Archive for September, 2009
More Evidence on America’s Socialism
KPMG has released its annual survey of personal income tax rates around the world. The survey covers 86 countries, including all the high-income nations and many middle- and lower-income nations, such as Brazil, China, and India.
The chart shows the top personal income tax rates in 2009 for national governments, per the KPMG study. The current top U.S. rate is 35 percent, which is substantially above the 86-country average of 28.9 percent. The Obama administration plans to let the U.S. rate jump to 39.6 percent in 2011, which would be almost 11 points higher than the international average.
Worse still, the United States has state income taxes with rates up to 10 percent that are piled on top of the federal tax. Some of the nations in the survey (e.g. Canada) also have subnational income taxes, but many, or most, of them do not.
Finally, note that supporters of government health care expansion have been eyeing further increases in the top U.S. tax rate above 40 percent. Alas, we need more of the Global Tax Revolution to sweep across our shores.
Speaking in Nashville
I’ll be giving two talks in Nashville on Tuesday, September 29.
At 5:00 p.m., I’ll speak at the Vanderbilt University Law School, in the Moore Room on the second floor, on a joint Law School-Owen Business School panel, “Drug Legalization and Emerging Economic Opportunities.” Audience will be mostly law and business students, but it’s open to the public.
Then I’ll speak on the current political situation at an event sponsored by America’s Future Foundation and the Tennessee Policy Center at Mulligan’s Pub in downtown Nashville (117 2nd Ave N., Nashville, TN 37201-1901). Drinking will start at 6:30, and I’ll make remarks about 7:30. You can RSVP for that event here.
I hope to see Nashville-area friends at one or both events.
Bagram, Habeas, and the Rule of Law
Andrew C. McCarthy has an article up at National Review criticizing a recent decision by Obama administration officials to improve the detention procedures in Bagram, Afghanistan.
McCarthy calls the decision an example of pandering to a “despotic” judiciary that is imposing its will on a war that should be run by the political branches. McCarthy’s essay is factually misleading, ignores the history of wartime detention in counterterrorism and counterinsurgency, and encourages the President to ignore national security decisions coming out of the federal courts.
More details after the jump.
NYT Nonsense on SAFRA
With the Student Aid and Fiscal Responsibility Act (SAFRA) likely to be voted on by the full House or Representatives today, the media is finally giving some space to debate over the bill. Unfortunately, the New York Times only pays attention to the parts it likes, writing in an editorial today that:
The private lenders and those who do their bidding in Congress have recently taken issue with a Congressional Budget Office analysis that showed that the bill would save about $87 billion over the next 10 years.
They argue, absurdly, for example, that the savings would be smaller if the system were analyzed under accounting rules other than the ones that the federal government is required to use. The aim is to mislead taxpayers and members of Congress into believing that the C.B.O. estimate is dishonest.
Um, excuse me New York Times, but the CBO has never said the bill — not just going from subsidized to direct lending, but the whole bill — would save $87 billion over ten years. Moreover, it has been a series of analyses from the CBO — albeit driven by requests from members of Congress – that have continually increased the cost estimates for SAFRA. (I have linked to all the CBO analyses here.) CBO’s very first estimate of the bill’s likely net cost put it at around $6 billion over ten years, and it only went up from there after incorporating such things as lending risk and potentially higher Pell grant costs.
Of course, the Times isn’t alone in its refusal to talk honestly about SAFRA. Despite all of the CBO estimates, yesterday U.S. Secretary of Education Arne Duncan said SAFRA would give college students and numerous other interests the world without costing taxpayers a dime. “We’re not asking the taxpayers for one single dollar,” he said. And SAFRA’s sponsor, Rep. George Miller (D-CA), has been touting his bill as a revolutionary money saver since day one.
The truth on this thing is out there, but it’s definitely not in the New York Times.
Why Wall Street Loves Obama
Was it just me, or did there seem to be a whole lot of applause during Obama’s Wall Street speech? Remember this was a room full of Wall Street executives. The President even started by thanking the Wall Street execs for their “warm welcome.”
While of course, there was the obligatory slap on the wrist, that “we will not go back to the days of reckless behavior and unchecked excess,” but there was no mention that the bailouts were a thing of the past. Indeed, there is nothing in Obama’s financial plan that would prevent future bailouts, which is why I believe there was such applause. The message to the Goldman’s of the world, was, you better behave, but even if you don’t, you, and your debtholders will be bailed out.
