Archive for December, 2009
Dan Gaby, RIP
Dan Gaby, a man I had the pleasure to know in his role as the Executive Director for E3 (New Jersey’s school choice organization Excellent Education for Everyone), passed away last week.
I didn’t know Dan well, but from the first we met when I was a grad student he was extremely generous with his time and knowledge, unfailingly kind and encouraging.
He and E3 have built a remarkably broad and bipartisan movement for school choice in an ossified and union-dominated state, and it is a shame that Dan won’t live to see this work completed. But he left the school choice movement in New Jersey on a solid foundation, with a governor who supports private school choice and great opportunity for change.
I’ll end with my condolences to Dan’s friends and family and this from Peter Denton and E3:
Dan was the best of us. He spent his great life tirelessly working to bring freedom and equality to the downtrodden, the lost, the disenfranchised. Truly he fought for those who had no advocate, and he did so proudly and unapologetically.
Dan gave the final years of his life fighting for the children of this state, and this nation. He believed that the fight for educational equality was a battle for the heart and soul of the Democratic party, and our country, which will not prosper or survive if so many of our children continue to suffer the wages of terrible schools.
Pampered European Bureaucrats Threaten Strike
There’s been a lot of attention given to overpaid government workers in America, as many people have documented, but the problem is global. Bureaucrats who work for the European Union get lavish pay and benefits, yet are threatening to strike because of a proposed pay freeze. These mandarins already pay reduced taxes, get a host of special allowances, and even have the gall to demand free travel on public transport. Interestingly, as this story for Euractiv.com indicates, they apparently realize they have privileged positions and are worried that the current controversy may spark some resentment from over-burdened taxpayers:
Staff at the European institutions are preparing to go on strike next week in a bitter pay dispute sparked by national governments’ decision to block a routine salary increase for EU civil servants. Civil service staff are due to receive a 3.7% pay hike… There is widespread acceptance that the pay rise is legally binding but other options are currently under consideration – much to the chagrin of unions. Diplomatic sources indicated it may be possible to proceed with the 3.7% pay rise, but to initiate a parallel move which would effectively negate the increase. This could include increasing the so-called ‘crisis levy’, which allows European civil servants to be taxed in exceptional circumstances. …Diplomats said some EU civil servants are concerned that the dispute could open a can of worms if the spotlight is turned on their generous pay and benefits, including the permanent repatriation allowance paid to civil servants – even if they have been in Brussels for 30 years.
Washington’s New Stinginess?
That’s the title of a column in the December issue of Governing authored by Donald Kettl, the dean of the School of Public Policy at the University of Maryland. According to Kettl, the federal government’s new “stinginess” is being directed toward state and local governments. Stinginess? Didn’t he hear about Obama’s $800 billion state bail-out/stimulus bill?
The following are some selected statements from Kettl that left me dumbfounded:
There was a time, of course, when state and local governments were big players in the interest-group scramble. But it was quite a while ago.
State and local government aren’t big players in the interest-group scramble? That certainly wasn’t my experience when I was in the Senate. According to Opensecrets.org, state and local government lobbying spending has quadrupled in the last ten years. Higher education lobbying is five times higher. And don’t forget the public sector unions. That’s just the spending. State and local politicians have the phone numbers of their federal brethren on speed dial.
To find an administration that was truly sympathetic to state and local pleas for cash, you have to go back to the Nixon era. In the early 1970s, state and local governments benefited financially from the sense that the federal government needed to keep them on course. Urban renewal and community development grants, along with a vast array of programs ranging from Medicaid to education, flowed down from Washington because of a sense that the states and cities couldn’t manage their burdens on their own. After that, though, money got tighter and federal attention to state and local issues began evaporating.
Medicaid, urban renewal, community development, and education money all started to flow in the 1960s, and the flow has turned into a torrent over the decades. Data from latest Analytical Perspectives by Office of Management and Budget demonstrates the upward trend:
Perhaps Kettl thinks Ronald Reagan is still the president? Reagan was the only recent president who actually oversaw a reduction in subsidies to the states, bless his heart.
Kettl says that “state and local governments have to confront the fact that the White House is now more interested in transparency and inclusion than in aiding their state and local partners.” This is a preposterous statement and President Obama’s own budget document makes it clear this is not true:
Federal grant outlays were $461.3 billion in 2008 and are estimated to be $567.8 billion in 2009 and $652.2 billion in 2010. These amounts include grant funding provided by P.L. 111–5, the American Recovery and Reinvestment Act of 2009 (Recovery Act). The $106.5 billion increase in grant outlays estimated for 2009, and the further $84.4 billion increase in 2010, stem largely from funding provided in the Recovery Act, along with increases in Medicaid spending apart from the increased funding provided in the Recovery Act.
