Archive for April, 2009
Former Prosecutor, Judge Calls for Drug Legalization
Many of those most involved in the drug war both at home and abroad recognize that it is an expensive failure, having had little impact of drug consumption while fostering crime and undermining civil liberties. In fact, many former cops, prosecutors, and judges have joined together in Law Enforcement Against Prohibition.
A former Orange County, California prosecutor and judge who once locked up drug offenders now advocates relaxing the drug laws. The Los Angeles Times has just published Steve Lopez’s interview with Jim Gray:
All right, tell me this doesn’t sound a little strange:
I’m sitting in Costa Mesa with a silver-haired gent who once ran for Congress as a Republican and used to lock up drug dealers as a federal prosecutor, a man who served as an Orange County judge for 25 years. And what are we talking about? He’s begging me to tell you we need to legalize drugs in America.
“Please quote me,” says Jim Gray, insisting the war on drugs is hopeless. “What we are doing has failed.”
As far as I can tell, Gray is not off his rocker. He’s not promoting drug use, he says for clarification. Anything but. If he had his way, half the revenue we would generate from taxing and regulating drugs would be plowed back into drug prevention education, and there’d be rehab on demand.
So here he is in coat and tie — with a U.S. flag lapel pin — eating his oatmeal and making perfect sense, even when talking about the way President Obama flippantly dismissed a question about legalizing marijuana last week during a White House news conference.
“Politicians get reelected talking tough regarding the war on drugs,” says Gray. “Do you want to hear the speech? Vote for Gray. I will put drug dealers in jail and save your children.”
I had gone to visit Gray in part to discuss his support for a bill introduced last month by Democratic San Francisco Assemblyman Tom Ammiano, who is calling for marijuana to be regulated and taxed much like alcohol.
There’s no good answer to drug abuse. But turning a health problem into a criminal law problem certainly is not the answer. It’s time to take the immense profit out of the drug market as have other countries, such as Portugal, which has decriminalized drug use.
The Tobacco Tax Hike
A federal tobacco tax hike took affect today, raising the price of cigarettes by 62 cents per pack.
Appearing on CNN today, Cato’s Chris Edwards says this tax will hit the poor more than anybody.
Taxpayer Financing of Campaigns Returns
Taxpayer financing of congressional campaigns has returned.
Yesterday Senators Richard Durbin (D-IL) and Arlen Specter (R-PA) introduced a modified version of their public financing bill first proposed in 2007, now as then called the Fair Elections Now Act (FENA). The older version included “free media vouchers” and discounted ad rates for television; the new model focuses more on small contributions and matching funds from the federal treasury.
These bills to finance campaigns with government revenue are often introduced in Congress and rarely make any headway, much less pass either chamber. Their perennial failure is not difficult to understand. Members are interested in campaign finance regulations that make it more difficult for challengers to raise money. They are not interested in giving candidates federal revenue to run against incumbents. Members are especially unwilling to fund campaigns because the public takes a dim view of using taxes in this way.
FENA tries to avoid public opposition by creating the appearance that taxpayers do not actually fund this scheme.
As Politico reports:
In the Senate version, the public money would come from assessing the country’s largest government contractors with a small surcharge… In the House, the money would come from the sale of broadcast spectrum.
But the question should be asked: if public financing of campaigns will actually achieve all the great things claimed by its proponents, shouldn’t the public be asked to pay the bill? After all, the public can expect to receive the promised benefits. Why should the bill be financed by government contractors and the sale of public assets?
We know the answer to these questions. Durbin and Specter have to obscure the role of taxes in these schemes because the public would oppose the bill if taxpayers were on the hook for the funding. Yet the senators obscure rather than eliminate the role of the taxpayer who will have to pay higher levies to fund more expensive government contracts or to replace the money that might have been obtained from the sale of the spectrum. Once the FENA lunch turns out not to be free, will voters feel like paying the tab?