The president also repeatedly called for “clear rules” and “transparency” – but where exactly in his plan is the clear line dividing who will or will not be bailed out? That’s the part Wall Street loves the most; they can all say we’ve “learned the lesson of Lehman: Wall Street firms cannot be allowed to fail.” At least that’s the lesson that Obama, Geithner and Bernanke have taken away. The truth is we’ve been down this road before with Fannie and Freddie. Politicians always called for them to do their part, and that their misdeeds would not be tolerated. Remember all the tough talk after the 2003 and 2004 accounting scandals at Freddie and Fannie? But still they got bailed out, and what new regulations were imposed were weak and ineffective.
As if the applause wasn’t enough, as Charles Gaspario points out, financial stocks rallied after the president’s speech. Clearly the markets don’t see his plan as bad for the financial industry.
It would seem the best investment Goldman has made in recent years was in its employees deciding to become the largest single corporate contributor to the Obama Presidential campaign. That’s an investment that continues to yield massive dividends.
A Bizarre Privacy Indictment
Page one of today’s Washington Times—above the fold—has a fascinating story indicting the White House for failing to disclose that it will collect and retain material posted by visitors to its pages on social networking sites like Facebook and YouTube. The story is fascinating because so much attention is being paid to it. (It was first reported, as an aside at least, by Major Garrett on Fox News a month ago.)
The question here is not over the niceties of the Presidential Records Act, which may or may not require collection and storage of the data. It’s over people’s expectations when they use the Internet.
Marc Rotenberg, president of the Electronic Privacy Information Center, said the White House signaled that it would insist on open dealings with Internet users and, in fact, should feel obliged to disclose that it is collecting such information.
Of course, the White House is free to disclose or announce anything it wants. It might be nice to disclose this particular data practice. But is it really a breach of privacy—and, through failure to notify, transparency—if there isn’t a distinct disclosure about this particular data collection?
Let’s talk about what people expect when they use the Internet and social networking sites. Though the Internet is a gigantic copying machine, some may not know that data is collected online. They may imagine that, in the absence of notice, the data they post will not be warehoused and redistributed, even though that’s exactly what the Internet does.
There can be special problems when it is the government collecting the information. The White House’s “flag@whitehouse.gov” tip line was concerning because it asked Americans to submit information about others. There is a history of presidents amassing “enemies” lists. But this is not the complaint with White House tracking of data posted on its social networking sites.
People typically post things online because they want publicity for those things—often they want publicity for the fact that they are the ones posting, too. When they write letters, they give publicity to the information in the letter and the fact of having sent it. When they hold up signs, they seek publicity for the information on the signs, and their own role in publicizing it.
How strange that taking note of the things people publicize is taken as a violation of their privacy. And failing to notify them of the fact they will be observed and recorded is a failure of transparency.
America, for most of what you do, you do not get “notice” of the consequences. Instead, in the real world and online, you grown-ups are “on notice” that information you put online can be copied, stored, retransmitted, and reused in countless ways. Aside from uses that harm you, you have little recourse against that after you have made the decision to release information about yourself.
The White House is not in the wrong here. If there’s a lesson, it’s that people are responsible for their own privacy and need to be aware of how information moves in the online environment.
New York Mayor Opposes Closing Schools for Muslim Holidays
I have been trying for years to make people understand that a single system of government schools is fundamentally at odds with American values, especially individual liberty and equal treatment under the law. New York City Mayor Michael Bloomberg, in opposing a move to let city public schools close for Muslim holidays as they do for Christian and Jewish holidays, recently made my point in one, simple sentence:
One of the problems you have with a diverse city is that if you close the schools for every single holiday, there won’t be any school.
Exactly. So which religions, and which people, will get to be more equal than others, Mr. Mayor?
With universal school choice, we wouldn’t have to grapple with such terrible questions.
An Australian Perspective on Joe Wilson
Will you allow a foreigner to comment on something that has intrigued her about this great country?
All this hand-wringing and then censure (not to mention impeachment talk) over Rep. Joe Wilson’s admittedly rude intervention at President Obama’s speech last week has me baffled. Partly, it is because I come from a land that is governed by a parliamentary system, where Question Time is a much-loved institution. The offense (manufactured, perhaps) that Representative Wilson’s comment has caused is almost laughable when I think about some of the insults that have been hurled in both directions in Australia’s parliament. Here’s a collection of quotes from former Australian Prime Minister Paul Keating just for starters (warning: offensive language). Here is a Brit’s take on why American politicians are “a bunch of wimps.”
