This environmental adage became popular in the 1970s. I remember it being reinforced multiple times throughout my childhood. It was a way of developing an environmental ethos. What I noticed is that more emphasis was being put on recycling, perhaps because recycling is the easiest of the three to accomplish in a consumerist, throwaway society. Reducing one's consumption when bombarded by advertisements and using material consumption to fill a void is difficult. Reusing involves forethought and planning. Recycling involves some labor, especially when cleaning recyclable goods. Even so, throwing away goods in the recycling bin is easier than the other two R's. 

Recycling also happens to be the most feel-good of the three R's. Less than a month ago, the environmentalist nonprofit Greenpeace released a report entitled Circular Claims Fall Flat. In the report, Greenpeace points out why recycling plastics fails:

Mechanical and chemical recycling of plastic waste has largely failed and will fail because plastic waste is: (1) extremely difficult to collect, (2) virtually impossible to sort for recycling, (3) environmentally harmful to reprocess, (4) often made of and contaminated by toxic materials, and (5) not economical to recycle. Paper, cardboard, metal, and glass do not have these problems, which is why they are recycled at much higher rates. 

While this is a step towards a more rational dialogue on environmental policy, Greenpeace is late to the party. In 2013, I went through the economics of recycling and how recycling plastics did not make sense. I did point out that recycling cardboard, paper, aluminum, asphalt pavement, iron, and steel was a more sensible practice. Not only has recycling has become more expensive to sort and transport, but single-sort recycling has increased contamination rates. These trends have made it more difficult to find buyers of recyclable goods, which was something I pointed out last year.

Furthermore, the Greenpeace report proceeds to call for phasing out single-use plastics. That does not seem practical, particularly with public health. Single-use plastics are especially useful for syringes, applicators, drug tests, bandages, and wraps. This does not consider plastics usage in other sectors. Yes, we need to consider our consumption patterns for the long-run. Much like with renewable energy, we need to be realistic and take a more gradual approach to ensure that both economic and environmental considerations are taken into account. 

How Fiscal and Monetary Policy Greatly Contributed to the 2021-22 Inflation Spike

A couple of weeks ago, I illustrated how profit margins and corporate greed were not ultimately responsible for the inflation spike in the United States. I also covered other plausible causes that could be attributing to the unusually high inflation, ranging from labor shortages and supply chain shocks to the pandemic and COVID-related restrictions. Today, I would like to cover two types of government policy that played their major role in our current round of inflation: monetary and fiscal policy. 

Monetary policy is the set of actions set by the monetary authority, typically a central bank, to control money supply and spur economic growth. In the United States, that authority is exercised by the Federal Reserve Bank. While it is one of their mandates to keep inflation at 2 percent, the Fed has contributed to the inflation. The Federal Reserve's role in inflation can be expressed with the quantity theory of money (QTM). QTM posits that "the general price level of goods and services is proportional to the money supply in the economy." The formula looks like the following: 

MV=PQ

As the St. Louis Federal Reserve illustrates in its primer, M stands for money supply. V stands for velocity, or the rate at which people spend money. P is the general price level, whereas Q is the quantity of goods and services produced. One of the Fed's main policy decisions during the pandemic was to expanding monetary supply (FRED).

Not only did money supply skyrocket, the money velocity started to increase in the fourth quarter of 2020 (FRED).

Going back to the formula MV=PQ, the left side of the equation increased. That means the right side of the equation has to increase in order to match the left side, whether it is from either price increases or an increase of quantity of goods and services produced, or a combination of both. It theoretically could be caused by an increase of both P and Q. 

In practice, we have been dealing with and are still dealing with a supply chain crisis. This bottleneck makes it a lot more difficult for the quantity of goods and services to grow. The inability to expand output (Q) means that the increase of aggregate demand puts upward pressure on prices. In other words, expansionary monetary policy in an economy with constrained economic output results in inflation. 

Researchers at Johns Hopkins and the Federal Reserve Bank of Chicago admit that tightening monetary policy could have averted the inflationary pressures (Bianchi and Melosi, 2022). On top of this mess, the Fed kept interest rates at historic lows through 2021, which only seemed to boost consumer demand and keep prices increasing. 

