The Dish

The AP reports:

Up to 30 men on motorcycles, some in masks, swarmed outside Mousavi’s office on Tuesday. They blocked him as he tried to drive out of the garage and chanted slogans against him, two opposition Web sites said, citing witnesses. Mousavi got out of his car and shouted at them, ”You’re agents. Do whatever you’ve been ordered to do, kill me, beat me, threaten me!” before aides rushed him inside, the Gooya News Web site reported. The men left several hours later and Mousavi was able to leave.

When asked at a press conference if the judiciary will pursue Mousavi, [Iran’s top prosecutor, Gholam Hossein Mohseni Ejehi] said, ”We will not tolerate anyone who commits actions against security, and we will confront them,” according to the Fars news agency.

Basij also assaulted his wife yesterday.

Enduring America sounds the alarm:

Students in Tehran University were viciously attacked today by security forces and Basijis today as they tried to demonstrations.

There are two conflicting reasons for the tensions and clashes. The first scenario is that students walked out of classes to protest in front of the Technical Faculty of the University against the arrest of their classmates yesterday. With the expectation of another day of protests in light of student calls for a fresh round of dissent, security was already tight, with the university besieged by thousands of security forces. As the students tried to gather in front of the Faculty, security forces stormed the campus.

The second scenario is that security forces stormed the university first and started beating students as they sat in classes. So far, the first scenario seems to have more eye-witness support.

More here. The NYT reports:

Iran’s broadest and most violent protest in months spilled over into a second day on Tuesday, as bloody clashes broke out on university campuses between students chanting antigovernment slogans and the police and Basij militia members.

As the scale of Monday’s demonstrations became clearer, Tehran’s police chief announced that 204 people had been arrested in the capital, the semiofficial Mehr news agency reported. The clashes took place on campuses in cities across the country, as students and opposition members took advantage of National Student Day to vent their rage despite a lengthy and wide-ranging government effort to forestall them.

The violence continued Tuesday on the campus of Tehran University, where security forces were using tear gas and arresting students, according to reports and video clips relayed through Twitter and Internet postings. There were protests at large squares near the university as well, witnesses said. Iran’s official IRNA news agency reported that the clashes began after groups of pro-government students carrying pictures of Iran’s supreme leader, Ayatollah Ali Khamenei, clashed with protesters on campus.

The new violence came as Iran’s chief prosecutor, Gholam Hossein Mohseni-Ejehi, warned of even harsher measures if the protests do not cease.

(Hat tip: Robert Mackey)

Adam Ozimek counters Daniel Indiviglio and Felix Salmon over housing as an investment:

Overall, a housing investment is more like buying a small business than it is like a security investment. In fact, it is buying a small business; the business is being your own landlord. Being a landlord is more likely to be a profitable venture if you have reliable renters who you can trust. As a landlord, you’re the best renter you could ever want, which makes being your own landlord less risky than being someone elses landlord.  This is because being your own landlord solves the principal agent problem inherent in the rental relationship; the owner/renter interests are exactly aligned.

Beautiful/Decay:

This probably wasn’t easy to make but the concept is so simple that it leaves me feeling like like “why didn’t I think of that.” Video by Korb, music by Mario Basanov & Vidis Featuring Jazzu.

John Corvino debates the word:

[T]here’s a difference between identifying [homophobic] bigotry, on the one hand, and labeling any and all people who disagree with us as bigots, on the other. Such labeling tends to function as a conversation-stopper, cutting us off from the “moveable middle” and ultimately harming our progress.

Agreed. Prejudice is complicated. It can exist in the human psyche alongside genuine compassion. No one is defined by hate any more than anyone is defined by love – or at least, that's what my faith teaches me. David Link has a brilliant addition to John's arguments here. Money quote:

Many people who don’t support same-sex marriage are not bigots, and it does not help us to use the epithet promiscuously. John tries to tease out a more helpful definition of “bigot” than dictionaries provide, and moves the ball downfield a bit. But he sets himself a hard task.

That struck home for me when a rabbi (whose name I did not catch) testified against the New Jersey bill, and asked the legislators to think about the fate of an “innocent lonely child” who is adopted by a same-sex married couple. His testimony is at the 8:18 mark in Blue Jersey’s live blog.

The unadorned words do not capture the rabbi’s deep, fearful concern for this hypothetical child. I obviously can’t speak about what moved this man. But listening to him, it is tragically clear that there is no room at all in his world for the simple possibility that such a child might not be lonely in a loving home headed by a gay couple, or that the child could thrive and

have a wonderful life.