I wish there was a new stinginess in Washington with regard to subsidizing state and local government. To understand why this is important, read this essay or this excellent policy analysis: “Federal Aid to the States: Historical Cause of Government Growth and Bureaucracy.”
Sunlight Before Signing Progress: Whitehouse.gov Encourages Public Comment
The White House’s web site, Whitehouse.gov, has begun posting the bills Congress sends down Pennsylvania Avenue so they can get a final public review. This actually began some time ago, but a link from the home page now directs visitors (and search engines) to the bills that await the president’s signature.
This is an important step toward fulfilling President Obama’s campaign promise to post the bills he receives from Congress online for five days before he signs them. I’ve written about it several times, most recently here.
Take a look for yourself: On the Whitehouse.gov home page, a link at the bottom of the “Featured Legislation” column says “Comment on Pending Legislation.”
Currently, four bills are listed there, arranged in order by the dates they were posted. The final language isn’t posted at the link, and it takes a little sophistication to find the final version at the linked-to page on the Thomas system, but this is substantial progress.
Kudos to the White House for moving toward full implementation of President Obama’s Sunlight Before Signing promise.
A Few Notes on Climate Change
As the Copenhagen Climate Conference is taking place, it is appropriate to clarify once again what is more or less accurately known about the climate of our planet and about climate change.
Obviously, a brief post can not substitute for detailed studies of professionals in a variety of scientific disciplines – climatology, atmospheric physics, chemistry, geology, astronomy, and economics. However, a short post can summarize basic theses on the main trends in climate evolution, on its forecasts, and on its actual and projected effects.
1. The Earth’s climate is constantly changing. The climate was changing in the past, is changing now and, obviously, will be changing in the future – as long as our planet exists.
2. Climatic changes are largely cyclical in nature. There are various time horizons of climatic cycles – from the annual cycle known to everyone to cycles of 65-70 years, of 1,300 years, or of 100,000 years (the so called Milankovitch cycles).
3. There is no fundamental disagreement among scientists, public figures and governments about the fact that the climate is changing. There is a broad consensus that climate changes occur constantly. The myth, created by climate alarmists, that their opponents deny climate change is sheer propaganda.
4. Current debate among climatologists, economists and public figures is not about the fact of climate change, but about other issues. In particular, disagreements exist on:
- Comparative levels of modern day temperatures (relative to the historically observed),
- The direction of climate change depending on the length of record,
- The extent of climate change,
- The rate of climate change,
- Causes of climate change,
- Forecasts of climate change,
- Consequences of climate change,
- The optimal strategy for human beings to respond to climate change.
5. Unbiased answers to many of these issues are critically dependent on a chosen time horizon – whether it is 10 years, or 30 years, or 70 years, or 1000 years, or 10,000 years, or hundreds of thousands or millions of years. Depending on the time horizon, the answers to many of these questions may be different, even opposite.
Weekend Links
- Health care insurance mandates: Why it is unconstitutional for the government to force you to purchase a product you don’t want to buy.
- Should malpractice reform be included in the pending health care bill?
- The end of globalization? Cato’s trade policy expert Daniel Griswold debates.
- Doug Bandow on the minaret ban in Switzerland: “Swiss voters underestimated the impact on religious liberty when they voted to ban minaret construction. But Muslims whose nations persecute Christians, Jews, and other religious minorities have no standing to complain. The Islamic world needs to respect religious liberty at home before lecturing the West about intolerance, racism, hatred and Islamophobia.”
- More debate over Hayek and spontaneous order at Cato Unbound.
- Podcast: “Obama’s nation-building in Afghanistan“
This Week in Government Failure
Over at Downsizing Government, we focused on the following issues this week:
- Remember what happened when the government decided the “underserved” needed access to “affordable” housing? Now it says the “underbanked” need access to more “affordable” credit. Uh-oh.
- Congressional logrolling — literally.
- President Obama plans to spend our way into more debt.
- Another day brings another example of federal health care fraud.
- “The government has become an elite island of overcompensated administrators immune from the competitive job realities of average families.”