To read more on how expansionary monetary policy caused high inflation in 2021 and not in 2008, you can read this report from the Fraser Institute (Globerman, 2021).

While monetary policy contributed to the inflation, the other major culprit is Congress. Fiscal policy is the usage of government spending in taxation in attempts to influence the economy, which is mainly the purview of Congress since it is the legislative branch. During the pandemic, there were multiple spending bills passed in the name of COVID relief. These spending bills were very much demand-side in nature, especially the economic stimulus payments. In December 2020, I expressed concerns of how the payments would spur consumer demand and were ultimately not necessary. It turns out that I was correct. Here is some research and expert analysis showing that the government's spending packages contributed to inflation: 

• Researchers at Johns Hopkins University and the Federal Reserve Bank of Chicago found that while the spending accelerated the economy, it also resulted in fiscal inflation (Bianchi and Melosi, 2022).
• Marc Goldwein of the bipartisan Committee for a Responsible Federal Budget acknowledged that we would still have had 2-3 percent inflation without the American Rescue Plan (ARP) Act. Goldwein stated that the ARP was adding fuel to the fire of inflation. Similarly, economists on the Left and Right estimated that the ARP contributed to 2-4 percentage points in inflation. 
• The Tax Foundation points out how in 2020-21, the United States had the second largest stimulus spending as percent of GDP ratio. To understand how fiscal policy attributed, you can read a draft of "The Fiscal Theory of the Price Level" by Hoover Institution scholar John Cochrane. 
• The Federal Reserve Bank of San Francisco shows that both the CARES Act under the Trump Administration and ARP increased disposable income higher relative to other countries. This led to core inflation (i.e., consumer prices minus food and energy) being higher in the United States relative to other countries (see below). The Bank estimated in March 2022 that the expansionary fiscal policy increased inflation by 3 percentage points (Jordà et al., 2022).

There is a lot going on here, so let's recap. The pandemic was the epicenter for this snafu. There was bound to be some economic disruption caused by the pandemic. COVID regulations exacerbated the economic impacts, especially when it came to economic output and supply of goods and services. Shutting down large swathes of the economy with lockdowns disrupted the ability to work and generated the loss of customers, thereby limiting supply of goods and services. In 2020, the Fed increases money supply in a way that made the quantitative easing of the Great Recession look tame. It miscalculated the supply chain bottlenecks, which put inflationary pressures on prices in the macroeconomy. 

In the meantime, economic stimulus payments boost consumer demand, which is the wrong thing to do when supply is much more of an issue than demand. The stimulus payments were burning a hole in the pockets of American consumers and they were just itching to spend more, in spite of the inflationary pressures caused by monetary policy. This is especially true of the American Rescue Plan since a) there was higher money supply, b) there was the CARES Act, c) more people were getting vaccinated, and d) businesses started to open again. 

Yes, there were multiple factors to create this debacle. But make no mistake: expansionary monetary policy and expansionary fiscal policy were major contributors to the inflation that we have been experiencing for over a year now. 

Massachusetts Millionaire Tax Will Cost the Commonwealth Much More Than a Pretty Penny

An even-numbered year in U.S. politics means it is an election cycle. One of the aspects of the election cycle I enjoy most is the ballots on the state and local level. The variety of topics and the potential impact I find intriguing. This election cycle will bring ballots on abortion, as well as five states determining whether marijuana should be legal. While those are important topics, the ballot that I think is most consequential this election cycle is in the Commonwealth of Massachusetts. 

This month, the citizens of Massachusetts will vote on a ballot called the Tax on Income Above $1 Million for Education and Transportation Amendment (also known as Question 1 or the "Massachusetts Millionaire Tax"). Question 1 asks whether the state government should amend the state constitution to create an additional 4 percent income tax on those making an income over $1 million. For millionaires, this would be an additional 4 percent on the already-existing 5 percent, thereby bringing the total to 9 percent. The Tax Foundation has a nice map of state income tax rates (see below). By New England standards, the Massachusetts state income tax is relatively low. That would change if Question 1 passes.

