Archive for November, 2009
What’s Going on in Japan?
Two weeks ago in Defense News, I argued that America’s alliances are growing increasingly detached from American security interests. With reference to Defense Secretary Bob Gates’ visit to the newly-minted government in Japan, I wrote that
after imploring [new Japanese PM Yukio] Hatoyama to continue Japan’s minuscule contribution to the war in Afghanistan and not to reconsider the deal to realign U.S. forces in Japan, Gates was asked whether the U.S. military role in Japan might be scaled back. Offering the obligatory reference to the countries’ “shared interest” in regional security, Gates admitted that “the primary purpose of our alliance from a military standpoint is to provide for the security of Japan … It allows Japan to have a defense budget … of roughly 1 percent of GDP.”
This is an excellent reason why the Japanese should support the alliance, but it raises the question of why U.S. taxpayers should want to pick up the tab for Japan’s security.
MCAS Futenma
But the Hatoyama government seems intent on reopening old wounds. Aside from its insistence on renegotiating the Futenma agreement on shifting US forces around in Japan, now comes the news that the just-elected Democratic Party (DPJ) is going to (*ahem*) open the kimono and reveal “evidence of a decades-old secret pact between Tokyo and Washington that allowed U.S. ships and aircraft to carry nuclear weapons on stopovers in Japan.”
The idea of a Japanese government breaking Japanese law in order to allow American military vessels to carry nuclear weapons in Japan is wildly unpopular among Japanese. In large part, this is a pretty transparent move by the DPJ to stick it to the now out of power Liberal Democratic Party (LDP) by tying them to illegal and secretive practices that huge majorities of the Japanese public oppose.
But the broader point is that for those of us who have been advocating a larger role in Asia for Japan and a smaller one for the United States, the increasingly independent nature of the new DPJ government ought to be seen as a feature, not a bug. If the Japanese are really feeling their oats and aren’t too excited at continuing the LDP’s lockstep alliance with the United States, more power to them. If they want fewer US troops in Japan, terrific. We’re militarily overextended as it is and have serious economic problems to deal with. The Bush administration took some baby steps in this direction. The Obama administration should keep the ball rolling.
American officials ought to be quietly thinking about how to use the developments in Japan to start handing off responsibility for defending Japan to the Japanese government.
The Nets Finally Win!
Unfortunately, that win comes as another blow to property rights:
The last major obstacle to a groundbreaking for the $4.9 billion Atlantic Yards development in Brooklyn fell Tuesday when New York’s highest court, the Court of Appeals, dismissed a challenge to the state’s use of eminent domain on behalf of the developer, Bruce C. Ratner.
Mr. Ratner, whose 22-acre development has been delayed for three years by a flurry of lawsuits, the collapse of the credit and real estate markets and a glut of luxury housing, plans to begin selling tax-free bonds next month to finance the development’s cornerstone project: an 18,000-seat basketball arena for the New Jersey Nets at the intersection of Flatbush and Atlantic Avenues near downtown.
Given the high-profile nature of the would-be new tenants of the land, this is the most famous property rights case currently being litigated, but it’s the same ol’ story: rich company wants land on the cheap, company gets the government to seize the land, property owners lose their land for the benefit of another private party for a decidedly not public use.
And, as I allude to in this post’s title, this loss comes to the 0-13 New Jersey Nets. (Even the Redskins can win a game without getting the government to bail them out!)
And while the story goes on to promise all this new office space and buildings to go on the newly acquired land, we know from recent experience that a successful deal doesn’t automatically trigger the jobs and benefit promised. To give you an idea what the rest of Brooklyn is looking like:
If construction begins in the coming weeks as expected, Atlantic Yards will stand out in a city where 530 different construction projects are stalled, sitting lifeless and without adequate financing in virtually every neighborhood.
One would think that if there was such a guarantee of money to be made, investors would be funding one of those 530 other projects in the city.
