Archive for February, 2009
Sometimes, the Tax Code’s Complexity Helps Preserve Freedom
Click here for other ironies of Tom Daschle’s ill-fated nomination to head the Department of Health & Human Services.
“Economists across the Spectrum” Continue to Flee Stimulus Bill
People like Robert Reich, who try to back up the claims of President Obama and Vice President Biden that “economic advisers across the political spectrum support Obama’s plan,” have managed to come up with two names of economists who support the stimulus plan and would not be regarded as left of center: Martin Feldstein of Harvard, a former top economic adviser to President Reagan, and Mark Zandi of Moody’s, who was an adviser to John McCain last fall. And now the Washington Post has blown both of those names out of the water. Leaving — by my count — exactly zero libertarian or conservative economists on that much-touted spectrum. As the Post notes this morning:
Democrats lost Feldstein on Thursday when the Harvard professor published a Washington Post op-ed declaring the House bill “an $800 billion mistake” laden with ineffective provisions.
As for Zandi,
The 49-year-old economist is a Democratic dream, a former adviser to GOP presidential candidate John McCain who advocates spending over tax cuts as the best way to deliver a quick jolt.
And Democrats have touted him a lot:
In floor speeches and news conferences, Democratic lawmakers confer on Zandi an authority once bestowed on Alan Greenspan, the former Federal Reserve chairman.
“I’m just saying what Mark Zandi from Moody’s, an adviser to John McCain, is saying: You have to have a package of this robustness if you’re going to make a difference,” House Speaker Nancy Pelosi (D-Calif.) said at a recent news conference. …
“I think [he] is a Republican. I am pretty sure he is,” Senate Majority Leader Harry M. Reid (D-Nev.) said of Zandi after a recent meeting. Sen. Charles E. Schumer (D-N.Y.) described Zandi on Fox News as a “conservative Republican.” Defending the bill’s sizable spending during a recent CNBC interview, Rep. Chris Van Hollen (D-Md.) responded: “I think if you listen to economists like Mark Zandi, who was the economic adviser to John McCain in the presidential election, he has said this is the right mix.”
But wait! Post reporter Shailagh Murray actually asked Zandi about his politics.
“I’m a registered Democrat,” he acknowledged.
He signed up with McCain when Douglas Holtz-Eakin, the candidate’s chief economic aide and a longtime friend, asked him to join the campaign’s diverse economic advisory team. “My policy is I will help any policymaker who asks, whether they be a Republican or a Democrat,” Zandi said.
So . . . the count of Republican or conservative or libertarian economists who support Obama’s biggest-spending-bill-in-world-history stands at . . . zero. And hundreds of economists have declared in the New York Times, the Washington Post, the Chicago Tribune, the Los Angeles Times, and other papers that they don’t support the plan. It’s time for politicians, pundits, and journalists to stop making this claim.
Tom Daschle Drops Out
President Obama needs to find someone new to further socialize America’s health care system. Tom Daschle has withdrawn his name. Apparently, being Secretary of the Department of Health and Human Services is not all that enticing, especially if you have to start (gasp!) complying with the internal revenue code. Unfortunately, rather than learn a good lesson about the need to junk America’s complicated tax system, the politicians are probably going to use this fiasco as an excuse to give the IRS even more power. But there is a lighter side to Daschle-Gate. This 1986 campaign commercial is rather ironic considering that Daschle got caught because he neglected to report his use of a luxury car and chauffer:
Who’s Blogging about Cato
Here’s a just a few bloggers who are incorporating Cato research and commentary into their posts:
- On the other side of the Atlantic, the Adam Smith Institute‘s Philip Salter is blogging about Richard Rahn’s recent article in The Washington Times on the optimum size of government.
- Media critic Mark Finkelstein comments on the ABC’s coverage of free-market economists who are opposed to the stimulus plan.
- Pajamas Media bloggers Dan Blatt and Glenn Reynolds link to David Boaz’s Cato@Liberty post, “Only the Little People Pay Taxes.”
- Tipped off by U.S. News and World Report‘s James Pethokoukis, editors of this blog devoted to the 2012 Republican nomination cite Michael Tanner’s analysis of the types of candidates the GOP will put up in the next election.
