Archive for July, 2009
Gates Lays Down the Gauntlet on the F-22
Defense Secretary Robert Gates isn’t known for his stirring oratory, and his speech to the Economic Club of Chicago is representative of his understated style. But when it comes to the F-22, the SecDef’s ire shows through.
The overarching theme of the speech was the future of the U.S. military, a rather obvious topic. I don’t agree with all that Gates has done, and is preparing to do. I question his fixation on population-centric counterinsurgency and post-conflict reconstruction. I think he could have done more to cut unnecessary weapons systems, although he deserves credit for tackling the low-hanging fruit.
By the same token, much of the criticism leveled against Gates is unfair, and some of it is absurd. Gates demolishes the charge that he has slashed defense spending, by pointing out that the FY2010 budget is $534 billion, $19 billion more than in FY09. “Only in the parallel universe that is Washington, D.C.,” Gates noted, “would that be considered ‘gutting’ defense.”
But he hasn’t shied from making some cuts, and he has taken on some politically popular programs. And the F-22 is at the top of this list. Gates devoted nearly a third of the speech to the F-22, and the bottom line is this:
[I]f we can’t bring ourselves to make this tough but straightforward decision [to terminate the program at 187 aircraft] — reflecting the judgment of two very different presidents, two different secretaries of defense, two chairmen of the joint chiefs of staff, and the current Air Force Secretary and Chief of Staff, where do we draw the line? And if not now, when? If we can’t get this right — what on earth can we get right? It is time to draw the line on doing Defense business as usual. The President has drawn that line. And that red line is a veto. And it is real.
No one reading this speech should have any doubts that Gates and President Obama are serious. We’ll know perhaps as soon as Monday — the Senate is supposed to vote on the McCain-Levin amendment to strip funding for the F-22 from the Defense Authorization bill — whether Congress is paying attention.
Penn Jillette on Health Care Reform
Appearing on the “Glenn Beck Program” with ABC’s John Stossel, Cato H.L. Mencken research fellow Penn Jillete discusses his views on health care reform, the nanny state, Canada and more.
America Suffers When Washington Wins
The Washington Post has a “feel-good” story about how the huge expansion in the federal government has created a relatively strong job market in the D.C. area.
The story mentions that the federal workforce will expand by another 200,000 during the Obama years. Yet at no point does the author bother to mention (or perhaps even understand) that all these new bureaucrats are financed by draining resources from the productive sector of the economy.
A sample:
They came in droves wearing dark suits and carrying résumés yesterday — some lined up for a block in the hot sun waiting for the doors to open — to the only employer in this dismal economy hiring by the thousands: the federal government.
More than 6,000 people jammed into the National Building Museum in Washington to apply for openings at 75 agencies, including the departments of Treasury, Homeland Security, Justice, Veterans Affairs and Energy.[I]n the government, added [an applicant from] Silver Spring, “you get stability, you get great benefits and [an opportunity] to move up and progress in your job.” The federal government represents about one-third of the Washington region’s $401 billion economy. Some analysts said they think the ramp-up in federal hiring and spending will help the area emerge from the recession before most other metropolitan regions. From May 2008 to May 2009, the region lost 55,000 jobs. But during that same period, nearly 20,000 jobs were created, mainly in the federal government and federal contracting sector.
…The Partnership for Public Service, a nonprofit that sponsored the job fair and is surveying federal agencies to determine their staffing needs, estimates that the government will hire about 600,000 people over the next four years, as many as 120,000 of whom would work in the Washington region. The federal workforce, currently at 1.9 million, is expected to grow to about 2.1 million during the Obama administration, according to the Partnership for Public Service. That is comparable to the staffing level during the Johnson administration’s Great Society programs of the 1960s.
Regulation Cures Cancer
That’s the implicit message of an advocacy campaign the American Cancer Society’s “Cancer Action Network” is running in the Washington, D.C. Metro’s Capitol South station.
Large placards showing pictures of people people who are “NOW” healthy but will “LATER” be stricken with cancer give Capitol Hill staffers commuting in to work a clear message: Do something — anything. It’s part of the otherworldly bubble that lobbyists and advocacy groups press around staff and members of Congress.
The message they need — perhaps a little too complex for the subway — is that Congress has Münchausen syndrome by proxy with respect to the health care system.
Health Care — Very Nice
The Democrats’ determination to drive us all into a single, government-run health plan reminded me of this classic ad from the 1980s:
Obama’s Audacious NAACP Speech
President Obama’s audacious — some might say condescending — speech to the NAACP yesterday leaves me cold. What’s most chilling is the speech comes from a person who opposes helping poor parents assume the most important responsibility of all, choosing the best school for their child.