And if you think a brand spanking new stadium is more likely to bring in business to the immediate area, just ask the shop owners around the new Yankee Stadium how business was this year — when that team put up the best record in baseball and won the World Series. (NB: Go Red Sox!)
In any event, Cato continues the fight for the Fifth Amendment’s Takings Clause. We filed a brief in a case coming before the Court next week, Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, which can be found here; and just yesterday filed a brief urging the Court to consider 480.00 Acres v. United States, which you can read here.
HT: Jonathan Blanks
Libertarian Policy Blogs
Looking for more commentary and analysis from Cato scholars? You can find their own blogs here:
Daniel Griswold – Mad About Trade
Jim Harper – Washington Watch & Tech Liberation
Daniel J. Mitchell – International Liberty
Will Wilkinson – WillWilkinson.net
Jeffrey Miron – Libertarianism, from A to Z
Patrick Michaels – World Climate Report
Randal O’Toole – The Antiplanner
David Boaz – DavidBoaz.com
Malou Innocent – Huffington Post
Julian Sanchez – JulianSanchez.com
Gene Healy – GeneHealy.com
Tom Palmer – TomGPalmer.com
An Easy Target: Mocking the Stimulus
Writing for The Hill, I explain why Keynesian-style stimulus does not work. In addition, I note that the so-called stimulus was just an excuse for pork-barrel spending. But my concluding point, excerpted below, is that the White House goofed politically by making specific claims about the good things that ostensibly would happen by increasing the burden of government spending:
The only surprise was that the White House was foolish enough to make specific claims of the good results that supposedly would flow from all the pork-barrel spending. In part, this is the absurd notion of claiming 600,000-plus “jobs saved or created” when total employment actually has fallen by more than 3 million. But the bigger mistake was claiming that the faux stimulus would keep the unemployment rate from rising above 8 percent and that failure to squander $787 billion would cause the jobless rate to climb to 9 percent. The politicians got their wish, yet now the unemployment rate is above 10 percent. Brilliant.
Some Facts on Executive Compensation
All too often policy debates regarding executive compensation appear driven more by populist politics than any real basis in fact. In order to add some light to this debate, two professors at New York University’s Stern School of Business, Gian Luca Clementi and Thomas Cooley, recently released a working paper, offering their findings on trends in executive compensation, many of which I found surprising.
First off, Professors Clementi and Cooley measure executive compensation more broadly than just salary, perks and bonuses. They include annual change in value of own company stock and option holdings, as well as the value of own company stock sales and newly awarded securities. This broader measure is intended to give a fuller picture of how closely an executive’s wealth is tied to the performance of their firm. Not too surprising given this broader measure, the professors find that salary and bonuses are actually a small faction of overall compensation. Stock holdings, awards and options are far larger shares of compensation.
Among their other findings: A $1,000 increase in shareholder wealth is associated with about a $35 rise in CEO wealth. One factor behind this relationship is the relatively high own company stock holdings of CEOs. For 2006, about a fourth of CEOs held more than 1% of their company’s stock, while 10% held more than 5%.
A surprisingly finding was that it was quite common for CEOs to actually see negative compensation. For instance in 2002, the professors find that 40% of CEOs lost money, driven many by their own company stock and option losses. These are just a few of the paper’s findings. Hopefully this research, and others, will provide a more factual basis for debates surrounding executive compensation.
Battle of the Ilyas and More on the Chicago Gun Case
Josh Blackman, my coauthor on “Opening Pandora’s Box? Privileges or Immunities, The Constitution in 2020, and Properly Incorporating the Second Amendment,” has inaugurated a series of podcasts devoted to law and liberty. He’s already has an interview with PLF’s Timothy Sandefur (also a Cato adjunct scholar) and the Independence Institute’s David Kopel (also a Cato associate policy analyst). Tim authored Cato’s brief in McDonald v. City of Chicago, the case seeking to extend Second Amendment protections to the states — and about which I blogged yesterday.