Fair Share MA, who are the main proponents of Question 1, argue that this will make the Commonwealth better for all, especially since the funds would be directed towards public education, roads, bridges, and public transportation. For public education in particular, this funding would help students in public schools to thrive. This, of course, ignores how the school closures disrupted learning in the pandemic in the first place. Leaving that aside, the premise of the argument is that this tax revenue would help the economy and help the Commonwealth recover from COVID-19. 

I get skeptical when people talk about "fair share" with taxation because it such a subjective concept. I have analyzed multiple attempts at making taxation "fairer," whether that has been the wealth tax, the corporate tax, Illinois' failed attempt to pass a "fair" state income tax, or the marginal tax rate for federal income taxes. An attempt to make taxation "fairer" often leads to negative unintended consequences. I have to wonder whether the tax proposed in Question 1 will have similar, negative effects. 

Tax Revenue

A report from Tufts University's Center for State Policy Analysis evaluates the Massachusetts Millionaires Tax. Tufts calculated that the tax would raise $1.3 billion of revenue in 2023, which is the equivalent of 0.3 percent of Massachusetts state income. A report from the think tank Beacon Hill Institute comes to similar findings with tax revenue (see below). The Tufts study finds that short-term economic impact would be negligible. 

The Tufts study posits that the size of the tax is too small to have any major economic impact. At the same time, it recognizes that the tax revenue from this tax would be 35 percent higher if it were not for tax evasion and cross-border migration. Most of that tax loss in 2023 would be due to tax evasion ($670M), as opposed to cross-border migration ($100M). I appreciate the sense of nuance because I recognize that tax policy goes well beyond the over-simplified argument of "lower taxes = good; higher taxes = bad." 

Negative Economic Impacts

The Tufts study comes up short because it only asks what the impacts on the tax revenue are. While it mentions other economic impacts, it does not attempt to quantify them. Tax evasion and cross-border migration have economic impacts both in the short-term and the long-term. The Tax Foundation makes this point abundantly clear in its analysis on the Massachusetts Millionaire Tax. 

Declining GDP Output: The Tax Foundation cited a paper from economists Christina Romer and David Romer (Romer and Romer, 2010). Both are Keynesian economists and the former worked in the Obama administration. The Romers found that a tax increase equal to 1 percent of GDP results in a 3 percent decline of GDP in three years. Using that ratio and applying it to this Millionaires Tax, it would mean that the Commonwealth would lose an estimated $5.96 billion in GDP output by the end of 2025. The catch is that the Romer finding is based on federal income tax data. Since it is easier to avoid state-level taxes than it is federal-level taxes, it is likely that this $5.96 billion in lost GDP is a low-bound estimation. 

Labor Fleeing the Commonwealth: Not only will the GDP decrease as a result, but so will the labor market. The Beacon Hill Institute report estimates that employment will drop by 9,329 individuals within the first year due to people leaving the Commonwealth (see below). This is not merely conjecture. A paper from the Journal of Economic Perspectives, which includes economists from Princeton and the London School of Economics, recognizes that high-income individuals sometimes move across borders in response to higher taxes (Kleven et al., 2020). Again, the Tufts study also recognizes there will be at least some outmigration. 

Adjusted Gross Income: What should be more disconcerting is the net outmigration of adjusted gross income (AGI). As the Tax Foundation astutely points out, AGI is an important metric because income levels drive household spending. In terms of tax revenue, 57 percent of Massachusetts state tax comes from the individual income tax. Massachusetts has had net negative AGI since 1993 (see below). 

In 2020, the biggest destinations for net migration Massachusetts AGI were New Hampshire and Florida, which are both states without income tax (see below). This trend largely held true between 2012 and 2020. If this ended up being the case before the Millionaires Tax, imagine how much more migration there will be if the tax is passed. 

Will The Tax Revenue Be Spent on Education and Transportation?

Then there is the matter of how the tax dollars are actually spent. Tufts University believed that long-term economic impact would depend on whether the funds are actually used to increase education and transportation investments. This is because the tax revenue dollars remain fungible, which is to say that other tax dollars could be spent in a way that allows for the overall budgetary state of affairs for education and transportation to remain roughly the same. Plus, the text of the ballot measure clearly states that the revenues are "subject to appropriation," which means that the taxes can ultimately be spent on whatever the Commonwealth wishes.