From the president:
To parents, we can’t tell our kids to do well in school and fail to support them when they get home. For our kids to excel, we must accept our own responsibilities. That means putting away the Xbox and putting our kids to bed at a reasonable hour. It means attending those parent-teacher conferences, reading to our kids, and helping them with their homework. . .
It also means pushing our kids to set their sights higher. They might think they’ve got a pretty good jump shot or a pretty good flow, but our kids can’t all aspire to be the next LeBron or Lil Wayne. I want them aspiring to be scientists and engineers, doctors and teachers, not just ballers and rappers. I want them aspiring to be a Supreme Court Justice. I want them aspiring to be President of the United States.
This, from the man who supports killing the DC voucher program, the ONLY education reform empirically proven to work through multiple random-assignment studies. These are thousands of young lives we are talking about.
This, from a man who sends his daughters to one of the most expensive private schools in the country, rather than the miserably failing and unsafe schools in their backyard.
PASS ID and National ID – Rejoinder to Schwartz
Ari Schwartz responded in characteristic even tones to my critique of his testimony in favor of the PASS ID Act, which would revive the moribund REAL ID law. It’s worth a rejoinder, and I’ll offer him the same again here if he wishes.
Ari clouds matters slightly by suggesting that my “strong biases” obscure certain facts. I readily admit having a strong bias in favor of liberty — it’s why I do what I do. Ari admits several biases, including one in favor of consensus-building, which was what I accused him of prioritizing over principle. Let’s put aside the question of bias.
It’s good to see Ari state that CDT does not support a national ID system. It would be better to see him state that CDT opposes having a national ID system. (I imagine this is just a matter of word choice, but it would be good to have clarity.)
Next, Ari says his testimony “makes it clear that we believe that PASS ID prevents the creation of a National ID system.” I don’t believe this is clear from his testimony. More importantly, this is not a sound assessment of what a national ID is or what PASS ID does.
We need some defined terms, so let’s tease out what he means by “national ID.” (He has told me that there is some distinction between a “national ID,” a “national ID system,” and perhaps a “national ID card,” but the distinction is lost on me. I believe a national ID card is part of a national ID system, both of which are commonly referred to in shorthand as a “national ID.”)
Twice in his testimony, he correctly calls REAL ID a national ID system. The factors that make it so appear to be “the very real possibility that individuals would not be able to function in American society without a REAL ID card” and “giving unfettered discretion to DHS to expand the ‘official purposes’ for which REAL ID cards could be required.”
What Fed Independence?
More than 250 economists have signed an “Open Letter to Congress and the Executive Branch” calling upon them to “defend the independence of the Federal Reserve System as a foundation of U.S. economic stability.”
Allan Meltzer is not a signatory to the petition and he has explained why not. The Fed has frequently not shown independence in the past, and there is no reason to expect it to do so reliably in the future. Professor Meltzer has just completed a multi-volume history of the Fed and knows all-too-well of the Fed’s willingness to accommodate the policies of administrations from FDRs to Lyndon Johnson’s.
I would add that the Fed’s behavior under Chairman Bernanke breaks new ground in aligning the central bank’s policy with Treasury’s. Much of what the Fed has done, first under Bush/Paulson, and now under Obama/Geithner, involves credit allocation. Since that ultimately involves the provision of public money for private purpose, it is pre-eminently fiscal policy. Central bank independence is a fuzzy concept. If it means anything, however, it is that monetary policy is conducted independently of Treasury’s fiscal policy.
In short, it is not the critics of the Fed who threaten its independence, but the Fed’s own actions. Its intervention in the economy is unprecedented in size and scope. It is inevitable that those actions would lead to calls for further Congressional oversight and control. The Fed is a creature of Congress and ultimately answerable to that body.
The petition raises legitimate concerns about whether the Fed will be able to tighten monetary policy when the time comes, and exit from its interventions in credit markets. But it is precisely the Fed’s own recent actions that raise those problems. Critics of recent Fed policy actions have for some time complained that the Fed has no exit strategy. Apparently the critics are now going to be blamed for the Fed’s inability to extricate itself from its interventions.
Cross-posted at ThinkMarkets
Slight Correction to My DC Per Pupil Spending Figure
In my IBD piece today I gave total per pupil spending in DC as $29,000 per pupil. That was based on an official k-12 audited enrollment count of 44,681, which I was told by a district official included the special needs students placed by the district in private schools. It turns out this was not the case, so we have to add in the special needs students to arrive at the total enrollment figure. Unfortunately, I wasn’t able to get that enrollment correction into the IBD in time for publication. Its impact on per pupil spending is not large, however.