The irony is that by eliminating such a possibility from his imagination, he may be preventing some real child that tangible benefit. It is this moral editing – this internal censorship of good possibilities – that exempts some people from being called bigots.

I can’t really imagine how anyone could do that – suppress from their consciousness a fellow human being’s decency or happiness or value. But it is something necessary (if not sufficient) for prejudice to prevail. I don’t think this rabbi wishes us harm; but it is just not within him to see us as blessed. His cramped view of the world takes something essential away from us.

TNC returns to the topic:

One problem with the debate around reparations, when it was hot, was that it allowed us to go where we are all most comfortable–our respective corners–and yell at each other. The focus on money, or on some form of direct payback, obscured a potentially deeper discussion in which white folks acknowledge some of the distressing roots of this country, and black folks acknowledge that some debts can not be repaid. Instead we got this cheap, cartoonish debate about cash. It's like everything else.

Max Blumenthal profiles Rick Santorum:

Santorum complemented his activism with an almost unremitting stream of extreme statements. In an interview with the AP, for example, he compared homosexuality to “man-on-dog” sex, prompting the female reporter to plead, “I’m freaking out here!” In 2005, as he geared up for his reelection campaign, Santorum blamed the Catholic church’s sexual-abuse scandal on the “academic, political, and cultural liberalism” of Boston. Comments like these, along with the denunciations of feminism and single motherhood that riddle the pages of his book-length culture-war manifesto, It Takes a Family, may call into question Santorum’s viability in a general election. Yet in Republican primaries dominated by the Christian right and tea party activists, his strident streak could prove beneficial to him.

Dan Savage may have to update his website.

Not as interesting as the Green Room, but you might enjoy the razzing I get at the end of the segment.

Greg Mankiw offers this testimony from Brookings' Ted Gayer on the superiority of a carbon tax or fee over the cap and trade mechanism. I find it persuasive and reproduce it in full below. The full PDF with footnotes can be found here:

My testimony will make the following points:

1.    Either a carbon tax or a cap-and-trade program will result in substantially lower economic costs than command-and-control regulations that mandate technologies, fuels, or energy efficiency standards.

2.    Given the uncertainty of the future costs of climate policy, a carbon tax is more economically efficient than cap-and-trade.

3.    Carbon allowances in a cap-and-trade program would be susceptible to price volatility. Price volatility causes economic disruptions and complicates investment decisions. It also could lead to political pressure on Congress to repeal or substantially loosen the cap.

4.    A carbon tax, in which the revenues are used to offset economically harmful taxes or to pay down our deficit, would substantially lower the cost of climate policy compared to a cap-and-trade program that gives away allowances for free.

5.    The currently proposed climate bills rely heavily on offsets to reduce the overall costs of cap-and-trade. Given the substantial potential value of offsets, there is a very real concern that offset integrity will not be maintained. This would result in a weakening of the cap, undermining its environmental benefits.

Please allow me to elaborate on these points.

1. Carbon tax and cap-and-trade are preferable to command-and-control.

A carbon tax is similar to cap-and-trade in that they both rely on sending market signals to raise the price of carbon, rather than relying on more inflexible – and thus more costly – technology and fuel efficiency mandates to achieve carbon reductions.1    For existing air pollution regulations, command-and-control mandates result in up to 22 times the cost relative to a market-based approach.2    Command-and-control regulations, such as technology standards, might be preferable to market-based regulations when measuring emissions is costly or infeasible. However, this is not the case with carbon emissions.

I believe the over-reliance on inflexible command-and-control regulations in the existing Clean Air Act and in the House energy bill [HR 2454] will result in much higher economic costs than would reliance strictly on a carbon tax or cap-and-trade. Indeed, were cap-and-trade or a carbon tax to be enacted, the additional command-and-control regulations – such as the renewable fuel mandate, the renewable electricity mandate, and the various energy efficiency requirements – would likely just add to the overall cost of the program without accruing any climate benefits.

2. Given cost uncertainty, a carbon tax is more economically efficient than cap-and-trade.

When there is uncertainty about the costs of reducing a pollutant, a carbon tax and cap- and-trade yield different results with respect to economic efficiency.3    With respect to climate change, the benefits of carbon reduction are related to the stock of the pollutant, whereas the costs are related to the flow of the pollutant. Under these circumstances, a carbon tax yields more economically efficient results than cap-and-trade.

3. Carbon allowances in a cap-and-trade program could be susceptible to price volatility.

The main distinction between a carbon tax and cap-and-trade is that the former gives certainty about the price of carbon, whereas the latter gives certainty about the quantity of carbon emitted. Market participants prefer stability of prices, in order to better plan capital decisions, including long-term investments in low-carbon technologies. The price volatility of a cap-and-trade program would likely also increase pressure on policymakers to eliminate or substantially weaken the cap, thus creating more uncertainty about future prices.

