Archive for December, 2009
Bill of Rights Day
Since today is Bill of Rights Day, it seems like an appropriate time to pause and consider the condition of the safeguards set forth in our fundamental legal charter.
Let’s consider each amendment in turn.
The First Amendment says that Congress “shall make no law … abridging the freedom of speech.” Government officials, however, insist that they can make it a crime to mention the name of a political candidate in an ad in the weeks preceding an election. They also insist upon gag orders in thousands of federal investigations.
The Second Amendment says the people have the right “to keep and bear arms.” Government officials, however, insist that they can make it a crime to keep and bear arms.
The Third Amendment says soldiers may not be quartered in our homes without the consent of the owners. This safeguard is doing so well that we can pause here for a laugh.
The Fourth Amendment says the people have the right to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures. Government officials, however, insist that they can storm into homes in the middle of the night after giving residents a few seconds to answer their “knock” on the door.
The Fifth Amendment says that private property shall not be taken “for a public use without just compensation.” Government officials, however, insist that they can take away our property and give it to others who covet it.
FAA Says Wasteful Spending ‘All Good’
It’s not uncommon to hear the claim made that the “stimulus” would have had a greater economic impact had the money been focused on infrastructure. But proponents of public “investment” in infrastructure seem to forget that the government allocates capital on the basis of politics rather than economics. Government is naturally inefficient because it is immune to the market signals that guide private actors who stand to lose their own money should an investment not pan out.
A perfect example is federal spending on airport infrastructure. The USA Today’s Thomas Frank has been doing good work looking at how the Federal Aviation Administration distributes funds to the nation’s airports. In his latest piece, Frank analyzed FAA records obtained under the Freedom of Information Act and found that taxpayer money is being put to questionable use:
Airports have spent $3.5 billion in federal money since 1998 on projects the Federal Aviation Administration rated as low priority because they do little to improve the most pressing needs in the nation’s aviation system…The money comes from a program that is supposed to improve aviation safety…But the program also has funded terminals at little-used airports, hangars to store private jets, and parking areas that are free to customers.
For example, Frank reports on Pellston Regional Airport in Michigan, which “used $7.5 million in federal funds to build a terminal with stone fireplaces and cathedral ceilings. The airport averages three departures a day.”
But the FAA sees it differently:
‘They’re all good projects,’ said Catherine Lang, FAA acting associate administrator for airports.
C@L readers who get stuck in congested airports this holiday season may wish to keep that quote in mind.
In a sister piece, Frank quotes Lang as saying that the terminals at these airports are “crumbling, loaded with asbestos and have no other source [of money].” If airport infrastructure in this country is truly crumbling, then why is the FAA expending scarce resources on stone fireplaces?
Frank cites more examples:
- Lake Cumberland Regional Airport in Kentucky got $3.5 million to build a glass-fronted terminal in 2004 that was largely unused until the first passenger flights began this June. The airport now has six flights a week.
- Montgomery Regional Airport in Alabama got $22 million to build a $35 million terminal with a sloping glass facade and a rotunda topped with a domed ceiling that reflects the historical architecture of the state Capitol.
- Halliburton Field Airport in Duncan, Okla., got $700,000 for a terminal with a pilot room and a reception room. The airport, open only to private planes, has 24 landings and takeoffs a day, mostly local pilots in piston-engine planes.
We should be looking to privatize infrastructure as this Cato op-ed states:
First, privatization would reduce the responsibilities of the government so that policymakers could better focus on their core responsibilities, such as national security. Second, there is vast foreign privatization experience that could be drawn upon in pursuing U.S. reforms. Third, privatization would spur economic growth by opening new markets to entrepreneurs.
I suppose the drawback would be that politicians would be denied the fun of spending other people’s money, not to mention the campaign contributions.
Conrad: Just Don’t Cut My Programs!
Prompted by my blog on Senator Kent Conrad’s Task Force to reduce the federal deficit, my assistant Amy Mandler dug up some interesting information on the good senator.
Conrad has nurtured his image as a “deficit hawk” for decades, but when it comes to subsidies for millionaire farmers he demands that the federal gravy keep flowing.