Is This Additional Tax Revenue Necessary?

This also assumes that there needs to be increased expenditures. In general terms, Massachusetts tax revenue has been growing even in spite of the pandemic and lockdowns. You can see the Commonwealth's tax revenue data, as well as the data from the Federal Reserve Bank of St. Louis (see below). The graph below looks a bit volatile because the Fed collects and reports the data on a quarterly basis, with the fourth quarter being the largest quarter for tax collection purposes. Even so, the overall trend is still an upward one.

While increasing education spending has wide political appeal, Massachusetts already has the seventh highest per capita education spending. What about transportation? In its report on state highway performance rankings, the Reason Foundation ranked Massachusetts 47th in cost-effectiveness and condition. To quote Beacon Hill Institute report, "outside of general repairs and maintenance, the case for higher spending on transportation in Massachusetts is weak."

It Does Not Only Affect Millionaires

In spite of the title "Millionaire's Tax," it will not only affect the super-wealthy. This has the potential to hit middle-class workers who would be deemed "one-time millionaires." A small business owner (e.g., subchapter S-corporation, LLC, partnership) can sell their company, either at retirement or beforehand. This sale counts as "pass-thru income" on their individual tax forms, thereby making it taxable under the proposed constitutional amendment. This tax would diminish an owner's retirement savings. What about someone who decides to sell a home? If someone sells a modest vacation home that they bought 30 years ago, it could push them in this new income bracket that would raise their taxes by 80 percent. Such taxation can adversely impact the investments, including the nest eggs, of non-millionaires who are looking to retire. While this tax policy will not directly affect low-income households, this point serves to illustrate how imprecise tax policy can affect more than the millionaires that the amendment seeks to tax. 

Postscript

Massachusetts has been faced with five previous attempts within the past century to soak the rich with taxes: 1962, 1968, 1972, 1976, and 1994. Each time, this relatively liberal state has been able to avoid such temptation. Given the increased political discourse around income inequality and "tax the rich" that has taken place since 1994, I have to wonder if the Commonwealth can resist such temptation. 

The flat income tax is one of the only advantages of the Massachusetts tax system, according to the Tax Foundation's State Business Tax Climate Index. If passed, it would most likely be a repeat of what happened in Connecticut when it switched to a highly progressive tax system in 1996: lower GDP, higher unemployment, and higher migration to other states. The economy is not some abstraction or mere collection of numbers. Economic climate affects the overall wellbeing of everyone, not just millionaires. 

Massachusetts has struggled with outmigration of economic activity for a number of years. This surtax on millionaires would only exacerbate economic trends in the Commonwealth. I hope that Bay Staters can resist the urge of populist economic policy and vote "No" on Question 1 this November. 

Corporate Profits Are Not a Main Cause of the 2021-22 U.S. Inflation Spike

There are many reasons being floated around for why inflation has spiked in 2021 and 2022. I have  blogged on the possibilities of unemployment benefits and expansionary monetary policy, as well as the supply chain crisis. There is another theory making its rounds in political discourse: corporate greed.

During a House of Representatives hearing last Wednesday, Representative Katie Porter (D-CA) grilled macroeconomist Michael Konczal of the Roosevelt Institute. Part of Porter's tirade was pulling out an enlarged chart from the Left-leaning Economic Policy Institute. According to this chart (see below), corporate profits are responsible for about half of the inflation spike. A day later, Whoopi Goldberg chided the media for not reporting on the supposed cause of inflation: corporate profits. 

The reason why this theory of "greedflation" is becoming more popular is because a) corporate profits have reached a 70-year high (Federal Reserve), and b) corporate profit margins have not been this high since the 1950s (see below; also see Bureau of Economic Analysis data). 

The high level of profit margin presents a "chicken versus egg" debate. The New York Federal Reserve Bank found a relationship between the producer price index and profit margin, which suggests correlation. Interestingly enough, the Bank points out that "the relationship between inflation and profit growth is not unusual in the historical context."

