Archive for February, 2009
Dems Want D.C. Vouchers Dead. Hope Someone Else Pulls Plug.
Republican leaders in the House say that Democrats are using the 2009 omnibus spending bill to try to kill the D.C. voucher program. Democrats deny the charge. Who’s right?
Created in 2004, the D.C. Opportunity Scholarship Program was originally authorized for 5 years — a term that would have expired this June. While a typical reauthorization would have extended the program for another five years, Democrats have explicitly authorized funding only through the 2009-10 school year. If that truncated funding were not enough to worry participating families, Democrats have also called for the granting of a new veto power over the program for the DC City Council. If the bill passes as it is currently written, the voucher program can only be funded if it is reauthorized by both Congress and the City Council.
Clearly, this new language doesn’t kill the Opportunity Scholarship Program outright. Just as clearly, it puts the program on life support, and it suggests that Congress is hoping the DC Council will pull the plug for them, so that they can’t be directly blamed for kicking 1,900 children out of private schools that they have chosen and become attached to.
Critics of the program complain that, after its first two years, it had still not raised overall student academic achievement by a significant margin (though parents are happier with their voucher schools). What is less well known is that the program has proven to be dramatically more cost effective than the DC public schools. While voucher and non-voucher students are performing at about the same level, DC public schools spend more than four times as much per student. Total per pupil spending in DC was $24,600 in 2007-08, while voucher schools receive an average of less than $6,000.
If you could save 75 percent on a purchase, get the same quality of service, and know you’d be happier with the result, wouldn’t you do it? It seems Congressional Democrats would not.
Daniel J. Ikenson Discusses ‘Buy American’ on Bloomberg
Subscribe to Cato’s YouTube channel here.
Should America Defend Europe if it Won’t Defend Itself?
Iceland, in the midst of economic crisis, is considering closing its defense agency. Reports the Iceland Review:
Former Minister of Justice Björn Bjarnason described the Iceland Defense Agency as “remnants of times past” and said it might even complicate defense relationships with other nations. The Coast Guard should be focused on instead.
It may well be true that Iceland doesn’t have many enemies. But if the Europeans don’t believe they need defending, then isn’t this another good reason to bring home America’s troops? Certainly there’s no reason for the U.S. to defend countries which don’t bother to field militaries themselves!
PTO Error/Trademark Abuse Update
Two weeks ago, I published a TechKnowledge article telling the story of how a mistake at the U.S. Patent and Trademark Office and some sharp lawyering had put a small business on the ropes. The Nordstrom retail chain appeared poised to use the PTO’s processes to grind under an organic yoga and lifestyle clothing business called Beckons so it could take their trademark.
Not so fast, said the blogosphere. Several blogs picked up the story, as did the trademark bar. Hearing from disapproving customers, Nordstrom made sounds about a compromise.
That was well-executed PR, and it tamped down the story, but two weeks later there is no compromise. Nordstrom’s motion to cancel two small businesswomen’s trademark still stands. The women’s legal bills are still stacking up, and Nordstrom’s apparent gambit to take away their trademark is still playing out. It’s a case of pure and simple abuse which I will continue to follow and report on here.
Earlier this year, in a parallel case, Monster Cable Products relented from its wrongful trademark-based attack on a small business called Monster Mini Golf (dissimilar products = no likelihood of consumer confusion from using the same name). The head of the company realized that his attorneys had driven him into a legal and public relations dead-end, and he agreed to dismiss his company’s actions and reimburse Monster Mini Golf’s legal bills.
In today’s increasingly watchful and empowered, Internet-driven marketplace, it’s bad for business to use legal and regulatory processes unfairly. We’ll see if that lesson takes root in this case.
New Podcast: ‘Most Banks Are Fine’
If it ain’t broke, don’t fix it, says Cato Senior Fellow Gerald P. O’Driscoll Jr. of the country’s banking system. Since more than 90 percent of U.S. banks are doing fine, why all the talk about nationalizing them?
In today’s Cato Daily Podcast, O’Driscoll explains:
If you think the bank is insolvent, certainly it should be resolved. But do we really want to see the government running very large financial institutions? In effect, we already have seen that movie, it’s Fannie Mae and Freddie Mac, and they’re not doing such a good job of it.
Prosperity for the Looter Class
While the rest of the country is losing jobs and suffering from recession, the Bush-Obama philosophy of bigger government and more intervention has been good news for the inside-the-beltway crowd. Business Week reports:
As the nation’s most populous metro area feels Wall Street’s pain, the fourth-largest—Washington—is barely sensing the recession. In fact, Moody’s Economy.com estimates that metro Washington’s economy will actually grow 2.5% from mid-2008 through mid-2010. New York’s economy is expected to shrink 4.2%. It wouldn’t be the first time that Washington benefited from a national crisis. Back in 1930 the District of Columbia was a quiet Southern town, scoffed at by New York sophisticates. But as the federal government ramped up to fight first the Great Depression and then World War II, its population grew 65% in two decades.. “Oversight alone will [mean] tons of new jobs,” enthuses Jill Landsman, a spokeswoman for the Northern Virginia Assn. of Realtors, who says the pace of home sales has picked up over the past year even as prices have continued to fall.