Earlier this year, for example, President Obama proposed cutting one type of farm subsidy (“direct payments”) for farmers earning over $500,000 a year. I suspect that about 95 percent of Americans would support that tiny nod toward fiscal sanity and deficit reduction. But not Senator Conrad, who helped shoot the proposal down. See here and here.
Hell Freezes Over (Or At Least Gets Cooler)
Well here’s an interesting, if three-weeks-old, story. Apparently the North Dakota Farm Bureau’s annual convention recently passed a policy calling for the elimination of all agricultural programs. Reading between the lines of the original press release indicates that the call was part of a broad political position by the NDFB to move away from government intervention in many areas of the economy apart from farm programs, including cap-and-trade and health care:
“As people in this country expect more from the government and less from themselves, our delegates are urging everyone, including farmers, to step away from the public trough and get back to the principles of individual responsibility and initiative,” said NDFB President Eric Aasmundstad….
The only way government can get money is to take it from its citizens. We don’t believe raising taxes to pay for health care or climate change will help our country get out of our economic slump or even improve health care or the environment. And the more they take, the less we have to find the innovative solutions to the problems we face.
He sounds like a Catoite.
To what extent the NDFB’s position flows through to the rest of the farm lobby remains to be seen, so hell hasn’t quite frozen over yet. But this is positive news. At the very least it spells sweet, sweet trouble for long-time free trade nemesis and farm bill supporter Sen. Byron Dorgan (D), who is up for reelection next year.
HT: Chris Edwards.
Yglesias, Defending Klein’s Slander of Lieberman
Blogger Matthew Yglesias has a response to my post on Ezra Klein’s slander that Sen. Joe Lieberman (I-CT) is okay with the mass murder (or the mass negligent homicide) of hundreds of thousands of uninsured Americans.
Yglesias claims that only one of the three studies I cited speaks to what he claims is the central point: the Institute of Medicine’s estimate of how many Americans die each year because they lack health insurance. Yglesias is incorrect. The central point/threshold question is whether giving the uninsured health insurance will save lives. All three studies speak to that point, and all three all cast doubt on the intuitively appealing idea that giving uninsured people health insurance ipso facto saves lives.
To rebut the one study that Yglesias believes to be on point (Kronick), he offers two others. Yet all studies are not created equal. Kronick, Finkelstein/McKnight, and Levy/Meltzer represent the most reliable work that has been done on the relationship between health insurance and health. If I am wrong about that, I hope that one of those authors or another expert in the field will correct me.
But if I am right, it means that Yglesias and Klein are slandering Joe Lieberman and millions of others based on their (Yglesias’ and Klein’s) limited and distorted understanding of the world. (And even if I’m wrong, the Washington Post‘s Charles Lane explains why Klein’s slander is still wrong.)
Then again, considering that Yglesias also has another post suggesting that Lieberman and House Minority Whip Eric Cantor (R-Va.) are “dumb” Jews free-riding on the intelligence of other Jews, I’m not sure that the Church of Universal Coverage is open to persuasion right now.
Great Moments in Bureaucracy
The picture below, taken from a story in The Economist, shows that France, Germany, and Italy are among the nations with the most central bank employees (as a share of the population). In some sense, this is a dog-bites-man factoid. After all, is anyone surprised that Europe’s major welfare states have bloated public payrolls? But there’s more to this story. All three of these central banks ceased to have a monetary policy, starting back in 2002, when their nations adopted the euro. The mission is gone, but the bureaucracy lives on.
To be fair, the bureaucrats in these nations presumably are not sitting in quiet rooms playing minesweeper. Perhaps these central banks are responsible for other functions, such as financial regulation. Of course, given how governments around the world pursued policies that led to a financial crisis, perhaps all of us would be better off if bureaucrats did play computer games all day.
ObamaCare Cost-Estimate Watch: Day #178
It has been 178 days since Democrats introduced the first version of President Obama’s health plan, and a growing chorus of voices is demanding that the Congressional Budget Office reveal the full cost of Sen. Harry Reid’s health care legislation — including the cost of the private-sector mandates.