The rationale for the new program also merits attention. In the past, advocates of taxpayer financing argued that private financing of campaigns corrupted representation, policymaking, and the general political culture. Replacing private contributions with public financing would, it was claimed, remove private interests and end corruption. That rationale appealed to most of the supporters of public financing; they tend toward the left politically and had little trouble believing the Republicans running Congress — all of them — were corrupt. But 2006 brought the Democrats back to power, and general claims of corruption no longer fit the background assumptions of both powerful legislators and supporters of public financing. So we now hear little about corruption and a lot about how FENA will free up legislators to “tend to the people’s business.”
Will “tending to the people’s business” be enough to convince Americans to spend tax dollars funding congressional campaigns at a time of record public sector deficits brought about by reckless spending on bailouts and much else?
The question answers itself.
Wednesday Podcast: ‘Turning a Corner on the War Metaphor’
Since President Bush’s “War on Terror” began in 2001, the use of a war metaphor has come with assertions of broader powers by the president. But the U.S. may be turning a corner on how terms like “war” are used, says Cato scholar David Rittgers.
In Wednesday’s Cato Daily Podcast, Rittgers argues that President Obama’s choice to do away with the war metaphor is a step in the right direction.
When the Government Takes Your Money, It Takes Your Property
When Daniel and Andrea McClung applied for a permit to build a small business on their property in Sumner, Washington, the city charged them nearly $50,000 to pay for improvements to the city’s entire storm drainage system.
The McClungs sued the city under the Fifth Amendment to the Constitution, whose Takings Clause prohibits the government from “taking” private property for public use without just compensation. They argue that the city cannot force them to pay fees for off-site pipes absent proof that their development would have a specific detrimental effect on the existing drainage system–and without any evidence that the impact was worth $50,000.
The Ninth Circuit ruled in favor of the city, reasoning that money is not property (so there could be no unconstitutional taking) and that because the fees were imposed by ordinance (so the city’s determination that the pipes needed upgrading was justification enough for the fees). The McClungs have now asked the Supreme Court to review their case.
Cato, joined by the Pacific Legal Foundation and the Building Industry Association of Washington, argues that this case is a perfect vehicle for the Court to revisit the scope of Fifth Amendment protections.
Our brief highlights the deep divisions among state and federal courts over several important issues, such as whether the Takings Clause applies to legislative (as opposed to bureaucratic) exactions and whether it applies to monetary exactions (not just burdens on land use). The Court should take this case to ensure that the standard for reviewing development conditions is uniform across the country and make clear that property right protections do not depend on ill-defined distinctions such as the form of property demanded by the government or the manner in which a condition is imposed.
Should Immigration Agents Target Businesses Knowingly Hiring Illegal Immigrants?
The Obama Administration plans to shift immigration enforcement from workers to employers, but the whole policy of “internal enforcement” of immigration law is the problem, says Cato scholar Jim Harper.
According to Harper, aligning legal immigration rates with the demand for new workers in the country is the only solution to the problem of illegal immigration.
He appeared on Fox News this week to debate this issue.
For more videos, subscribe to Cato’s YouTube channel.
Democrats Agree on Health Plan Outline: Be Afraid, Be Very Afraid
The New York Times reports that key congressional Democrats have agreed on the basic provisions for a health care reform bill. And while many details remain to be negotiated, the broad outline provides a dog’s breakfast of bad ideas that will lead to higher taxes, fewer choices, and poorer quality care.
Among the items that are expected to be included in the final bill:
- An Individual Mandate. Every American will be required to buy an insurance policy that meets certain government requirements. Even individuals who are currently insured — and happy with their insurance — will have to switch to insurance that meets the government’s definition of acceptable insurance, even if that insurance is more expensive or contains benefits that they do not want or need. Get ready for the lobbying frenzy as every special interest group in Washington, both providers and disease constituencies, demand to be included.
- An Employer Mandate. At a time of rising unemployment, the government will raise the cost of hiring workers by requiring all employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.
