Archive for February, 2009
Keeping Michelle’s Promise
“Barack Obama will require you to work. He is going to demand that. . . . you push yourselves to be better. Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.”
-Michelle Obama, February 3rd, 2008.
“[D]ropping out of high school is no longer an option. It’s not just quitting on yourself, it’s quitting on your country – and this country needs and values the talents of every American.”
-President Barack Obama, February 24th, 2009.
Live at Cato: ‘Obama and Presidential Power: Change or Continuity?’
Cato Vice President Gene Healy is moderating a discussion, “Obama and Presidential Power: Change or Continuity?” which you can watch live online at 12:00 PM EST.
Featuring Louis Fisher from the Law Library of Congress and Jeffrey Rosen of The George Washington University School of Law, the panel will discuss the rise of presidential power, and whether Obama will oversee a more modest presidency that recognizes constitutional limitations or end up expanding the powers of the presidential office.
In case you miss it, a video of the discussion will be available online.
Is Libertarianism a Sign of Mental Illness?
I don’t know whether this belongs in the comic-relief category or the future-threats category, but the Harvard Law School is having a conference to analyze the “free market mindset.” The basic premise of the conference seems to be that people who believe in limited government are psychologically troubled.
The conference schedule features presentations such as “How Thinking Like an Economist Undermines Community” and “Addicted to Incentives: How the Ideology of Self Interest Can Be Self-Fulfilling.” The most absurd presentation, though, may be the one entitled, “Colossal Failure: The Output Bias of Market Economies.” According to the description, the author argues that the market “delivers excessive levels of consumption.” Damn those entrepreneurs for creating so much wealth!
In the good old days of Soviet dictatorship, the regime classified dissidents as being mentally ill (after all, only a nutcase would fail to see the glories of communism).
Now that leftists at Harvard want to portray laissez-faire philosophy as being somewhat akin to a mental disorder, maybe the next step will be re-education camps for Cato staff? Maybe the next “stimulus” bill could include a few earmarks for such facilities? I’m keeping my fingers crossed that I get sent some place warm.
The Truth about Medical Bankruptcies
During his speech to Congress last night, President Obama declared that health care costs “causes a bankruptcy in America every thirty seconds.” His numbers are just a little bit off.
If what President Obama said were true, there would be approximately 1.05 million health care related bankruptcies in this country every year. However, in 2007 (the last full year for which there is data available, there were a total of only 815,000 non-business bankruptcies nationwide. Moreover, according to a study by Dr. Ning Zhu at UC-Davis, only 5 percent of bankruptcies are caused by medical bills. That suggests that in 2007 there were about 41,000 health care related bankruptcies. Too many, to be sure, but a far cry for 1.05 million.
Haven’t we learned from those weapons of mass destruction in Iraq that facts matter when a president says we absolutely have to do something now?
President’s Auto Gaffe No Laughing Matter
In his address last night, president Obama implied that an American invented the automobile (“The nation that invented the automobile cannot turn away from it”). It doesn’t matter that the president was unaware this is false. Politicians can’t be expected to know everything. What matters is that neither he nor anyone in his inner circle apparently thought it was important to fact check his first major speech to the nation. What other parts of his speech and policy platform are based on mistaken assumptions, we might well wonder?
Alas, some very important ones. In his campaign fact sheet on “21st century threats”, then-candidate Obama declared that
When Sputnik was launched in 1957, President Eisenhower used the event as a call to arms for Americans to help secure our country and to increase the number of students studying math and science via the National Defense Education Act.
“That’s the kind of leadership we must show today,” he later told a crowd in Dayton, OH.
The trouble is, the National Defense Education Act was an expensive failure. The average mathematics performance of 11th graders fell in the eight years following passage of the law, according to “national norm” studies conducted by the College Board. They still hadn’t returned to pre-NDEA levels a decade later.
In last night’s speech, the president called for increased federal “investment” in public schools, on the apparent assumption that this will improve educational outcomes and with them our economy. History does not support this rosy view.
To have any hope of achieving the lofty goals he has set out for himself, our 44th president would do well to get his future proposals — and speeches — thoroughly fact-checked. While this may starve late-night comics of material, it will save both the president and the American people a lot of heartburn.
Crédit Mobilier as a Model for High-Speed Rail
“History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas,” President Obama told Congress on February 24. “In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry.”
Obama, who wants to make the construction of a national high-speed rail network his “signature issue,” no doubt sees this as a model. It was a poor choice.
Aside from the simple factual issue that most of the first transcontinental railroad was built after, not during, the war, most of Obama’s audience would have forgotten that its construction caused for one of the first and biggest financial swindles of the nineteenth century. That scandal was the result of a simple fact: such a railroad made no economic sense in the late 1860s.
Live Blogging Obama’s Speech
Click below for live responses from Cato scholars to President Obama’s February 24th address to Congress.
A National Talk-Show Host with Nuclear Weapons
Over at the DC Examiner, I have a piece tied to President Obama’s address before Congress tonight. It’s called “The President Talks Too Much.” An excerpt:
In recent weeks, the president has been anywhere and everywhere, with a campaign-style blitz of media appearances and town hall meetings. But, hard as it is to imagine in this era of the omnipresent president, there was a time when presidents weren’t seen much and were heard even less. There might be a lesson there for Obama.
Our founding fathers didn’t want a president who’d perpetually pound the bully pulpit. They viewed presidential speechifying as a sign of demagoguery, and thought Congress should take the lead on most matters of national policy. They expected the nation’s chief executive to pipe down, mind his constitutional business, and keep his hands to himself.
