Archive for February, 2010
The Pentagon Shouldn’t Get a Pass
Today’s Politico includes an op ed that I co-authored with Heather Hurlburt of the National Security Network. It was the first time that the two of us collaborated, and I was very pleased with the end result. Most of the clever turns of phrase are Heather’s including the title, “The Wrong Manhood Test.” And I’m grateful to Harrison Moar and Charles Zakaib for helping me on Monday to sift through the gargantuan defense budget, and pull out the relevant facts.
Heather and I don’t agree on everything. We faced off at Bloggingheads.tv several months ago to discuss my book, The Power Problem, and I’m sure that we’ll continue to spar from time to time in the future. But the bottom line from the op ed is this:
…because our national security rests on our economic health as well as on the strength of our military, a liberal and a libertarian can agree that the Pentagon should no longer get a pass. Congress must stop funding projects to satisfy parochial domestic interests. The Pentagon must stop buying weapons systems that are already outdated, unworkable or both. And the administration must carefully define our vital security interests, reshape our grand strategy to more equitably distribute the burdens of policing the globe and reduce the occasions when our military will be called on to fight.
There is more than enough blame to go around. Congress is already girding for battle over some pet projects singled out for elimination or cut backs, including the C-17 transport and the additional engine for the F-35 Joint Strike Fighter. The Pentagon continues to plan for contingency operations around the world, and assumes that the U.S. security umbrella will remain open over Europe and East Asia for the indefinite future. And the White House has signaled (they have yet to formally produce a national security strategy) that while it would like the allies to help out, it doesn’t want them to get too capable. (See, most recently, Secretary Clinton’s remarks re: European defense.)
The governing assumption, therefore, is that, as the just-released QDR explains,
America’s interests and role in the world require armed forces with unmatched capabilities and a willingness on the part of the nation to employ them in defense of our interests and the common good.
The time for finger pointing over the Pentagon’s budget is over. If we can’t address the obvious inefficiencies and waste in military procurement, then when can we? If we can’t today envision a time in the future when other countries will play a larger role in their own defense, then will we ever? “If the Department of Defense can’t figure out a way to defend the United States on a budget of more than half a trillion dollars a year,” in Bob Gates’s immortal words, “then our problems are much bigger than anything that can be cured by buying a few more ships and planes.” (h/t Justin Logan)
Amen to that. So let’s stop defining our security by the number of ships and planes that we buy, and start thinking about ways to responsibly contain, and ultimately bring down, military spending.
Socialists Shouldn’t Have to Admit Libertarians Into Their Club
Hastings College of the Law, a public law school in California, has a policy prohibiting discrimination on the basis of “race, color, religion, national origin, ancestry, disabilities, age, sex or sexual orientation.” In 2004, the Christian Legal Society, a religious student organization at the school, applied to become a “recognized student organization” — a designation that would have allowed CLS to receive a variety of benefits afforded to about 60 other Hastings groups. While all are welcome to attend CLS meetings, CLS’s charter requires that its officers and voting members abide by key tenets of the Christian faith and comport themselves in ways consistent with its fundamental mission, which includes a prohibition on “unrepentant” sexual conduct outside of marriage between one man and one woman.
Hastings denied CLS registration on the asserted ground that this charter conflicts with the school’s nondiscrimination policy. CLS sued Hastings, asking for no different treatment than is given to any registered student group. The district court granted Hastings summary judgment and the Ninth Circuit affirmed. The Supreme Court granted certiorari to determine whether Hastings’s refusal to grant CLS access to student organization benefits amounted to viewpoint discrimination, which is impermissible under the First Amendment.
Yesterday Cato filed an amicus brief supporting CLS — authored by preeminent legal scholar Richard Epstein – in which we argue that CLS’s right to intimate and expressive association trump any purported state interest in enforcing a school nondiscrimination policy. While Hastings may impose reasonable restrictions on access to limited public forums, it should not be allowed to admit speakers with one point of view while excluding speakers who hold different views. Our brief also discredits Hastings’s assertion that its ability to exclude the public at large from school premises renders their content-based speech restrictions constitutional.
We urge the Court to safeguard public university students’ right to form groups – which by definition exclude people – free from government interference or censorship. (Of course, our first choice would be for the government to get out of the university business and our second choice would be to stop forcing taxpayers to pay for student clubs, but given those two realities — as in the case at hand – freedom of association is the way to go.)
My Constitutional Romance
You’ve seen Hayek and Keynes battle rapping. Now, our Emo Founding Fathers:
Criminalizing Politics
Steve Poizner, the California insurance commissioner who is seeking the Republican nomination for governor, created a stir this week by charging opponent Meg Whitman’s campaign with attempting to coerce him out of the race. He said he had reported her campaign to state and federal law enforcement authorities.