- Writing for The Liberty Papers, Stephen Littau posts this video of eminent domain victim Susette Kelo, who spoke at the Cato Institute last week.
- Henry Stern from Insureblog, a site devoted to insurance issues, cites Michael F. Cannon’s NRO article, “Does SCHIP Work?”
If you’re blogging about Cato, let us know by emailing cmoody@cato.org or send us a message on Twitter or Facebook.
Obama’s Next Step on Transparency: A Shortcut
I’ve been following President Obama’s early moves on government transparency on the Tech Liberation Front blog and here on Cato@Liberty.
Last week, Obama’s first broken campaign promise was the pledge to post legislation online for five days before signing it.
Well, the White House is working to address that, but it appears to be doing so with a half-measure that comes up short. On Sunday, the White House blog announced that the SCHIP legislation pending in the Senate was up for public comment. And it is, of course, but it hasn’t passed the Senate yet.
It was implicit in the promise to post bills online for five days prior to signing that the bill posted would be the one passed by the House and Senate and presented to the President.
If the White House were to implement the promised practice of leaving bills sitting out there, unsigned, after they pass Congress, that would have significant effects. The practice would threaten to reveal excesses in parochial amendments and earmarks which could bring down otherwise good bills. President Obama’s promised five-day cooling off period would force the House and Senate to act with more circumspection.
Taking comments on a bill as it makes its way through the House and Senate does not have the same salutary effect. If the White House is trying to start the five-day clock on the SCHIP bill with the posting of a comment page on Sunday, that is not consistent with President Obama’s promise.
Sarah and the Giant Stimulus
My blog yesterday on potential 2012 GOP candidates and the stimulus provoked a deluge of e-mails from fans of Sarah Palin objecting to my characterization of her support for the bill. And Palin’s office, responding to news reports (like this one from Fox News and the Associated Press that I relied on), put out a statement attempting to clarify her position. It wasn’t particularly successful.
Palin does urge Congress to “consider” whether the stimulus bill is too big and burdens future generations with debt, but unlike some other governors (Sanford, Barbour, Jindal, for example), she does not call for the bill’s defeat or urge her congressional delegation to vote against it. Instead, she goes on to raise her big concern with the bill – it doesn’t give enough money to Alaska:
“Governor Palin discussed troubling elements in the stimulus package including provisions that punish Alaska for forward-funding education, the mass transit funding formula that will limit Alaska opportunities but will pour money into other states, and the “shovel-ready” criteria for projects that northern climates might not be able to accommodate consistently due to the shortened construction season.”
Earlier Governor Palin sent a letter to her congressional delegation in which she similarly complained, not about the spending in the stimulus bill per se, but about the formulas for distributing the funds, which she believes short changes her state (as if Alaska were not already a wholly-owned subsidiary of the federal government.) She also wants the bill to include five specific projects (we used to call those “earmarks.”)
So, I’ll stand (somewhat) corrected. Governor Palin didn’t lobby for the bill. She just lobbied for her share of the pork.
Constitutional Studies Out West
As the Supreme Court takes a winter break and the Obama team gets settled in at the DOJ, I’ll be on the road giving speeches and debating several of the most pertinent legal topics facing the incoming administration. Here’s the schedule for my upcoming trip to California and Hawaii, which starts tomorrow. All events are open to the public (though the non-law school events typically charge admission):
- University of San Diego Law School (Warren Hall Rm. 133), February 4 at 12pm — “Judicial Nominations: What’s Gone Wrong and Can It Be Fixed?”
- University of San Francisco Law School (Kendrick Hall Rm. 101), February 5 at 12:30pm – ”What Can We Expect from the Obama Administration on Judicial Appointments?”
- North Coast Federalist Society Lawyers Chapter (904 MacDonald Ave., Santa Rosa), February 5 at 7pm – “Libel Tourism: The Next Front in the War on Terror”
- Princeton Club of N. California (Gordon & Rees, Embarcadero Ctr., SF), February 6 at 12pm — “How I Spent My Summer Vacation: Rule of Law in Iraq”
- Stanford University Law School (Rm. 95), February 9 at 12:45pm — “What Role Should Foreign Law Play in U.S. Constitutional Interpretation?”