Mainly, though, I am surprised that questioning of power is not more valued in America. To be sure, the President of the United States is not answerable to Congress in the same way that Ministers (including Prime Ministers) are to a Westminster-system parliament, but I would have thought that questioning the president would be well within the bounds of a nation conceived in liberty and on the understanding that all men are created equal. You got rid of infallible kings in 1776, remember?
I get why the Democrats are making political hay out of Representative Wilson’s outburst, even if I think they are hypocrites for suddenly finding religion on civility, given their own history. And I thoroughly reject, by the way, the notion that much of the criticism directed towards Obama is based on racism, even if this sort of talk gives unfortunate credence to the claims. But those same Dems who are shocked (shocked!) by Joe Wilson’s behavior are right now allowing a tax cheat to pull the nation’s purse strings.
This focus on style — who says what, how they say it, what their motivations might be — over the substance of what the congressional and administrative branches of government are doing is tremendously disappointing. I have heard far more censorious talk about Joe Wilson’s character and the propriety (or lack thereof) of what he did than of the point he was making. Meanwhile, the Dems are keeping “internal” investigations of Charlie Rangel’s ethical violations very quiet indeed.
Quite frankly, I’m far more interested in those than I am in Joe Wilson’s rudeness.
Government Pays $4 Million for a Bike Rack
The $4 million Union Station Bike Transit Center is scheduled to open in Washington, DC on October 2nd. According to an August Washington Post story, 80 percent of the cost of this opulent bike center is being borne by federal taxpayers via the U.S. Department of Transportation.
Look, I harbor no animosity against bike riders, but under what authority — legal or moral — does the federal government tax me in order to build bike centers for parochial, special interests? The Constitution?
But let’s pretend — and I mean pretend – that such federal expenditures are legitimate. The Post article say the center will have 150 indoor bike racks and 20 outdoors. A recent NPR article says it will hold 130 bikes. Whatever the figure, at a cost of $4 million, it comes out to around $25-$30 thousand per bike. And, yes, I recognize that the “1,700-square-foot building west of the station will also have changing rooms, personal lockers, a bike repair shop and a retail store that will sell drinks and bike accessories.” But the ultimate purpose is to hold bikes. In my mind, the extra extravagance merely reflects the fact that taxpayers are picking up the tab.
There’s the old saying that a picture is worth a thousand words. In this case, it’s more like 4 million:
There you go, America. Your taxes are funding this multi-million dollar bike rack in Washington, DC — the beneficiaries of which will probably be the same Capitol Hill lobbyists and congressional staffers who spend all day pilfering your paychecks.
20-somethings Will Pay for Big Government
A front-page Washington Post story today notes that the cost of Obama-style health care reform will fall disproportionately on young adults.
Younger workers are typically more healthy than the population at large, and a significant share of them quite rationally choose not to buy health insurance, as my colleague Mike Tanner explains in a recent op-ed. The major health care plans on the table in Washington would force them to buy coverage. As the Post story explains:
Drafting young adults into any health-care reform package is crucial to paying for it. As low-cost additions to insurance pools, young adults would help dilute the expense of covering older, sicker people. Depending on how Congress requires insurers to price their policies, this group could even wind up paying disproportionately hefty premiums—effectively subsidizing coverage for their parents.
I’m beginning to see a pattern. Those same young workers will be forced to pay the bills for soaring Social Security and Medicare expenditures when the Baby Boomers begin retiring en masse a decade from now. And of course, they will be the ones paying off the $9 trillion in additional federal debt expected to be wracked up from the current explosion in federal spending.
I always thought parents were supposed to support their kids, not saddle them with bigger bills and huge debts.
Czar of All the Americans
Anger about Obama’s many “czars” is rising, reports the Washington Post:
On paper, they are special advisers, chairmen of White House boards, special envoys and Cabinet agency deputies, asked by the president to guide high-priority initiatives. But critics call them “czars” whose powers are not subject to congressional oversight, and their increasing numbers have become a flash point for conservative anger at President Obama.
Critics of the proliferation of czars say the White House uses the appointments to circumvent the normal vetting process required for Senate confirmation and to avoid congressional oversight.
I have tended not to take concern over “czars” very seriously. After all, advisers to the president can’t exercise any power that the president doesn’t have (or assume without response from Congress or the courts). And I figured the White House doesn’t call people “czars,” that’s just a media term, so it’s not really fair to blame the White House for what reporters say.