Well, now Josh has come up with a bit of a twist on the podcast medium: he invited George Mason law prof Ilya Somin (also a Cato adjunct scholar) and me to engage in a contest based on the trivia challenge Sixth Circuit Judge Danny Boggs issues his clerkship applicants. The winner of this “Battle of the Ilyas” would receive the free and exclusive right to the Ilya name — because apparently it’s too confusing to have two libertarian lawyers named Ilya in the same metropolitan area/professional circle. It was a lot of fun, and while I won’t tell you the outcome here, you can easily find that out and listen to the conference call we had about it.
Finally, after this “Battle of the Ilyas,” Josh asked me to record a podcast about McDonald — which inspired our article — and United States v. Comstock (another important case in which Cato filed a brief, and which I blogged about here). Happy listening!
A Surveillance Newsflash from Planet Hopeychange
Climb aboard the TARDIS campers, we’re going to take a magic YouTube voyage to a strange parallel universe, very much like ours, except Barack Obama sports a dashing goatee and… Sorry, what’s that? Not a parallel universe, you say? August of 2007, you say?
Wait, that can’t be right. Because right around 20 seconds in, Barack Obama says that under his administration, there would be “no more National Security Letters to spy on citizens who are not suspected of a crime.” That’s not who we are, he says! Not what’s needed to fight terrorists, he says!
And yet his Justice Department has quietly but steadfastly fought any effort to limit the use of National Security Letters. When Democratic lawmakers attempted to require that these administrative subpoenas, issued by FBI agents without judicial supervision, be issued only to obtain the records of suspected terrorists or foreign agents or people they’d been in contact with—or if necessary to obtain records relevant to the activities of suspected terrorists in the interest of identifying specific individuals—the administration worked behind the scenes to rally Republicans and Blue Dogs against those changes.
You know, a few more years like this, I’m liable to run right out of Hope™.
On What Planet Is Lindsey Graham a Free-Trader?
I’ve just started reading a new article by economists at the World Bank and the Peterson Insititute. The gist of the paper is that greenhouse gas emission targets will have little effect on “carbon leakage”, the apparently-largely-theoretical phenomenon whereby carbon-intensive industries move to less regulated jurisdictions in response to stringent emissions regulations in their original home. So we can strike that off our list of worries.
The authors do reach the conclusion, though, that output of energy-intensive products will decline in response to emissions caps and the political temptation for “carbon tariffs” will be strong (see here why that is a bad idea). Basing the carbon tariffs on the carbon content of imports–as opposed to, say, the carbon content of domestic production displaced– will lead to significant falls in developing country exports. Music to protectionists’ ears, perhaps, but not exactly a recipe for international cooperation or global prosperity.
I’m still digesting the substance of the paper, but I was struck by what I think is a pretty large oversight/mischaracterization in the second paragraph. The authors refer to the “internationally-minded” Sen. John Kerry (true in the serves-on-the-foreign-relations-committee-and-speaks-French sense, I guess) and the “free-trade oriented” Senator Lindsey Graham (R, SC).
Huh? A cursory glance at Senator Graham’s record indicates that in no serious sense could he be deemed “free-trade oriented.” Senator Graham has voted to lower trade barriers less than half (43 percent) of the time and has taken only 20 percent of opportunities to cut subsidies. That puts him in the “interventionist/internationalist” camp. Maybe the authors didn’t know about the Center for Trade Policy Studies’ “Free Trade, Free Markets: Rating Congress” tool, but surely Senator Graham’s co-sponsorship of the notorious Schumer-Graham legislation, among other transgressions, should have tipped them off.
Right and Left Take on Feds
The New York Times has a good article about how lawyers on both the right and left are working together to try and roll back state power in the criminal justice system. Here is an excerpt:
“It’s a remarkable phenomenon,” said Norman L. Reimer, executive director of the National Association of Criminal Defense Lawyers. “The left and the right have bent to the point where they are now in agreement on many issues. In the area of criminal justice, the whole idea of less government, less intrusion, less regulation has taken hold.”