Keeping Pandora’s Box Sealed
In today’s Washington Times, Ken Klukowski and Ken Blackwell co-authored an op-ed about McDonald v. Chicago and the Privileges or Immunities Clause titled, “A gun case or Pandora’s box?”
If that title sounds familiar, it should. Josh Blackman and I have co-authored a forthcoming article called “Opening Pandora’s Box? Privileges or Immunities, The Constitution in 2020, and Properly Incorporating the Second Amendment.“ As Josh put it in his reply to the Kens, “imitation is the most sincere form of flattery.”
Going beyond the title, there are several errors in the piece, which I will briefly recap:
First, the Kens argue that the Supreme Court should uphold the Slaughter-House Cases, out of a fear that reversal — and thereby a reinvigoration of Privileges or Immunities — would empower judges to strike down state and local laws. What they neglect to mention is that it has been the role of the judiciary since Marbury v. Madison to strike down laws that violate the Constitution. There is near-universal agreement across the political spectrum that Slaughter-House was wrongly decided, causing the Supreme Court to abdicate its constitutional duty by ignoring the Privileges or Immunities Clause for 125 years. The Kens want to continue this mistaken jurisprudence.
Next, the Kens describe the Privileges or Immunities Clause as a general license for courts to strike down any law they do not like. This is not accurate. Neither the Privileges or Immunities Clause nor any other part of the Fourteenth Amendment empowers judges to impose their policy views. Instead, “privileges or immunities” was a term of art in 1868 (the year the Fourteenth Amendment was ratified) referring to a specific set of common law, pre-existing rights, including the right to keep and bear arms. The Privileges or Immunities Clause is thus no more a blank check for judges to impose their will than the Due Process Clause — the exact vehicle the Kens would use to “incorporate” the Second Amendment.
To set the record straight, Josh and I are working on an op-ed — not so much to respond to the Kens’ flawed analysis but to present the correct historical and textual view of the Privileges or Immunities Clause. To see our arguments in greater detail, read our article and Cato’s McDonald brief, both of which I’ve previously blogged about here , here, and here.
It’s the Obama Economy Now
Undoubtedly President Obama inherited an economic mess. Also undoubtedly, he’s made it worse. Barring substantial revisions to recent job loss estimates, we have now crossed the line where as many jobs have been lost during this recession under President Obama as under President Bush. From the start of the recession, in December 2007, until President Obama took the oath of office at the end of January 2009, there have been 3.36 million nonfarm payroll jobs lost. From February 2009 until now there have been about 3.36 million nonfarm payroll jobs lost (estimates from ADP employment report).
Even during the best of times, the economy experiences substantial job loss. However, we consider those times good because the labor market is also creating lots of jobs, so that job losses are offset by job gains. The early parts of a recession are generally characterized by large increases in job losses, with minor declines in job creation. Eventually the job losses moderate and job creation picks up, bringing us out of the recession. We are arguably past the worst of the job losses. What has escaped us is job creation.
And it is on the job creation front that Obama takes ownership of the economy. While there are certainly problems in the credit markets, the major reason behind the lack of job creation is the massive uncertainty being generated by Washington. For any employer today, it is almost impossible to estimate what the future health care costs of new hires will be. It’s impossible to gauge what your environment costs are going to be. Same with the costs of the 90 new workplace rules that the Department of Labor promised would be forthcoming over the next year.
Sadly this administration learned the wrong lesson from the defeat of the Clinton health care plan. The history lesson they should have learned is that Clinton inherited a recession as well (as did Bush for that matter), but that job creation was weak until the Clinton health care plan stalled.
Until employers and investors feel it is safe once again to put their businesses and investments at risk, and Washington ends its war on the productive elements of our society, we will not have significant private sector job growth.
The Individual Mandate: Not a Tax, Except for When It Is
Along the lines of my oped with Bob Levy in today’s Philadelphia Inquirer explaining why an individual mandate is unconstitutional, here’s a poor, unsuccessful letter I submitted to the editor of the Washington Post:
To the Editor:
In one column, Ruth Marcus [“Health scare tactics,” Nov. 11] says it is “not true” that the House-passed health care overhaul “raises taxes for just about everyone.” The same column, however, explains that anyone who doesn’t comply with the bill’s mandate that everyone purchase health insurance, or the associated fines, “could, in theory, be prosecuted — just like others who cheat on their taxes” (emphasis added).
A subsequent column [“An ‘Illegal’ Mandate? No,” Nov. 26] notes, “The individual mandate is to be administered through the tax code,” and finds constitutional authorization for it in Congress’ power to tax.