- Philadelphia Inquirer columnist Kevin Ferris writes: “Have the CBO score the entire Senate bill — both on-budget expenses and off. Let senators and taxpayers see the real cost – before a vote is taken. Then decide what the nation can afford.”
- Former New Jersey Governor and EPA administrator Christie Whitman — who should know a little something about private-sector mandates — writes: “the CBO estimates do not count the costs the private sector will have to pay to insurance companies as ‘taxes,’ even though they are surely costs for the system…I believe we need health care reform in this country. But we should start with honest accounting, responsible fiscal policies for the sake of our grandchildren, and a recognition of who is really going to shoulder the burden of this undertaking. Anything less is just more of the same.”
I also had an oped in Sunday’s Richmond Times-Dispatch where I argue that if Sen. Jim Webb (D-Va.) really meant what he wrote to Majority Leader Harry Reid back in October about holding an open and honest debate, Webb should insist on a complete CBO cost estimate — including the cost of the private-sector mandates — before the bill moves any further.
(Cross-posted at National Journal’s Health Care Experts Blog.)
Joe Lieberman, Mass Murderer?
So insinuates the Washington Post‘s Ezra Klein, who writes that, because Sen. Joe Lieberman (I-CT) does not support the health care legislation forwarded by Senate Democrats, Lieberman “seems willing to cause the deaths of hundreds of thousands of people in order to settle an old electoral score.”
In a subsequent post, Klein relies on the Institute of Medicine’s methodology — which has been used to estimate that 22,000 Americans die each year from lack of insurance — to conclude that the Senate bill would save 150,000 lives over 10 years. He further claims that “Medicare saved lives.” (In fairness, Klein writes that he’s not accusing opponents of murder. When he writes of Lieberman’s willingness to cause hundreds of thousands of deaths, maybe he’s thinking of mass negligent homicide. Or something.)
On Twitter, Klein writes, “People are oddly resistant to talking about the impact of [health care reform] on lives. Do they think insurance has no connection to mortality?”
Indeed, health insurance does have a connection to mortality. But I’m pretty sure Klein doesn’t know what it is, mostly because people with more expertise and fewer axes to grind don’t know what it is.
Spending Dissimulation
I was going to call this blog “spending hypocrisy,” but I really needed a stronger word. Maybe ”spending dissimulation” or ”spending deceit”?
Last Wednesday, Senators Kent Conrad (D-ND) and Judd Gregg (R-NH) introduced legislation for a Bipartisan Fiscal Task Force “to address the nation’s long-term budget crisis.” Conrad said “now is the time to act,” and Gregg said:
Congress feels entitled to spend with a blank check and little regard for the future of our economic stability . . . we are swimming in a sea of red ink that will drown any chance our children have for prosperity or even a decent standard of living. It is no longer enough for Congress to simply talk about reform; it is time for action and leadership.
It sounds convincing and 27 senators signed on to the effort to tackle the government’s skyrocketing debt problem. But that was last week, which was so long ago.
Yesterday, the Senate passed a massive $1.1 trillion pork-filled spending bill. The bill funds most domestic agencies for the rest of the current fiscal year, and includes an average 10-percent spending increase for the activities funded.
Voting for a 10-percent increase in the face of this year’s $1.5 trillion deficit is exactly the sort of extreme irresponsibility that supporters of the Conrad/Gregg Task Force want to counteract, right?
Then why did the following nine senators co-sponsor the Task Force and then go ahead and vote in favor of the massive spending increase yesterday?
Senator Michael Bennet (D-CO)
Kent Conrad (D-ND)
Senator Amy Klobuchar (D-MN)
Senator Joseph Lieberman (D-CT)
Senator Ben Nelson (D-NE)
Senator Bill Nelson (D-FL)
Senator Jeanne Shaheen (D-NH)
Senator Mark Udall (D-CO)
Senator Mark Warner (D-VA)
Didn’t they think that their votes were recorded? And do they really expect us to believe that they are sincere in controlling the budget?
It’s PATRIOTic to Panic!
According to Politics Daily columnist Patricia Murphy vital provisions of the PATRIOT Act are in danger of expiring! Which means that scary terrorists could already be hiding under your bed ZOMG!!!1!!1!