But then, thanks to crack Cato intern Miles Pope, I discovered that the White House does call its czars czars, at least informally. A few examples:
In an interview on April 15, 2009 Obama said, “The goal of the border czar is to help coordinate all the various agencies that fall under the Department of Homeland Security…”
In a March 11, 2009, briefing, press secretary Robert Gibbs turned to “address the czar question for a minute, because I think I’ve been asked in this room any number of times if the czars in our White House to deal with energy and health care had too much power.”
On March 11, 2009 Vice President Biden said, “Today I’m pleased to announce that President Obama has nominated as Director of the Office of National Drug Control Policy — our nation’s drug czar — Gil Kerlikowske…”
More examples here.
So they do like czar imagery. So have at them, critics.
And while I said that the advisers have no real power, there’s at least one who does — a real czar — the “pay czar,” Kenneth Feinberg. He “has sole discretion to set compensation for the top 25 employees” of large companies receiving bailouts, and his “decisions won’t be subject to appeal.” Now that’s a czar.
Another Day, Another Tranche of Afghanistan Reading Material
Item: The Coalition for a Realistic Foreign Policy, a group of concerned scholars and authors who work on international security and U.S. foreign policy, have issued an open letter to President Obama warning him not to expand U.S. involvement in that country. (Full disclosure: I was a signatory.) The list of signatories includes many of the scholars who urged President Bush not to invade Iraq. Politico was the first to run the story: see here.
Item: Via Michael Cohen, former CIA counterterrorism honcho Paul Pillar takes to the pages of the Washington Post to think through the concept of “safe havens” in Afghanistan. His conclusion?
Among the many parallels being offered between Afghanistan and the Vietnam War, one of the most disturbing concerns inadequate examination of core assumptions. The Johnson administration was just as meticulous as the Obama administration is being in examining counterinsurgent strategies and the forces required to execute them. But most American discourse about Vietnam in the early and mid-1960s took for granted the key — and flawed — assumptions underlying the whole effort: that a loss of Vietnam would mean that other Asian countries would fall like dominoes to communism, and that a retreat from the commitment to Vietnam would gravely harm U.S. credibility.
The Obama administration and other participants in the debate about expanding the counterinsurgency effort in Afghanistan can still avoid comparable error. But this would require not merely invoking Sept. 11 and taking for granted that a haven in Afghanistan would mean the difference between repeating and not repeating that horror. It would instead mean presenting a convincing case about how such a haven would significantly increase the terrorist danger to the United States. That case has not yet been made.
Item: Michael Crowley offers a piece in the New Republic that strongly implies but doesn’t quite come out and say that President Obama should ignore the skeptics and the political risks and wade deeper into Afghanistan. The piece swallows whole the conventional wisdom narrative on Iraq–that the Surge amounted not to a combination of defining down “victory” and appeasement of Sunni tribes but rather a borderline miracle whereby Gen. Petraeus loosed his wonder-working COIN doctrine on the maelstrom of violence in that country and produced a strategic victory. Crowley then uses this narrative to frame the decision before President Obama. Still, he writes
[I]f the definition of success isn’t clear to the Obama team, the definition of defeat may be. Bush argued unabashedly that Iraq had become “the central front in the war on terror” and that withdrawing before the country had stabilized would hand Al Qaeda not only a strategic but a moral victory. Current administration officials don’t publicly articulate the same rationale when discussing Afghanistan. But former CIA official Bruce Riedel, a regional expert who led the White House’s Afghanistan-Pakistan review earlier this year, cited it at the Brookings panel held in August. “The triumph of jihadism or the jihadism of Al Qaeda and the Taliban in driving NATO out of Afghanistan would resonate throughout the Islamic World. This would be a victory on par with the destruction of the Soviet Union in the 1990s,” Riedel said. “[T]he stakes are enormous.”
Obama may have one last thing in common with Bush: personal pride. Bush was determined to prevail in Iraq because he had invaded it. And, while Obama, of course, had nothing to do with the invasion of Afghanistan, he has long supported the campaign there–including during the presidential campaign as a foil for his opposition to the Iraq war. Speaking before a group of veterans last month, Obama called Afghanistan a “war of necessity”–a phrase which politically invests him deeper in the fight. “The president has boxed himself in,” says one person who has advised the administration on military strategy. “The worst possible place to be is that our justification for being in a war is that we’re in a war.”
Lots to chew on.
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