Let me see if I have this straight. The Constitution’s taxing power authorizes it. The IRS would enforce it. If I don’t fork over what it demands, I face fines and jail time. But somehow, the individual mandate is not a tax.
Fortunately, there are much better ways to reform health care.
The Reid Individual Mandate: An Affront to the Constitution
Cato chairman Bob Levy and I have an oped in today’s Philadelphia Inquirer explaining why the individual mandate in Majority Leader Harry Reid’s (D-NV) health care bill is unconstitutional. (Our colleague Ilya Shapiro blogs about a similar piece by our colleague Randy Barnett.)
In sum, supporters of an individual mandate claim that two powers granted to Congress by the states in the Constitution — the Commerce Clause and the taxing power — give Congress the legal authority to force Americans to purchase health insurance. We reject both theories.
First, the behavior that Congress seeks to regulate — the non-purchase of health insurance — is neither interstate, nor is it commerce. Unfortunately, under the Supreme Court’s tortured interpretation of the Commerce Clause, that isn’t dispositive, so we explain why even the Court’s Commerce Clause jurisprudence doesn’t allow for an individual mandate.
Second, the individual mandate cannot be justified by pointing to Congress’s taxing power, because the tax it would impose is neither an excise tax, nor an income tax, nor a direct tax apportioned according to population.
Game over. All your base are belong to us.
We’ve already received many responses to the oped, some of them intelligent. One reader asks how we can describe the non-purchase of health insurance as “a non-act that harms no one”:
We all know that when folks without insurance go to the emergency room, those of us with insurance are harmed in the form of higher premiums.
Originally, we had included a section expanding on our “harms no one” claim that would have addressed this point, but we dropped it for brevity. Here it is:
Most uninsured people don’t end up in an emergency room. As for those who do, research shows that the uninsured as a group more than pay their own way. Many simply pay their bills without imposing costs on anyone. And because they typically pay premium prices for medical care — far more than is ordinarily reimbursed by public or private insurance — they more than offset the cost of uncompensated care to the uninsured overall, according to MIT economist Jonathan Gruber and others.
Even if we ignore that evidence, uncompensated care to the uninsured accounts for about 2.2 percent of national health expenditures. The left-leaning Urban Institute writes, “Private insurance premiums are at most 1.7 percent higher because of the shifting of the costs of the uninsured to private insurers in the form of higher charges.” That’s hardly a crisis.
And think about it: an uninsured person is wheeled into an emergency room, unconscious and bleeding. Is this person able to harm anyone? Is this person in a position to impose costs on you? Of course not.
What imposes costs on you are the laws that require the doctors and hospitals to treat those patients without regard to ability to pay — and the ethical codes that would impel doctors to treat them even if there were no such laws. If you have a problem with those laws/codes, make them the focus of your ire. If you support them, surely you can’t be upset that they increase your premiums by 1.7 percent. Isn’t that a small price to pay to live in a compassionate society?
But if you’re still angry about that 1.7 percent, bear in mind that the Reid individual mandate — which is essentially a bailout for private health insurance companies — would increase the cost of insurance for some people by 30 percent and would require additional taxes on top of that.
Fortunately, there are much better ways to reform health care.
Federal Salaries Explode
That’s the subject of a USA Today analysis, which reveals an outrageous increase in salaries at the top levels of the federal workforce. I’ve been complaining about excessive federal pay for some time based on one set of data, and now Dennis Cauchon provides strong support for my thesis using a different set of data.
Cauchon finds that since the economy fell into recession, the number of federal workers earning more than $150,000 has more than doubled. The federal government has become extremely bloated and top heavy, even as families and businesses across the nation have had to tighten their belts. With 383,000 workers earning six-figure salaries, the government has become an elite island of overcompensated administrators immune from the competitive job realities of average families.
There are a remarkable 22,000 federal civilians earning salaries of over $170,000, illustrating that Big Government works for the benefit of well-off insiders, not average Americans. And Cauchon only looks at salaries and wages. Average annual federal benefits are more than $41,000, which pushes total federal compensation even further ahead of the private sector average.
The Bush administration let federal pay and benefits grow completely out of control, as it did with other areas of federal spending. President Obama has an opportunity to fix these problems. He should call for a multi-year freeze on federal pay, work to overhaul a system that moves workers up the pay scales too rapidly, and begin purging the upper ranks of federal management.
Here are some of my recent analyses of federal pay:
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