- SF Federalist Society Lawyers Chapter (Harrington’s, 245 Front St.), February 9 at 5:45 pm– ”What Role Should Foreign Law Play in U.S. Constitutional Interpretation?”
- Santa Clara University Law School (Bannan Hall), February 10 at 11:45am — “What Can We Expect from the Obama Administration on Judicial Appointments?”
- University of Hawaii Law School (Rm. 1 or 2), February 12, 2009 at 12:45pm – “Race-Based Government in Paradise? Hawaii v. OHA“
If you come to one of these events because you learned of it from this blog post, please come up and introduce yourself.
Debating Democratic Tax Cheats
Yesterday, I participated in an online debate for the New York Times about Senator Daschle and other high-ranking Democrats who seem to like higher taxes for everyone except themselves. One of the participants asserted that everything would be okay if Daschle (and Treasury Secretary Geithner) voluntarily gave the government extra money. Another participant used the forum as an excuse to argue that the rest of us should give the government more money. Another participant actually wrote that “Tom Daschle is an exemplary public servant” and that the “country is lucky to get him back in this time of great need.” (I’m not making this up.) One of my favorite people, by contrast, indicts the internal revenue code and the corrupt culture in Washington:
The Tom Daschle imbroglio is…an indictment of a convoluted tax code that simultaneously hinders compliance by honest people and enables cheating by dishonest people. In past years, Money magazine asked professional tax preparers to estimate the tax liability for a hypothetical family. Almost without fail, every single answer the magazine received was different and every single answer was wrong. If people trying to come up with the right answers have this much trouble, imagine the opportunities for mischief by those who want to scam the system — especially now that the tax code is even more complex? …Mr. Daschle’s tax dodging…reveals how the political culture in Washington is fundamentally corrupt. As a senator, he constantly voted to expand the size and scope of government, and he expected the rest of us to pay the bills, stating in 1998 that, “the I.R.S. should enforce our laws to the letter.” Yet like Treasury Secretary Geithner and Charles Rangel, chairman of the House Ways and Means Committee, Mr. Daschle viewed compliance as optional. Unlike ordinary Americans, Mr. Daschle and other members of the political class will not have to worry about being harassed by the I.R.S. Washington insiders have a get-out-of-jail-free card that enables them to feign embarrassment, pay the back taxes and interest, but avoid any penalties or legal consequences. Best of all, they also can generate campaign contributions while in office and become rich out of office by making the tax code even more onerous for the rest of us. Nice work if you can get it.
The Stimulus Lobbying Frenzy
At RealClearPolitics I wrote about the vast army of lobbyists jockeying for money from the TARP bailout and the stimulus bill:
The $700 billion Troubled Asset Relief Program (TARP), better known as the Wall Street bailout, was cooked up mostly in secret by the Treasury Department and the Federal Reserve Board. But the bill was no sooner proposed than lobbyists started flooding Capitol Hill and the Treasury to get a piece of it.
Every company and industry wanted to be sure that it would be eligible for some of the money, and members of Congress worked to slip their constituents and campaign donors into the bill’s 451 pages. By the time it passed, it included special provisions for Puerto Rican rum producers, auto race tracks, and corporations operating in American Samoa (such as Starkist, which is headquartered in House Speaker Nancy Pelosi’s district). It required that insurance companies pay for mental health benefits and granted tax benefits for victims of the 1989 Exxon Valdez oil spill and makers of children’s wooden arrows….
Next up is the nearly-trillion-dollar stimulus bill. Don’t expect anything different. Already senators are pushing to get their pet projects and home-state interests into the measure. “It’s very intense right now,” one Washington lobbyist told U.S. News. “I’m working late every day, until 9 o’clock, 10 o’clock. Every imaginable client has been calling me with ways of how their business, or their projects, should fit into the economic stimulus package. It’s wild. No idea is too far-fetched for people.”