What did Whitman actually do? Well, Poizner said that Whitman consultant Mike Murphy had contacted a Poizner staffer by phone and email to urge him to withdraw from the race. The email, released by Poizner, said: “I hate the idea of each of us spending $20 million beating on the other in the primary, only to have a badly damaged nominee. And we can spend $40 million tearing up Steve if we must; bad for him, bad for us, and a crazy waste to tear up a guy with great future statewide potential.” In the email, Murphy went on to suggest that if Poizner dropped out of the race before the June 8 vote, Whitman and her team would immediately get behind him for a 2012 challenge to Sen. Dianne Feinstein.
Poizner says that’s not only “strong-arm tactics” but possibly an illegal inducement to get him to withdraw. But isn’t this really just politics as usual? Don’t candidates as a matter of course say “support me this time, and I’ll support you next time” or “run for a different office and I’ll endorse you”? Presidential candidates, or their campaign managers, are often said to have promised the vice presidency to more than one rival to clear the field.
The point about spending $40 million of Republican money tearing up fellow Republicans is a pretty common complaint about party primaries. In fact, National Review correspondent John J. Miller raised just that concern about the Rick Perry-Kay Bailey Hutchison showdown in Texas.
Even during the Rod Blagojevich flap over “selling” a Senate seat, the always-provocative Jack Shafer and Jim Harper both asked, Isn’t this what politicians do? They make deals — including deals like “I’ll support your campaign if you’ll make my buddy (or me) a Cabinet secretary.” No doubt the promises are often worthless, but they still get made. Blagojevich and Murphy have reminded pols all over the country that such deals are better made in person, not via email or telephone.
Politics ain’t beanbag, Mr. Poizner. Accept the deal or reject it. But “let’s clear the field and spend our money fighting the other party” is pretty standard politics. And a darn sight better than another standard political practice, using the taxpayers’ money to bribe the voters to support you.
‘Father of HSAs’ John Goodman Plays Host to ‘Father of the Individual Mandate’ Mitt Romney
"Father of the Individual Mandate" Mitt Romney
The former nickname came from National Journal or The Wall Street Journal, I’m not sure which. The latter nickname comes from Institute for Health Freedom president Sue Blevins.
See here for details on an upcoming event in Dallas where Goodman’s National Center for Policy Analysis will play host to Romney.
It should be an interesting event. With all 40 Republican members of the U.S. Senate, including moderates like Sen. Olympia Snowe (R-ME), voting to declare an individual mandate unconstitutional…with 35 states moving legislation to block an individual mandate…with the Heritage Foundation rebuking an individual mandate…and with Virginia’s Democratically controlled Senate approving legislation to block an individual mandate…well, Romney may have a tough road to hoe with the conservatives who typically attend NPCA events.
Fed Governor Starting to Make Sense
Despite still defending the Fed’s bailouts, Fed Governor Kevin Warsh gave a speech this morning offering a few insights about reforming our financial system that seem to be lost on both Obama and Bernanke.
A few highlights:
The mortgage finance system is owed far stricter scrutiny to gather a fuller appreciation of the causes of the crisis. The government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, for example, were given license and direction to take excessive risks.
One has to hope that both Bernanke and Obama are listening. The silence of the Obama administration on fixing Fannie and Freddie is nothing short of shocking and irresponsible. Any commitment to real reform has to include the GSEs.
Granting new powers to resolve failing firms in the discretionary hands of regulators is unlikely, in the near-term, to drive the market discipline required to avoid the recurrence of financial crises.
…Some newly-empowered and untested regulatory structure is not likely — in and of itself — to be sufficient to tackle institutions that are too-big-to-fail, particularly as memories of the crisis fade. Regulation is too important to be left to regulators alone.
I believe these two points cannot be stated more strongly: what we need is more market discipline, rather than less. Putting the entire weight of our financial system on the backs of our financial regulators is a crisis just waiting to happen. Sadly the direction of both President Obama and Congress seems to be in undermining market monitoring of firms and relying solely on regulators to “get it right” – the very same regulators who were asleep at the wheel prior to the last crisis.
Wednesday Links
- David Boaz debates at The Economist: Is Obama failing? “In many ways, Obama has just doubled down on George W. Bush’s policies of bailouts, takeovers, expanded Fed powers and nationalizations. In a recession he is adding debt, taxes and regulation to the burdens already felt by business.” Readers can vote and join the debate.
- Ever wonder why weather forecasters can get things so wrong?
- Looking for a primer on the causes of the financial crisis? The new Cato Policy Report has answers.
- Podcast: “Citizens United and SpeechNow.org” featuring Steve Simpson of the Institute of Justice.
Liberty, Even for People You Don’t Like
In a conversation about “Don’t Ask, Don’t Tell,” Peter Sprigg of the Family Research Council admitted that he wants to re-criminalize sodomy:
…which is easy for him to say, of course, because he’s unlikely to be affected by the law. As someone who is likely to be affected by the law, I’m tempted to criminalize Peter Sprigg. Liberty is never more negotiable than when it’s liberty for someone you don’t like.
What is it that I don’t like? I don’t like putting people in cages. Whenever we can reasonably avoid it, we should. Liberty means liberty even for people we think are weird, or disgusting, or immoral — provided that they do not hurt us or our own legitimate interests. Lawrence v. Texas, for which the Cato Institute filed an amicus brief, is one of the most important expressions of this idea in our time.