The “permanent campaign” that dominates modern presidential politics would have appalled our forefathers. Accepting the 1844 Democratic nomination, James K. Polk described the custom of the time: “the office of president of the United States should neither be sought nor declined.”
When 19th-century candidates spoke publicly, they sometimes felt compelled to apologize, as 1872 Democratic contender Horace Greeley did, for breaking “the unwritten law of our country that a candidate for President may not make speeches.”
The modern ritual of the State of the Union–with members of Congress rising to clap for every outsized promise–has grown weirdly anti-republican. Congressmen and women are members of a coordinate branch, and they ought not to be clapping maniacally like so many members of the Supreme Soviet. (George W. Bush’s last SOTU was interrupted 72 times by applause).
It would be nice if Obama returned to the Jeffersonian tradition of writing out the State of the Union and sending it over by messenger, rather than delivering it in person before Congress assembled. Of course, that’s never going to happen. There is one thing he could do, however, that would endear him to millions of Americans in the viewing public: start the speech with the following words:
“Ladies and Gentlemen: Please hold your applause to the end.”
Cato Scholars Live-Blogging Obama’s Speech
Tune in here on Cato@Liberty tonight, where Cato scholars will provide live commentary on President Obama’s address to Congress.
The president is expected to highlight domestic issues in his speech, including the state of the economy, health care and energy policy. He’ll touch on foreign policy, addressing the wars in Iraq and Afghanistan and the future of the detention center at Guantanamo Bay.
The speech begins at 9:00 PM EST and is expected to last 50-60 minutes.
You can also follow our live commentary of Obama’s speech on Cato’s Twitter feed.
In Case You Were Wondering…
Not exactly a news flash, but worth repeating again and again.
The Foreclosure Five Dominate Case-Shiller Price Indexes
A CNNMoney.com report, “Home prices in record drop,” posted a scary map labeled “Falling Homes Sales.” But it actually shows falling home prices. Within the S&P Case-Shiller sample of 20 metropolitan areas, the steepest drop in prices (not sales) were in Phoenix, Las Vegas, San Francisco, Los Angeles, San Diego, Tampa and Detroit.
All 7 of those metropolitan areas (7 out of 20 in that index) lie within 5 states with by far the worst mortgage problems, as shown in my February 21 article, “The Foreclosure Five.” Yet I also showed that states with the steepest price declines also have had huge increases in home sales, which makes the label on the CNNMoney map doubly misleading.
My article used third quarter house prices because fourth quarter figures were not yet available. That turns out to make even less difference than I expected.
The fourth quarter Federal Housing Finance Agency (FHFA) figures show home prices down 21.8% for the year in Nevada, 20.5% in California, 15.2% in Arizona, 19.5% in Florida, and 11.8% in Michigan. Prices were down 3.7% in the median state, North Carolina, but up 21.6% over five years. That means prices fell by less than 3.7% last year in 24 states— including a half dozen states with home prices up a bit, and New York with only a 3.3% decline.
CNNMoney says, “The decline does not seem to be slowing – just the opposite. The average home price dropped 2.5% between November and December in the 20 top metro areas.” The FHFA data for all 50 states, by contrast, show a small 0.1% increase in home prices between November and December.
The article goes on say, “The S&P Case-Shiller National Home Price Index reported that prices sank a record 18.2% during the last three months of 2008, compared with the same period in 2007. Case-Shiller’s index of 20 major metropolitan areas fell 18.5%, also a record.” The FHFA, by contrast, shows that prices fell just 8.2% during the last three months of 2008, or 3.7% if using a median average. Ten percentage points is quite a wide gap.
What accounts for such huge differences between Case-Shiller and federal price indexes? CNNMoney imagines it’s because “Homes purchased without financing or ones too expensive to qualify for a Fannie-Freddie loan are not counted in the FFHA (sic) statistics.” That’s more than unlikely. The inclusion of cash sales and jumbo loans (larger than $729,750 in pricey area) can’t possibly explain why price declines in the Case-Shiller index look so much more dramatic those in the OFHEO/FHFA index.
The real reason is simple: Case-Shiller indexes are hugely dominated by the Foreclosure Five. In the Case-Shiller index of only 20 “top” metro areas, the Foreclosure Five account for 41.2% of that value-weighted index with California alone accounting for 27.4%.
The “national” Case-Shiller index totally excludes 13 states, such as Indiana and South Carolina, and samples only a fraction of many others. The Foreclosure Five account for 28.3% of that “national” index, with California amounting to 17.1%.
As is true of nearly all reprorting about foreclosures, underwater mortgages and falling house prices, what the Case-Shiller price index really shows is that many people are confusing what has been happening in the Foreclosure Five with what has been happening in the nation as a whole.
The ‘Inane and Insane’ World of Federal Criminal Law
Over at Sentencing Law and Policy, Douglas Berman takes a look at a recent federal case:
I cannot help but wonder if the authors of the Bill of Rights would have been even more troubled by the ugly way federal criminal power is exercised here. Rather than having state authorities indict and try the defendant for all his local crimes, the feds come in, secure a conviction through a broad regulatory law, and then obtain a long prison sentence by “proving” state crimes to a federal district judge (by a preponderance of evidence) at sentencing. Thanks to modern criminal justice realities, federal prosecutors can easily make a sentencing end-run around most of the constitutional criminal procedure rules the Framers put into the Fifth and Sixth Amendments.
It’s not just one case. This is a trend in the federal courts. In my new book, In the Name of Justice, I identify many other ways in which the government is going over, under, and around the Bill of Rights.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