- A Government-Run Plan, competing with private insurance. Because such a plan is subsidized by taxpayers, it will have an unfair advantage, allowing it to squeeze out private insurance. In addition, because government insurance plans traditionally under-reimburse providers, such costs are shifted to private insurance plans, driving up their premiums and making them even less competitive. The actuarial firm Lewin Associates estimates that, depending on how premiums, benefits, reimbursement rates, and subsidies were structured, as many as 118.5 million would shift from private to public coverage. That would mean a nearly 60 percent reduction in the number of Americans with private insurance. It is unlikely that any significant private insurance market could continue to exist under such circumstances, putting us on the road to a single-payer system.
- Massive New Subsidies. This includes not just subsidies to help low-income people buy insurance, but expansions of government programs such as Medicaid and Medicare.
- Government Playing Doctor. Democrats agree that one goal of their reform plan is to push for “less use of aggressive treatments that raise costs but do not result in better outcomes.” While no mechanism has yet been spelled out, it seems likely that the plan will use government-sponsored comparative effectiveness research to impose cost-effectiveness guidelines on medical care, initially in government programs, but eventually extending such restrictions to private insurance.
Given the problems facing our health care system-high costs, uneven quality, millions of Americans without health insurance–it seems that things couldn’t get any worse. But a bill based on these ideas, will almost certainly make things much, much worse.
Or maybe it’s all just a massive April Fool’s joke.
Social Security Is Running a Surplus…Oops
For years, opponents of Social Security reform have told us that there is no need to rush into changing the program because, after all, Social Security is running a surplus today. Well, according to a new report by the Congressional Budget Office, not so much.
CBO reports that the Social Security surplus, originally expected to be $80-90 billion this year and next will shrink to $16 billion this year and just $3 billion next year (essentially a rounding error) as a result of the recession and rising unemployment. And those estimates may be far too optimistic. In February of this year, for example, Social Security actually ran a deficit—spending more than it took in through taxes and interest combined.
And, while CBO expects a return to modest surpluses after 2010, as the recession ends and unemployment falls, that is betting on the success of the unproven Obama economic program. If unemployment stays at current levels, Social Security will begin running permanent cash flow deficits in 2011 (eight years earlier than previously predicted).
Opponents of personal accounts have pointed out recent declines in the stock market as a reason why private investment should no longer be considered an option for Social Security reform. The evidence suggests that, even with recent market declines, private investment would still produce higher returns than Social Security. The new surplus numbers provide yet another lesson: if the economy is in such a mess that it hurts private investment, traditional Social Security isn’t going to be in any better shape.
The case for personal accounts remains as strong as ever.
Conservatives, Public Schools, and Pedagogy
I’ve received a fair bit of e-mail in response to my commentary yesterday on the recent defunding of the Bush administration’s Reading First program. Several people questioned my assertion that the program failed to yield a significant nationwide improvement in literacy. I cited a 2008 federal government report in support of that assertion, but questions were raised as to the validity of that study and other research seeming to contradict it was presented.
Taking the latter point first, it was pointed out that an EDS study of California found a positive impact to the program, as did an NWREL study of 5 other Western states. Note that there is not necessarily any contradiction between the federal study and the California and Western states studies. It’s possible that, nationwide, Reading First was associated with academic improvements in some schools, no effect in others, and lower performance in still others, resulting in the overall lack of impact reported by the federal government study. If so, it could be that schools in which Reading First proved effective are unevenly distributed around the country, and happen to be concentrated in the West.
Another possibility is that the federal study was so flawed that it failed to find a significant positive effect to Reading First when there actually was one. For the sake of argument, let’s say that this is true and that Reading First is actually working, overall, at improving student literacy nationwide. If so, what confidence should we have that it would continue to be effectively implemented in the long term, and not displaced by something else, or altered so as to become ineffective?
The answer is: not much. As I’ve noted in the case of the Follow Through experiment of the 60s and 70s, which is typical, even when a proven method is adopted in public school classrooms and yields great success it tends to be discarded for one reason or another. Since nothing fundamental has changed in the incentive structure of public schooling since the 1970s, there is no reason to believe that Reading First would buck the trend and somehow survive in perpetutity.