No sooner was the article published than more examples fill the media: “A Republican [in Ohio] called it a once-in-a-lifetime opportunity.” “Cities, towns ready to vie for stimulus funds.” “Road Builders Compete for Slice of Stimulus.” “West Michigan’s stimulus wish list.” “A State with a Wish List for Stimulus Spending.” “Steel industry lobbyists seem to have persuaded the House to insert a “Buy American” provision in the stimulus bill it passed last week.” “JetBlue Goes to Washington to Discuss Economic Stimulus Plan.”
When you lay out a picnic, you get ants. And this is the biggest picnic in the history of pork-filled picnicking.
More on the Calvo Raid
Yesterday, the Washington Post Magazine ran a terrific cover story about the violent drug raid on the home of Cheye Calvo. Here’s an excerpt:
Cheye and Trinity flipped channels waiting for the 5 o’clock news, certain that — finally — they would be officially cleared. It was Wednesday, Aug. 7, more than a week after the raid. Then-Prince George’s Police Chief Melvin C. High and Sheriff Michael Jackson held a joint news conference to announce the arrests of a FedEx deliveryman and a second man alleged to be involved in a scheme to smuggle marijuana by shipping packages addressed to unsuspecting recipients, including the one to Trinity. Police refused to release their names.
Yet neither High nor Jackson apologized to Cheye, Trinity and Georgia or declared their absolute innocence.
The mayor of Berwyn Heights and his family “most likely, they were innocent victims” of the drug traffickers’ scheme, High said. “But we don’t want to draw that definite conclusion at the moment.”
High and Jackson defended the raid on the mayor of Berwyn Heights as reasonable and restrained, given the information they had at the time. “In some quarters, this has been viewed as a flawed police operation and an attack on the mayor, which it is not,” High said. “This was about an address; this was about a name on a package . . . and, in fact, our people did not know that this was the home of the mayor and his family until after the fact.”
The chief and sheriff admitted to what Cheye had already deduced: They did not specifically seek a no-knock warrant before breaking down the mayor’s door. Jackson said his deputies were justified in entering the house so forcefully because Georgia screamed when she saw them outside the house, and her cries could have alerted any armed occupants of the home to attack police or destroy evidence.
Deputies were justified in killing Payton and Chase because the dogs had “engaged” them, Jackson said, although he acknowledged under questioning that neither dog had bitten anyone.
Watching accounts of the news conference on television, Cheye grew livid. Not only had the brass refused to apologize or clear them, they were now blaming poor Georgia’s terrified scream for the botched raid. They were saying dogs barking at masked men justified slaughter.
The article notes the Cato study, Overkill by Radley Balko and the raidmap. Read the whole thing.
Mayor Calvo recounted his ordeal at a Cato forum last summer.
US News and World Report Gets it Wrong
US News and World Report contributing editor Bonnie Erbe writes that “school vouchers… have already drained federal tax coffers of hundreds of millions of dollars.” With all due respect, this is not true.
There is only one federal school voucher program, in Washington, DC. That program is serving fewer than 2,000 children with an average voucher amount below $6,000, for an annual price tag under $12 million. It is in its fifth year of operation. Perhaps Ms. Erbe can explain to her readers how 5 * $12 million can be made to exceed $100 million?
Of course, even if the value of the vouchers to date did exceed $100 million, that wouldn’t mean it had “drained federal coffers” as Erbe claims. That’s because, as I wrote in the Washington Post and on this website, DC’s public schools spent $24,600 per pupil in 2007-08 — more than four times the average voucher cost. Much of the DC school system’s budget comes from the federal government, and the DC voucher program is saving taxpayers a great deal of money for every child it serves in place of the exorbitant district schools.
Ms. Erbe’s misrepresentation of the cost of federal vouchers calls into question the reliability of the US News and World Report. A correction is in order.
Washington’s View of the World
Remember that Saul Steinberg cover for the New Yorker that showed Manhattan’s view of America — just a vague grouping of place names between the Hudson River and the Pacific Ocean?
On Sunday we got a glimpse of how the Washington Post views the sprawling diversity of America. In an article on Cobb Island, a waterfront community about 90 minutes from Washington, the Post commented:
Cobb Island has always attracted a variety of people, from government workers to politicians.
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