 

Even with correlation, you need to ascribe a causal mechanism in order to explain the correlation. Did the inflation come first and the corporations raise their prices in response? Or did the corporate profit margins trigger the inflation? If the former is correct, that would mean corporations were responding to market forces. If it is the latter, that would suggest "greedflation." While the Federal Reserve Bank of New York remained agnostic as to the correlation mentioned in the previous paragraph, I have some reasons to question the theory that corporate profits caused inflation.

1) Let's get at the intuition of the price-gouging behind the "greedflation" because it does not make sense. To pose the rhetorical question presented by the Mises Institute:

Why, then, has inflation only recently exploded after 40 years of calm, now clipping at better than four times the Federal Reserve's target annual rate of two percent?

It is not as if people were naturally benevolent throughout history and the pandemic magically turned people greedy. People have always been self-interested creatures; it is a natural part of the human condition. Part of the theory of the firm, which is a part of numerous economic schools of theory, states that the main reason a [for-profit] firm primarily exists and make decisions to seek profit. Firms are greedy in the sense that they exist to maximize their own profit. To quote Adam Smith from the Wealth of Nations, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." 

Standard microeconomic theory teaches that firms cannot charge whatever they want. If they charge too much, fewer people will buy their goods or services, and they will incur losses. For firms, profit maximization is finding that sweet spot between charging as much as they can while still brining in the optimal amount of revenue. As political commentator Hannah Cox brings up, what is problematic with the mainstream Left is that "these people have no idea how markets work or what conditions actually create prosperity." I know there are some on the Left that still recognize such economic realities as markets or prices, but the political rhetoric that is permeating more on the Left shows that such individuals become fewer as the mainstream Left embraces class warfare more and more.  

2) The Producer Price Index (PPI), which measures production costs for businesses, has been on average higher than the Consumer Price Index (CPI). How can producer prices increase more than consumer prices? The Mises Institute rightfully distinguishes between corporations and businesses. According to a 2019 report from the Small Business Administration (SBA), small businesses account for 44 percent of the GDP. Small businesses have a harder time bearing the cost of external events than corporations. Rather than being motivated by avarice, small businesses are increasing their costs because they are responding to market forces.  

3) Professors from Brandeis University and New York University published a CNN article showing why it is not "greedflation." They found a more plausible factor contributing to the high level of inflation: the labor shortage. Not only is unemployment under 4 percent, but there are nearly two vacancies for each person searching for a job. Wages and salaries increased to bring in more workers. On top of that, firms were still hiring workers. Since labor compensation is typically the largest cost for a firm, it eats away at profit. If the labor market tightness continues, we will continue to see labor cost inflation.

4) If greed causes inflation, then it would stand to reason that greedier countries would have higher rates of inflation. The American Institute for Economic Research (AIER) does something interesting. AIER takes 2021 data to compare the inflation rates of multiple countries with their rankings on the Charities Aid Foundation (CAF) World Giving Index. As you can see with the chart below, there is a lack of correlation between inflation and the CAF's metric of measuring greed. 

5) To quote Wharton School Professor Z. John Zhang, who is a Director at the premier business school: "If there is any truth to greedflation, it's that businesses are eager to pass along their increased cost to consumers because consumers are more receptive right now to price hikes...but that doesn't mean that firms are manipulating the markets through collusion." 

I would ask why consumers are more receptive to price increases. Catherine Rampell at the Washington Post brought up many points that I did in September 2021 that point to significantly more plausible culprits to the unusually high levels of inflation in the United States. 

• The Federal Reserve maintained low interest rates while increasing money supply by 40 percent since the beginning of 2020 (Federal Reserve). Having more dollars chase the same amount of goods and services increases prices.
• Expansionary monetary policy was combined with expansionary fiscal policy in the form of stimulus payments that boosted consumer demand, thereby increasing consumer prices. 
• In the meantime, labor shortages, supply shocks, and COVID-related disruptions limited the supply, which also drives up prices. 
• Companies cannot produce fast enough and the government has induced people to want to consume more, which means consumers are willing to pay more. 

The list above is a brief summary of how the United States Congress and the Federal Reserve contributed to rising prices without getting into other such plausible causes of inflation as China's COVID-related restrictions, how the war in Ukraine affected inflation in 2022, or any other market-specific trends that arose as a result of the pandemic. What I hope to discuss in further detail in a future post is how the government played its role in unusually high inflation rates. What I will say in the meantime is this: It might be a convenient scapegoat during an election season, but there is not much basis that corporations are the cause, let alone a primary cause, of the rising inflation.