Let’s take a slow deep breath or two, shall we? As I’ve been discussing here for some time, there are three national security surveillance provisions due to sunset at the end of this year. It has also been clear for weeks now that, with health care taking center stage, Congress was unlikely to come to an agreement on the details of reform and reauthorization before recess. And while Politics Daily may have just “learned Thursday” that congressional advocates for civil liberties reforms would be comfortable with a temporary renewal of the expiring provisions to allow more extended debate, anyone who’s been paying the slightest bit of attention has heard them say as much all along. Which, given the tenor of press coverage, is a good thing: The easiest thing to do would be a straight reauthorization that avoided much-needed changes and took an issue that tends to make Democrats skittish off the table. But the chance that legislators will simply allow the expiring provisions to lapse is, to a first approximation, zero. The brevet renewal will probably be dropped into the Defense Appropriations Bill before Congress this week.
Since the article dwells at some length on the Fort Hood shootings and the risk of homegrown terrorism, it’s worth reiterating: The never-invoked “Lone Wolf” provision, which is among those expiring, does not apply to actual “homegrown terrorists”—that is, permanent residents or citizens like Nidal Hassan. Those people can still be surveilled using ordinary Title III criminal wiretap warrants. Nor, despite what the article claims, would law enforcement “lose the ability” to conduct roving wiretaps or demand business records even if Congress somehow failed to pass a reauthorization. Roving taps would remain available under the criminal statute, though under a slightly heightened standard—which, again, is what you’d have to use anyway to go after a genuine homegrown terrorist who wasn’t a member of a foreign group like al-Qaeda. Ordinary FISA wiretaps, requiring investigators to specify the phone lines and Internet accounts covered, would still be available. (These represent the overwhelming majority of the thousands of FISA warrants issued each year.) The “business records” provisions of the Foreign Intelligence Surveillance Act similarly predates PATRIOT, and would remain in existence for use against actual “agents of a foreign power,” though again, the standard for issuance would be raised. A plethora of other mechanisms for obtaining third party records—grand jury subpoenas, National Security Letters (issued without that pesky judicial oversight), court orders—would remain in place.
So, in sum: If by some unfathomable happenstance these few provisions were allowed to lapse for a few months while Congress hashed out the details of a renewal and reform bill, there’s no reason to think it would be an especially serious problem given the array of new tools we’ve made available to terror investigators over the past eight years. But even if you’re the nervous sort, the point is moot, because there is no realistic chance that the PATRIOT provisions in question will be allowed to lapse. There never has been: A temp extension has quite clearly been on the table all along. Though I suppose that’s not the kind of headline that drives clicks.
Volcker Unloads on Bankers
As reported in today’s Wall Street Journal, Paul Volcker, who is a former Fed Chairman and current adviser to President Obama, challenged bankers to produce a “shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy.” Yet some of these innovative financial products brought the economy to “the brink of disaster.” Profits in banking are being restored in part by playing financial brinkmanship once again.
How can this be? Volcker focuses in on public policies that back excessive risk taking by bankers. They and their stockholders garner the profits, but, through bailouts and government guarantees, manage to socialize the losses. That process is what economists call moral hazard.
He questions whether improved regulation can resolve the problems without serious structural change. He repeats his longstanding policy of separating traditional commercial banking from what has been aptly termed casino banking. Casino banks must not be protected by the government.
Here is my suggestion for a start. Hedge funds can serve a very useful function in the economy. But banks taking insured deposits should not be permitted to operate hedge funds in their institutions. Most proprietary trading by banks amounts to an in-house hedge fund. Separate the activity from banking.
Monday Links
- Supporters of the government health care overhaul pulling select quotes from research papers while hiding conclusions from the very same papers that hurt their political cause.
- Will the Senate health care bill pass in 2009? David Boaz: “It’s looking like a health care overhaul won’t pass this year. The basic problem is that the more people learn about the bill, the less they like it.”
- Religious persecution update: The State Department’s new list of the top 30 most egregious offenders.
- Strategies for dealing with North Korea’s nuclear reality.
- Podcast: “Perverse Incentives in Obamacare.”
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