Jasper wants to know:

I want one prominent liberal blogger to take on that Bjorn Lomborg fellow. Nobody seems to want to, which makes me wonder if he’s on to something. His take on things is not that humans aren’t causing the world to heat up — he acknowledges they are — his take on things is that carbon taxes don’t pass cost/benefit analysis — and his points look plausible to this particular non-expert.

Lomborg’s arguments have never seemed very serious to me at all. But if you want to see his arguments tackled in detail, there’s a three-part series (one, two, three) at Climate Progress (plus plenty of bonus coverage) if you’re interested. Here’s a very thorough inquiry from Grist. Chris Mooney takes a particular look at Lomborg’s assertions about hurricanes.

One thing I would add at a high level of abstraction is this. A well-designed carbon pricing scheme will not only reduce carbon emissions, it will also generate revenue. That revenue can’t be spent on public goods or it can be used to reduce other taxes. If done intelligently, that could easily be a net economic benefit which would render the whole cost-benefit issue moot. It happens to be the case that we’ve traditionally taxed people’s labor and traditionally not taxed their use of dirty energy but there’s no particular economic logic to that.

Hilzoy writes about California paying the high price for the anti-tax Proposition 13. The price comes in two forms — one is inadequate revenue and the consequences that follow from that, and the other is in distorted policy as when revenue does need to be raised it isn’t raised in the most straightforward and efficient manner:

The result, of course, is that California has been deferring maintenance for a very long time. Now their judges will be working from home, their schools will fall further into decay, and their bridges will continue to crumble. With any luck, Obama’s stimulus plan will help out with the worst of it; my only regret about that is that it will postpone the day when Californians have to confront the idiotic tax policies they put in place.

In fairness to California, however, everyone knows that the California “tax revolt” that led to Proposition 13 went national in at least a metaphorical sense spread nationwide in the 1980s. In practice, it’s been exceedingly difficult to increase revenue at any level of government anywhere. At the same time, the costs of delivering a large set of labor-intensive public services — cops on the beat, preschool teachers, taking care of the elderly, etc. — have gone up while the existing infrastructure has aged and the population has grown. But without the possibility of new revenue, it’s impossible to meet those needs. And an incredibly large proportion of the efforts that have been made in recent decades have had to be packaged inefficiently as “tax credits” rather than properly structured programs.

Thanks to the global recession, concern about the deficit is temporarily out of the window and nobody wants to raise taxes. But if we’re fortunate enough to pull out of this in a reasonable amount of time it’s still the case that getting the country on a long-run path to broadly shared prosperity is going to require the ability to raise revenue.

The Israeli government, seemingly dissatisfied with the results of their earlier effort to just make life as miserable as possible for residents of the Gaza strip went and killed a couple of hundred people in retaliatory airstrikes. The strikes were in response to Hamas’ habit of launching indiscriminant rocket fire from Gaza land, though how exactly these strikes are supposed to stop the rockets is mysterious to me. Less mysterious is the idea that the Kadima-Labour coalition wants to “look tough” and beat off the political challenge from Bibi Netanyahu and the Likud.

That, in turn, is a reminder that I just don’t think the parties to the conflict are capable of reaching a settlement without strong external pressure. The internal political logic of both sides defaulting to hawkish extremes is just too strong. On the Israeli side, “strong external pressure” could, in principle, come from the United States were we to have an administration that recognized the necessity of playing such a role.

Partisan wants to know: “Any idea who the fifth cylon is?”

The sad truth is that I’m still several episodes away from being fully caught up with my Battlestar watching. So let me throw this open to the crowd — speculate away on the last cyclon’s identity.

Donny Shaw at OpenCongress has a blog post of insights gleaned from CQ‘s analysis of voting records in the 110th congress. As everyone knows, bloggers are obsessed with Joe Lieberman, so:

Joe Lieberman (I-CT) votes with Bush as often as the least loyal Senate Democrat, Mary Landrieu (D-LA). But he votes with Democrats more often than at least six Democratic Senators.

Evan Bayh, meanwhile, has the lowest party unity score of any Democrat. I think that in years past, people would be inclined to give Bayh a pass on just about anything on the theory that Indiana seemed like such a hopelessly red state (see also Ben Nelson) but with Obama carrying the state back in November I can only assume the White House will be taking the view that strong support for the president’s agenda is consistent with electoral victory in Indiana.

Tyler Cowen says maybe the “Committee to Save the World” deserves a share of the blame for our current predicament:

Because Long-Term Capital owed large sums to banks and other financial institutions, the Federal Reserve Bank of New York organized a consortium of companies to buy it out and cover the debts. Alan Greenspan, then the Fed chairman, eased monetary policy to restart capital markets, which were starting to freeze up. Long-Term Capital’s shareholders were wiped out, but none of the creditors took losses.

At the time, it may have seemed that regulators did the right thing. The bailout did not require upfront money from the government, and the world avoided an even bigger financial crisis. Today, however, that ad hoc intervention by the government no longer looks so wise. With the Long-Term Capital bailout as a precedent, creditors came to believe that their loans to unsound financial institutions would be made good by the Fed — as long as the collapse of those institutions would threaten the global credit system. Bolstered by this sense of security, bad loans mushroomed. [...]

The Long-Term Capital episode looks small when viewed against all of that. But it was important precisely because the fund was not a major firm. At the time of its near demise, it was not even a major money center bank, but a hedge fund with about 200 employees. Such funds hadn’t previously been brought under regulatory protection this way. After the episode, financial markets knew that even relatively obscure institutions — through government intervention — might be able to pay back bad loans.

I might put this differently. When LTCM was on the verge of collapse, it seemed to regulators that allowing it to collapse would have unacceptable consequences for the world economy. Therefore, they had to leap into action to prevent it from defaulting on its debts. At the time I think everyone was clear on the idea that if institutions such as LTCM were “too big to fail” that they had to be brought into a regulatory umbrella. But as soon as it was clear that disaster had been averted, a lot of people became complacent about operationalizing this determination to expand the scope of regulation and some of the key participants — especially Alan Greenspan — in the bailout only redoubled their opposition to regulation.

But if you are going to take a libertarian line on financial regulation then the only reasonable option is to follow Cowen and take an anti-intervention line on bailouts. The combination of lax oversight and implicit federal guarantees has been disastrous.