11-7-2022 Addendum: A good colleague of mine read this piece and asked what was wrong with the EPI's chart I posted at the beginning. My short answer was that there was not a correlative impact on inflation. Below is data from the Federal Reserve Bank of St. Louis (FRED) on the corporate profits after tax as a percentage of GDP. See the more variable nature of the chart. 

Here is the Bureau of Labor of Statistics data for the CPI for All Urban Consumers (CPI-U). This is a much more gradual increase, with 2021-22 being a notable exception. If corporate profits were historically responsible for major spikes in inflation, we would have seen more inflation spikes since 1950. Since this is not the case, corporate profits do not have a correlative impact, never mind a causal impact. 

Is Climate Change Affecting Species Extinction? Is There Any Reason for Some Optimism on the Theme of Species Extinction?

Last week, a good friend of mine read my blog entry on hurricanes and how climate change is not making hurricanes more frequent or intense. He thought it was well-researched and agreed with the ultimate conclusion. Part of his reply was that hurricanes are only a part of the potential impact of climate change. He specifically asked about whether climate change is exacerbating the extinction of animals. He pointed me to an article from the Guardian that linked a report from the World Wide Fund for Nature. The WWF report found that the global animal population has declined 69 percent in the past 50 years (see below for regional breakdown). Four years ago, that figure was at 60 percent. 

I already feel some skepticism not simply because it is in my nature to be skeptical, but also because there historically has been alarmism from environmentalists. On the theme of climate change, climatologists like to use highly improbable, worst-case modeling to make their point. This is not to say that global temperatures are getting warmer or humanity has not contributed in any respect, but there have been environmentalist doomsday predictions about climate change for decades that never came to be. Thomas Malthus predicted mass starvation due to a growing population when he turned out to be wrong. Rachel Carson did not fare much better with Silent Spring. There were also the scares of acid rain and nuclear winter that did not pan out.

It is due to this historic alarmism that I want to see if species extinction is as bad as it sounds. First, I would like to point out that some species extinctions are bound to happen. The background rate of extinction, which is the pre-human rate that would occur naturally, is about 0.1-1 per 10,000 species per 100 years (Ceballos et al., 2015). Also, 99.9 percent of species have already gone extinct. There have been five extinction events, including the one that wiped out the dinosaurs in the Cretaceous era about 66 million years ago.

Pointing out that species extinction is naturally occurring is not to say that humans have not had an impact on the environment. As the Royal Society points out, human effects on global diversity date back 60,000 years. The year 1500 was when human-induced extinction kicked in and increased the extinction rates (see above), and that has only seems to have worsened since the Industrial Revolution. A study shows that some species would have survived an extra 800 to 10,000 years if it were not for human activity (Ceballos et al., 2015).

This conversation gets further blurred with the idea of speciation, which is the creation of new species. There might be more species in net due to human speciation, although this article from The Atlantic shows that it could come with a cost to biodiversity. The Royal Society discusses how speciation works along side of species extinction. 

The International Union for Conservation of Nature (IUCN) has a Red List with number of endangered species. The Red List has identified more than 41,000 species that are threatened with extinction, although that is likely an underestimation of the actual number. That sounds like a lot of species at first glance. However, we need to answer an even more important question: how many species are on the planet? It makes sense to answer this question to contextualize the species extinction. What is the answer to that question? 

As of 2019, we have identified 1.6 million species. One renowned study estimated that the total count was 8.3 million species (Mora et al., 2011). Scientists have estimated that the range could be from anywhere between 5 million and 1 trillion. This wide range of uncertainty makes it difficult to pinpoint the magnitude of the problem, although we have at least a low-bound estimate. Even if the number is low, it does not stretch the imagination as to how the extinction of certain species can have a ripple effect on various ecosystems. At the same time, multiple species have been wiped out of existence and the planet lives on. 