The grand total audited enrollment was 48,353 students. From that we have to subtract 997 students in adult education programs and 1,498 students in preschool programs who are not covered by my k-12 budget calculations. That leaves us with a k-12 audited enrollment of 45,858. Dividing that in to the District of Columbia’s $1.3 billion k-12 education budget yields a per pupil spending figure of about $28,000.
Bernie Madoff and Government Fraud
In an op-ed Chris Edwards and I wrote for National Review Online yesterday, we shed light on the $100 billion or more in government subsidies pilfered by recipients through fraud and abuse:
Every year, criminals and cheats pilfer over $100 billion — that’s $40 billion more than Bernie Madoff scammed off his investors — in federal benefits to which they are not legally entitled. Medicare, Medicaid, food stamps, refundable tax credits, and many other programs are targets for looting.
Chris and I focused on fraud and abuse perpetrated by the recipients of taxpayer largesse, and Bernie Madoff made for a good comparison. But as the great economist and Cato adjunct scholar Robert Higgs also pointed out yesterday, “Bernie Madoff Was Only a Petty Crook Compared with Uncle Sam.” Typically, Higgs doesn’t mince words when it comes to comparisons between private and public Ponzi schemes:
Madoff, in contrast to the government, carried out his fraud in a civilized way: he merely misrepresented what he was doing, purporting to invest his clients’ money and to obtain a high rate of return on these investments. People dealt with him voluntarily. Those who suspected something was fishy did not do business with him, and some people went so far as to give substantial information to the SEC to show that Madoff’s business had to be fraudulent (which information the SEC ignored for years on end, of course).
The leaders of the U.S. government have carried out their Social Security fraud—essentially a Ponzi scheme, in substance exactly the same as Madoff’s scheme—since 1935. . . . The U.S. government, however, does not bother to claim any prowess in investing the money it forces people to surrender to its scheme. It admits that the ‘client’s’ return is now close to zero (varying a bit according to the client’s age and other factors). Nor does it carry out its admitted Ponzi scheme in a civilized way. Not only is participation in the scheme involuntary, but the government threatens violence against anyone who fails to participate as it commands him. Thus, the government operates its Ponzi scheme in a markedly more thuggish manner than Bernie would ever have dreamed of. He might have been a crook, but he was not a thug.
Obama Is Right to Stare Down Congress Over the F-22
If Congress votes to build even more F-22s in the 2010 Defense Authorization bill, it will be a sad example of parochial interests overriding our nation’s security. The move would defy the wishes of the Pentagon and Defense Secretary Gates, who have wisely called for the program to come to an end.
The Raptor’s whopping price tag—$356 million per aircraft counting costs over the life of the program— and its poor air-to-ground capabilities always undermined the case for building more than the 187 already programmed.
In the past week, Congress has learned more about the F-22′s poor maintenance record, which has driven the operating costs to more than $44,000 per hour of flying, which is well above those of any comparable fighter. And, of course, the plane hasn’t seen action over either Iraq or Afghanistan, and likely never will.
If Obama is serious about getting a handle on the enormous federal budget deficit, confronting Congress over the clear wastefulness of the F-22 is certainly a good place to start.
Trapped Inside the Mime’s Box
Kevin Carey, policy director at the think tank Education Sector, asserts that when it comes to higher education libertarians are boxed in, unable to find a solution to out-of-control college costs that won’t violate at least one, basic libertarian principle:
This puts libertarians in somewhat of a box. On the one hand, they tend to be hostile toward the tens of billions of public dollars that flow into colleges every year. The more colleges cost, the greater the claim on the average citizen’s hard-earned money and thus reduction in their precious liberty etc., etc.
But the best way to bend down the long-term higher education cost curve and thus reduce government spending is to increase government regulation in the form of mandatory reporting. So it’s a pick your poison situation for the Cato folks — would you rather have Big Brother’s hand in your wallet or his eye on your business? You really can’t avoid both.
Now, I don’t want to seem obnoxious about this. After all, in the same piece that produced this quote, Carey notes that “while my politics are pretty far from Cato’s and I often think they’re wrong, they tend to be wrong in interesting ways.” I thank him for that (I think), though I should note that the impetus for his piece is a paper that comes from the John William Pope Center – the same paper I discuss here – not from Cato. So it might not even be Cato that Carey finds interesting. Regardless, here’s my potentially obnoxious-sounding reply:
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