But all of this is of course academic, because Congress has already defunded the program. Democrats were not interested in continuing to evaluate the program to make absolutely sure of its impact. They killed it almost immediately because it is a traditionalist pedgaogical program that appeals to conservatives rather than “progressives.”
And that was the second point of my commentary: even when effective methods are implemented in public schools they remain subject to the inconstant winds of politics. If you want to find fields where better methods roiutinely displace worse ones rather than vice versa, you have to look to the free enterprise sector of the economy. Without the freedoms and incentives of the marketplace, stagnation and declining productivity are the norm. Education is no different in this regard from any other field.
And just to be clear, I am convinced by the earlier research that the pedagogical ideas behind Reading First are sound, and that when properly implemented its systematic use of phonics is superior to most of what it would have displaced. I’m simply pointing out that there was never good reason to expect a government-protected monopoly consistently implement it effecitvely, and that even if it did for some period of time Reading First would eventually have fallen victim to shifting political winds. While some may choose to disagree on the first point, the second has already come to pass.
If we want schools around the country to continually adopt and refine the best methods available, we must create the freedoms and incentives that will cause that to happen… or get used to disappointment.
So Much for the Promise of Financial Transparency
President Barack Obama promised transparency and accountability for how the federal government spends the trillions — or is it quadrillions (I’ve lost count)? — in bail-out money, stimulus outlays, and expanded government programs. Alas, his administration doesn’t seem interested in living up to his promises.
The watchdog for the Troubled Asset Relief Program, the government’s financial rescue plan, said today that the Treasury Department has not been cooperating with oversight efforts up to this point.
“We do not seem to be a priority for the Treasury Department,” the Congressional Oversight Panel’s Elizabeth Warren told a Senate Finance Committee hearing today.
“We have sent letters. We have requested that there be someone named so that we can get technical information. And so far, we have not been a first priority,” Warren said. “We use what you give us, and we will exercise the leverage given to us by Congress. In part, that’s why I’m here today. I’m here to talk to you about what’s happened so far, what we have discovered so far, the inquiries that we have in mid-stream and for which we continue to await responses.”
Warren, visibly frustrated with a lack of cooperation from the administration, emphasized, “This problem starts with Treasury.”
Obviously, this isn’t the first time that a presidential commitment has gone aglimmering. But given the extraordinary opportunity for pervasive waste, fraud, and abuse in the tsunami of new federal spending, few presidential commitments have been as important.
New York’s ‘Not Austere’ Budget
“Not Austere” is how the New York Times is describing the state’s $131.8 billion budget for 2009-2010. As a colleague pointed out to me, “how bad does a budget have to be for the New York Times to call it ‘not austere’?” Apparently, pretty bad.
In addition to an estimated $7 billion in tax and fee increases, total state spending would increase almost 9% when federal “stimulus” money is included. Supporters dismiss the inclusion of bailout money in the totals, but for those who think the “temporary” federal bailout money won’t foster otherwise higher state spending going forward, I’ve got a lot for sale in Poughkeepsie.
The Albany Times-Union reported that Gov. Paterson cited public employee labor contracts as a reason for the budget increase. Once again, the needs of the productive class (i.e., taxpayers) take a back seat to the bureaucratic class living at their expense. Of course, New York’s policymakers were also able to find money for critical expenditures on “gun clubs, churches, a yoga foundation and the Wantagh American Legion Pipe Band, among thousands of other projects.”
The biggest tax increase is a surcharge on personal income taxes paid by “the wealthy” that is supposed to net state coffers $4 billion. (Note to New York personal income tax payers: New Hampshire doesn’t have one.) But other tax increases will hit all walks of New York life including an increased assessment on utilities, a motor vehicle registration fee increase of 25 percent, an increase in driver’s license fees of 25 percent, increased taxes on beer and wine, a tax increase on auto rentals of 1 percent, and possibly the most insulting — a new $100 fee on tax preparers (guess who’s going to ultimately pay that one?).
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