To play Devil's Advocate, here is an article from the Washington Post in which George Washington University biology professor R. Alexander Pyron argues how preserving biodiversity should not be an ends unto itself, in no small part because species extinction is inevitable. Pyron's solution is moderation:

While we should feel no remorse about altering out environment, there is no need to clear-cut forests for McMansions off 15-acre plots of crabgrass-blanketed land. We should save whatever species and habitats can be easily rescued, refrain from polluting waterways, limit consumption of fossil fuels, and rely more on low-impact renewable energy sources. 

So far, we discover that there is a naturally occurring extinction rate, human activity accelerates said rate, and the number of species on the planet is unknown. Given the political climate (pun intended), it seems convenient to blame anthropogenic climate change. However, the main driver is not climate change. According to a 2018 WWF report, "the main drivers of biodiversity decline continue to be the overexploitation of species, agriculture, and land conversion."

While there are some discouraging trends in terms of species extinction, there is also some reason for optimism on the theme of species extinction when looking to the future: 

• The Food and Agricultural Organization (FAO) shows that land use for agricultural purposes per capita is about half of what it was in 1961. This leaves room to use the land for other uses, such as forestation. Oxford also points out that we have already reached and passed peak agricultural land use.
• A study using NASA data shows that the Earth has gotten greener during the first 15 years of the 21st century (Chen et al., 2020). A greener earth will not only cool down global temperatures, but it will help with maintaining biodiversity and helping species to rebuild. 
• Since 2010, protected areas covering 21 million square kilometers (or the size of the Russian Federation) have been added to the global network of protected ares (Protected Planet).
• Dematerialization seems to be manifesting. As Co-Director of the MIT Initiative on the Digital Economy Andrew McAfee explained on a podcast, many developed nations are learning to reduce its usage of timber, metals, and fertilizer. This article from 2015 uses data to show how dematerialization takes place. Such dematerialization can take some pressure off of ecosystems.
• In his book Inheritors of the Earth, University of York conservation biologist Chris Thomas argues that humans have been enriching local diversity by "moving around and introducing species to areas where they were previously absent." 

We need to weigh the costs and benefits of keeping species alive, much like we do with any other policy. We also do not need to choose between the economy and the environment. As one optimistic paper in BioScience arguing about how we will regain conservationism this century, "the only sensible path for conservation is to continue its efforts to protect biodiversity while engaging in cities to build the foundations for a lasting recovery of nature (Sanderson et al, 2018)." Rather than give into despair, there is reason to be optimistic. A combination of technological development, urbanization, and economic advancement will likely result in the freeing up land for conservation and development of biodiversity, thereby evading most, if not all, the catastrophic predictions about species extinction.

Pfizer Director on COVID Vaccines & Transmission: Another Reason Why Vaccine Mandates & Passports Were Unnecessary

A European Parliament hearing from October 10, 2022 is making the news.  While it might seem to be normal parliamentary business, the testimony provided was quite revelatory. The testimony included representatives from Pfizer and Curevac to discuss manufacturing and distributing COVID-19 vaccines and therapeutics. The quote that was most notable was when European Parliamentary member Rob Roos of the Netherlands asked if the vaccines were tested to see if they can prevent COVID transmission. Pfizer Director Janine Small testified that the vaccines were not tested for prevention of COVID transmission (see Roos' tweet below).

🚨 BREAKING:

In COVID hearing, #Pfizer director admits: #vaccine was never tested on preventing transmission.

"Get vaccinated for others" was always a lie.

The only purpose of the #COVID passport: forcing people to get vaccinated.

The world needs to know. Share this video! ⤵️ pic.twitter.com/su1WqgB4dO

— Rob Roos MEP 🇳🇱 (@Rob_Roos) October 11, 2022

The fact-checkers at AP News found this to be misleading since "Pfizer never claimed to have studied the issue before the vaccine market's release." In a similar vein, Reuters' fact-checkers wrote about how preventing transmission was "not required, not promised." Let's forget for a moment that the Pfizer CEO Albert Bourla said on the Today Show in September 2020 that "their decision will not only affect their lives...but will affect the lives of others. If they don't vaccinate, they will become the weak link that will allow this virus to replicate."