Price volatility, as well as my previous concern about cost uncertainty, could be addressed relatively easily within a cap-and-trade program. For example, a cap-and-trade program that included a safety valve price – in which the government offers to sell additional allowances above the cap at a pre-established price – would eliminate the risk of high-end price volatility. A Congressional Budget Office study on the policy options for reducing carbon emissions also noted that a safety valve would limit the cost of a cap- and-trade program.    And a recent paper by my colleagues at Brookings suggested a price collar, which would establish both a price floor and a price ceiling for cap-and-trade allowances, thus addressing the problem of price volatility.    Unfortunately, the House energy bill does not include any such provisions. A carbon tax could offer a cleaner approach to tackling the issue of price volatility.

4. A carbon tax that uses the revenue to offset harmful taxes would substantially reduce costs.

A carbon tax generates public revenue. A cap-and-trade program generates public revenue only when the allowances are auctioned off by the government. In practice, this rarely happens, and the allowances are instead given away for free to regulated entities. Failing to capture and direct this public revenue to reducing economically harmful taxes and deficits would substantially increase the cost of any policy.

Any successful climate policy would increase the prices of such things as electricity and transportation. These price increases amount to a reduction in real incomes, which in turn magnifies the economic inefficiencies in our overall tax system.   These inefficiencies – known as the tax-interaction effect – can substantially increase the overall cost of any environmental regulation, even in some cases leading to negative net benefits.
The way to address this problem is to use public revenues from a carbon tax to offset inefficient taxes or deficits. A carbon tax set at a similar stringency to the House energy bill’s cap-and-trade program would likely result in $60 to $100 billion per year9 that can be used to reduce other economically harmful taxes. A revenue-neutral carbon tax would achieve former Vice President Al Gore’s aim to “tax what we burn, not what we earn.”

5. Carbon offsets could undermine a cap-and-trade program.

In a cap-and-trade system, an offset is a reduction in carbon emissions from sources that are not subject to the mandatory cap. The advantage of offsets is that they can provide many sources of low-cost reductions, thus significantly reducing the overall cost of achieving an emissions reduction goal. This can be seen in the currently proposed climate bills, which rely heavily on offsets to reduce overall costs of cap-and-trade. According to the EPA’s analysis of the House energy bill, international offsets would average over 1 billion metric tons of carbon dioxide equivalent per year.    Without international offsets, the allowance price would increase 89 percent.

But offsets also pose a substantial problem in that they are difficult to measure. The enforcement of a carbon tax or a cap-and-trade program relies on measuring carbon emissions, typically by measuring the carbon content of fuel inputs. Offsets, on the other hand, rely on measuring emission reductions, rather than emissions. This introduces a host of problems, because it is difficult to know what would have happened to emissions absent a given offset project. For example, planting a tree will only lead to a net reduction in carbon emissions if 1) the tree would not have been planted without the offset provision, and 2) the tree will not be subsequently destroyed after the offset purchase takes place.

The difficulty of measuring emission reductions could lead to honest mismeasurements, in which reported reductions are not real. And given the substantial value of offsets in the proposed cap-and-trade programs, it could lead to deliberate mismeasurements of carbon reductions. A similar problem that also arises with cap-and-trade is the treatment of early reduction credits. These are credits given to count against the cap, based on reductions that have occurred in years past. These early reductions are even more difficult to measure than any future offsets, so are more likely to undermine the integrity of the cap-and-trade program.
Unless the integrity of carbon offsets and early reduction credits can be assured at relatively low cost, the environmental benefits of a cap-and-trade program could be substantially undermined, resulting in a program that transfers wealth without achieving climate benefits. Given the financial crisis of the past few years, we should be cautious about creating an active market in a poorly-measured financial instrument.

Conclusion

I acknowledge that my arguments in favor of a carbon tax over cap-and-trade are made easier in that I am comparing my ideal hypothetical carbon tax to the actual cap-and- trade programs either passed by the House or proposed in the Senate. Indeed, a cap-and- trade program that included a safety valve and that auctioned allowances would achieve many of the economic advantages of a carbon tax.

The most frequent criticism of a carbon tax is that it would be politically unpopular. But to quote Milton Friedman, I think my role is to “prescribe what should be done in light of what can be done, politics aside, and not to predict what is ‘politically feasible’ and then to recommend it.” You, of course, have the more difficult task of determining what is politically feasible. But given the magnitudes of the costs and benefits associated with any climate policy, I recommend to you a careful consideration of the merits of a carbon tax.