Once liberty applies only to the things that we like, we have abandoned the true idea of liberty entirely. From that point on, you and I, as enforcers, must cling ever more tightly to arbitrary power. If we don’t, then someone else may come along, take that power, and criminalize us. A free society leaves the misfits alone, because sooner or later, everyone is a misfit, in some way or another.
Charters No Substitute for Private Innovation
I wrote about this private school in South Carolina last year. The Voice for School Choice has a new video highlighting the great work of the Eagle Military Academy, which works with many kids the public schools cannot or will not educate.
There’s a lot of talk lately about the transformative power of some charter schools, and it’s easy to lose sight of the fact that many secular and religious private schools have been saving kids all along with no public funds and little or no recognition from the elite opinion class.
We need to open up choice to these schools as well, not just public charter schools that cannot provide the breadth and depth of experiences offered by private schools.
Public charter schools are no substitute for full school choice through education tax credits.
Obama Small Business Lending Fund Likely A Bust
President Obama has announced his intention to use $30 billion in TARP funds to create a new small business lending fund. In all likelihood, this is $30 billion the taxpayers will never see returned.
First of all, the problem facing small business, outside of the massive uncertainty being created by Washington, is one of credit availability, not cost. For those who can get credit, its quite cheap, arguably too cheap. So if the president doesn’t intend to lower the cost of credit, the plan must be to lower the quality; using the $30 billion to cover expected credit losses. Of course, we tried throwing lots of taxpayer money at unsustainable homeownership, is there any reason to believe throwing taxpayer money at unsustainable businesses is going to work any better?
Using TARP funds for this program is also somewhat disingenuous. This program adds $30 billion to the deficit regardless of whether it’s funded by TARP or by Congressional appropriations. Taking from the TARP only allows the President to keep treating the TARP as his personal slush fund. Nowhere in the TARP legislation can you find language authorizing the use of funds to cover credit losses on new loans. Being a constitutional scholar, the President should know very well that the spending power rests with Congress, not the President. If we are to have a new small business lending program, it should be designed and funded by Congress, not bureaucrats at the Treasury Department.
Historically the two main sources of small business start-up funding have been home equity and credit cards. Clearly the availability of home equity has declined. Sadly as well, with the passing of credit card “reform” the availability of credit card lending has also declined. If the President truly wants to help small business, then the first thing to do is ask Congress to repeal the credit card bill and then just get out of the way.
Look Who’s Talking Now
Today Politico Arena asks:
Should officials be talking about the Christmas-day bomber talking and what does it prove?
My response:
Amid growing bipartisan criticism of the Obama administration’s handling of the Christmas Day bombing, the Manhattan KSM trial, and much else in its approach to terrorism, it’s pretty clear that the White House put out the news last evening that Abdulmutallab is now talking simply to quiet that criticism. After all, that’s a story only because Abdulmutallab had not been talking. And why wasn’t he talking? Because shortly after he was arrested and briefly questioned by agents with no terrorism-related expertise, he was Mirandized and lawyered up, like any common criminal — consistent with the Obama administration’s law-enforcement approach to terrorism. And so he clammed up — and we were now put in the unseemly position of having to bargain with him to get intelligence. If this issue were not so serious, you’d have to call the Obama-Holder operation the Keystone Cops.
Why the Slow Recovery?
“Wealthy Face Higher Taxes.” That’s the headline that greeted two million American businesspeople Tuesday when they opened their Wall Street Journals. Inside, another banner head: “Big Firms Would Face Deeper Tax Bite.” Turn to the New York Times: “A Red-Ink Decade/Obama Budget Sees Years of Deficits.” The Financial Times: “Obama to target overseas tax breaks.” Investor’s Business Daily: “Higher Taxes for All in Obama Budget, $1.6 Tril 2010 Deficit.” And the Washington Post (not that many productive people get that on their doorstep): “Obama budget would spend billions more.”
And President Obama wonders why banks aren’t lending, employers aren’t hiring, and investors are holding back? As the Economic Policy Institute illustrates, this is the slowest recovery of any postwar recession.
![[chart: Current downturn is far worse than any other in post-War period]](http://www.epi.org/page/-/img/20100127_snapshot_580.jpg)
Let’s hope the Obama administration soon learns that higher taxes, more regulation, a larger share of GDP shifted to government, fears of Fed monetization of soaring debt — not to mention newspaper reports of Obama budgeteers “flipp[ing] through the tax code, looking for ideas” — can only discourage employers, investors, and entrepreneurs. Robert Higgs has cited the role of “regime uncertainty” in prolonging the Great Depression, as investors worried about what FDR might do next. Will Wilkinson points to Treasury Secretary Tim Geithner’s saying “businesses want certainty. They need certainty so they can make long-term plans today.” Unfortunately, Will says, “Creating completely irresponsible, economically chilling regime uncertainty would appear to be the basic modus operandi of the Obama administration.”
Taxes, regulation, and uncertainty — and Obama asks why businesses aren’t lending, investing, and hiring.
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