While purporting to fight misinformation, the fact-checkers at AP News and Reuters hope you do not notice the slight-of-hand with their semantics or what the Pfizer CEO said on live television. The FDA did not require transmission to be tested. That much is true, but that is beside the point. The fact that the vaccines would stop COVID transmission was a repeated talking point from government officials:

• In May 2021, Biden said "if the unvaccinated get vaccinated, they will protect themselves and other vaccinated people around them" and said in a CNN town hall in July 2021 that "you're not going to get COVID if you have these vaccinations." 
• When pushing for his vaccine mandate in September 2021, Biden reiterated that getting people vaccinated is "about protecting yourself and those around you." 
• Dr. Anthony Fauci said in May 2021 that vaccinated people become "dead ends" for coronavirus. 
• April 2021: CDC Director Rochelle Walensky that "Our data from the CDC suggests that vaccinated people do not carry the virus" and that they are unlikely to spread it to others.
• French government official Jean-Michel Blanquer similarly stated that being vaccinated does not risk contaminating others. 
• In 2021, Austria had a lockdown on the unvaccinated to prevent them from transmitting the virus. 

I can list more examples, but I think you get the idea by now. Multiple countries mandated that people get vaccinated. There were plenty of jurisdictions that required COVID passports to go to restaurants or shopping, not to mention COVID passports to enter countries in 2021 and the beginning of 2022. The primary underlying rationale of COVID vaccine mandates and COVID vaccine passports was to protect others from getting infected with COVID. 

When I criticized Biden's failed attempt at a vaccine mandate in September 2021, I listed 10 reasons why it was faulty. One of those reasons was the following: if the vaccine is what protects the vaccinated (as opposed to making sure everyone is vaccinated), why force the unvaccinated to take it? 

Plus, it was anything but clear in 2021 that the vaccines prevented transmission. I went through the data in December 2021 to find that while vaccines helped with severe cases of COVID, they did little to nothing to prevent transmission. I wrote that piece while the Delta variant was the predominant strain. Since Omicron is even more transmissible than Delta, it stands to reason there are similar issues with COVID transmission. After all, the CDC found that in February 2022, 64 percent of adults and 75 of children had been infected by the Omicron variant of COVID.

Here is my main line of questioning for today:

If Pfizer didn't know, what inside information did Biden, Fauci, or any other government official have to justify their push for vaccine mandates? 

How could your vaccine mandate-loving neighbor who yelled at the unvaccinated because their choice to not get vaccinated "could kill grandma" possibly have known more about vaccines and transmission than the companies manufacturing and distributing the vaccines? 

To answer these questions non-rhetorically, they did not know. Government officials did not have adequate information, clinical data, or other inside information regarding vaccines' effect on transmission before thrusting vaccine mandates or vaccine passports onto the populace. Not only did they not know, there was evidence showing that the vaccines did not prevent transmission. 

Just so we are clear, this is not to say that COVID vaccines are useless. Quite the opposite! I have written on multiple occasions that the vaccines are effective because they prevent severe COVID, COVID-related hospitalizations, and COVID deaths (see here, here, and here). A September 2022 paper from the Lancet shows how the COVID vaccines saved anywhere between 14.4 to 19.8 millions within the first year of vaccination (Watson et al., 2022). To throw more nuance into the mix, the Danish government does not recommend that people under 50 get their booster shot. The main success of the COVID vaccines is individual protection of one's health, not societal protection.

The efficacy of vaccines based on certain metrics does not negate that the vaccines were not particularly helpful when it came to COVID transmission. It certainly does not excuse government officials using faulty rationale to pass problematic policy or various media outlets going along with it. 

What happened in the EU parliamentary meeting is another example of how governments around the world ignored the science to force onerous COVID regulations on the people, whether it was harmful lockdowns, counterproductive school closures, all-but-useless mask mandates, or ineffective travel bans. Neither the media nor various governments want us to pay attention to these finer points because they would rather deflect the harm the suffering they caused with putting fear-mongering over actual science. 

While Biden declared the pandemic is over, what we the people need to do now is make sure that the lockdown lovers, Covidians, and indeed everyone who was responsible for wreaking such havoc on our institutions and way of life do not get to write a revisionist, bastardized version of history to make them look vindicated. We need to hold a light to what was inflicted upon this generation so future generations do not suffer.