Senator Lugar: ‘Lift the Embargo and Engage Cuba’
Sen. Richard Lugar (R-IN), the highest ranking Republican in the Foreign Relations Committee, has released a minority staff draft report on U.S. policy towards Cuba. It states that Washington’s sanctions against Havana have failed to bring democracy to the island and it recommends lifting the embargo and engaging Cuba.
The report’s recommendations are very similar to those that Ian Vásquez and I wrote for Cato’s recently published Handbook for Policymakers.
Omnibus Spending Bill Posted – In Useless Format
WashingtonWatch.com has the details.
Is Anyone in Washington Listening?
As my colleague Ian Vásquez wrote a couple of weeks ago, Latin Americans are fed up with the war on drugs. The F[ailure] Word is increasingly being used in the region to describe Washington’s prohibitionist strategy. Just take a look at today’s Wall Steet Journal op-ed by former presidents Fernando Henrique Cardoso (Brazil), César Gaviria (Colombia) and Ernesto Zedillo (Mexico). And last week, Caracol TV, Colombia’s main TV network, started airing a highly-publicized three-hour documentary called “Won Battles, Lost War” on the futility of the War on Drugs in that country. Over the last year, other Latin American leaders have also been calling for a different approach to drug trafficking that range from decriminalization to legalization.
During last year’s campaign president Obama promised to treat Latin Americans as partners. It remains to be seen if anyone in his administration is listening to these calls.
Cato Scholar Swami Aiyar Named among Top 10 Opinion Makers in India
Congratulations to Swami Aiyar, research fellow at Cato’s Center for Global Liberty and Prosperity, for being named among the “Top 10 Opinion Makers” in India by the Indian Express this Sunday. Nobel laureate Amartya Sen ranked first, Swami was in eighth place because of his style of writing “economics for the common man.” Swami’s weekly column, “Swaminomics,” appears in the Times of India.
Tucker Carlson Joins the Cato Institute
Noted columnist and television commentator Tucker Carlson has joined the Cato Institute as a senior fellow.
“I’ve admired the Cato Institute since I first read its publications, passed around like samizdat on my college campus,” said Carlson of his new affiliation. ”When I moved to Washington, I discovered that my impression of Cato had been right: The people I met there were some of the smartest, bravest and most interesting in the city. While others are blinded by expedience or group think, Cato stands on principle, always. I’m honored to be affiliated with it.”
Carlson will use his initial time with Cato to focus on writing a book on the state of the American polity. Through other writings as well as media and public speaking appearances, he will also seek to educate the broader public about how the libertarian philosophy differs from the standard liberal and conservative orthodoxies embodied in the two main U.S. political parties.
“Tucker Carlson is one of the most effective communicators of libertarian ideas in the nation,” said Cato founder and president Ed Crane. “We are delighted to have him associated with Cato as a senior fellow.”
Carlson was co-host of the staple CNN debate program “Crossfire” and also had his own programs on MSNBC (“Tucker”) and PBS (“Tucker Carlson: Unfiltered”), as well as appearing regularly on numerous other news programs. Though sometimes showcased by these networks as the “conservative” point of view, Carlson became a dependable critic of numerous Bush administration policies, including wasteful spending and the war in Iraq.
After graduating with a degree in history from Trinity College in Hartford, Conn., Carlson worked as a print journalist and went on to write for Vanity Fair, Policy Review, Esquire, The Weekly Standard, Reader’s Digest, The New Republic, The New York Times Magazine, and other publications.
Last month, noted civil libertarian Nat Hentoff joined Cato as a senior fellow.
Toxic TARP: Mr. Geithner’s Takeover Targets
A front-page story in the February 23 Wall Street Journal describes a plan to let the government convert its preferred shares in Citigroup to common stock, taking 25-40% ownership.
It could be worse. A brilliant February 19 Journal report by Peter Eavis warned that “Government capital injections sit like ill-disguised Trojan horses in the nation’s largest banks,” showing that under Treasury Secretary Geithner’s socialist scheming the government could seize 74% of Citigroup and 66% of Bank of America. Meanwhile, most other reporters kept claiming bank stocks collapsed simply because Geithner had left out a few details. On the contrary, he said too much, not too little.
The newer Journal report says, “When federal officials began pumping capital into U.S. banks last October, few experts would have predicted that the government would soon be wrestling with the possibility of taking voting control of large financial institutions. . . . Citigroup’s low share price already reflects, at least in part, a fear among shareholders that their stakes might be further diluted. A government move to take a big stake could backfire, potentially spurring investors to flee other banks, even healthier ones [emphais added].”
Why is any of this a surprise? Even before the scary “capital purchase program” was unveiled, I wrote in the October 20, 2008 issue of National Review that, “Conservative legislators who expressed fear about letting the Treasury buy mortgage-backed bonds were strangely enthusiastic about inviting the Treasury to acquire equity in companies. Critics of derivatives became enthusiasts for warrants . . . which would give the Treasury secretary virtually unlimited power to confiscate the wealth of stockholders of any company foolhardy enough to play this game.”
More recently, in a February 11 New York Post piece (subtly titled “A Plan to Kill Banks”) I explained that, “Once a bank or insurance company gets in bed with the government, the property rights of that company’s stockholders become uniquely insecure. When the government jumps into the cockpit, smart stockholders bail out. And depressed stock prices deflate the banks’ capital cushion.”
If “few experts” predicted these consequences of Treasury purchases of bank preferred shares and warrants, then why are they called experts?
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