There’s plenty to be concerned about — overcriminalization, federalization of crime, and the militarization of police tactics. I told the reporter that Cato has been uniquely positioned on this subject — that is, we remind our friends on the left that businesspeople have their rights violated all the time. And we remind our friends on the right that police and prosecutors abuse their powers in the “blue collar” context as well. It is encouraging that more organizations are taking a more skeptical view of government power generally and are embracing more principled positions with respect to the rights of the accused set forth in the Constitution.
Other blogs are covering this article and subject too — go here, here, and here.
It was also nice to see that our friend Harvey Silverglate’s new book (Three Felonies a Day) was mentioned. We had a book forum for Harvey a few weeks ago and C-Span was here to cover it.
For additional Cato work on criminal justice, go here, here, and here.
ObamaCare Cost-Estimate Watch: Day #158
House Democrats introduced the first complete draft of President Obama’s health plan on June 19.
Since then, Congress has spent 158 days considering the Obama health plan without ever laying eyes on a complete cost estimate.
The House passed its version without one. And the Senate has begun floor consideration without one. (Shouldn’t these eight Democratic-caucusing senators be upset about that?)
(Cross-posted at National Journal’s Health Care Experts Blog.)
A Special Kind of Eminent Domain Abuse
In federal eminent domain cases, the “scope of the project” rule requires that in determining “just compensation” under the Fifth Amendment’s Takings Clause, any increase or decrease in property value caused by the federal project be disregarded. As it turns out, the federal government had discussed the idea of expanding Everglades National Park for over 30 years, and also induced the local government to enact tougher zoning standards that decreased the value of the property that was to be taken for this purpose. This type of behavior is a special kind of eminent domain abuse called “condemnation blight.”
The Everglades-related federal actions forced Gilbert Fornatora to watch the value of his South Florida property decline until the federal government finally condemned it — and paid him much lower compensation than he would otherwise have received. Then, once condemnation proceedings began, the government manipulated the hearing schedule by front-loading ill-prepared owners who lacked counsel, thereby setting a low valuation precedent that would then be applied to the later parties with representation, like Fornatora. The Eleventh Circuit sided with the government, so Fornatora petitioned the Supreme Court to review the case.
Cato filed an amicus brief supporting this petition, arguing that property owners have virtually no “scope of the project” protection if they must prove that the government’s sole or primary purpose for pre-condemnation action was to depress property values for later eminent domain proceedings. A more workable test, consistent with due process, is merely to require evidence of a nexus between the government’s actions and the depressed property value. The Court should also hear this case to ensure that just compensation proceedings comport with the due process, equal protection, and general fairness standards the government is required to follow in a variety of other settings.
The Court will be deciding early in the new year whether to hear the case, which has the ungainly name of 480.00 Acres of Land v. United States.
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Higher Immigration, Lower Crime
Posted by Daniel Griswold
Yes, you read that right. The story is more complicated than a short headline can covey, but that is the gist of an article of mine in the just-out December issue of Commentary magazine. [Subscription needed.]
The past 15 years have witnessed two undeniable trends: dramatically rising levels of immigration, both low-skilled and high-skilled, and an equally dramatic plunge in crime rates nationally. I don’t argue that increased immigration in the past 15 years is the primary cause of falling crime rates, but I do argue that the evidence punches a gaping hole in the Lou-Dobbs contention that immigrants have clogged our prisons and unleashed a new wave of crime.
In the Commentary article, and in an earlier Cato Free Trade Bulletin, I cite Census data that show that incarceration rates for immigrants are significantly lower than for native-born Americans. The contrast is especially sharp between immigrants without a high-school diploma and their native-born counterparts. Along with their lower propensity to commit crimes, immigrants are also more likely to be employed than similarly educated Americans.
Or as the subhead of the magazine article nicely puts it, “Today’s ‘underclass’ of newcomers seeks a day’s work, not a drug deal.”
Filed under: Trade and Immigration
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