Archive for March, 2010
Axelrod Is Shocked, Shocked to Find Corporate Money in Elections
White House senior advisor David Axelrod continued the administration’s campaign against the Supreme Court’s Citizens United decision on ABC’s This Week:
But thinking about Teddy Roosevelt, I wonder what he would think about a bill that essentially allows for a corporate takeover of our elections, or a court decision. And that’s what we’re dealing with here. Under the ruling of the Supreme Court, any lobbyist could go into any legislator and say, if you don’t vote our way on this bill, we’re going to run a million-dollar campaign against you in your district. And that is a threat to our democracy.
He was of course echoing and defending President Obama’s declaration in the State of the Union address:
With all due deference to separation of powers, last week, the Supreme Court reversed a century of law that I believe will open the floodgates for special interests, including foreign corporations, to spend without limit in our elections. I don’t think American elections should be bankrolled by America’s most powerful interests or, worse, by foreign entities. They should be decided by the American people.
Axelrod and Obama are horrified at the idea of corporate contributions to elections. Who can imagine the impact? It’s too horrifying to contemplate.
Except — it turns out that Axelrod and Obama don’t have to imagine a political system wracked by corporate contributions. They’re already intimately familiar with such an undemocratic system. Chicago Tribune columnist Steve Chapman points out:
But consider a state where corporations are already allowed to spend as much as they want on elections: Illinois.
That is, Obama and Axelrod spent their entire political careers in a state where corporations can make direct political contributions. Chapman isn’t impressed with the corporations’ impact:
Here, companies have established beyond doubt that this prerogative, when combined with $2.25, will get them a ride on the bus.
Illinois is something short of a corporate paradise. It ranks 30th among the states in its friendliness toward business. The Tax Foundation, which did the survey, complains of excessive sales, property and unemployment insurance taxes.
Illinois is one of a minority of states requiring employers to pay more than the federal minimum wage. It is notorious for heavy workers’ compensation costs. It puts no limits on the punitive damages a company can be assessed.
All this evidence should dispel the fear that future congressional debates will pit the senator from Exxon Mobil against her distinguished colleague from Bank of America. It turns out that where corporate expenditures are allowed, corporations a) don’t do much or b) don’t get much for what they do.
Whether or not that’s true, someone should ask Obama and Axelrod whether they accepted corporate contributions in Illinois, whether they fought to end that system, and whether they think democracy still exists in Illinois. But as far as I can tell, no one has, including ABC, NBC, and CNN, all of whom interviewed Axelrod this morning.
Keynesian Economics and the Wizard of Oz
When Dorothy and her friends finally reach Oz, they present themselves to the almighty Wizard, only to eventually discover that he is just an illusion maintained by a charlatan hiding behind a curtain. This seems eerily akin to to the state of Keynesian economics. It does not matter that Keynesianism isn’t working for Obama. It does not matter that it didn’t work for Bush, or for Japan in the 1990s, or for Hoover and Roosevelt in the 1930s. In the ultimate triumph of theory over reality, the Keynesians say all that matters is the macroeconomic model behind the curtain showing that more government spending leads to more jobs and growth. Consider the recent report from the Congressional Budget Office (CBO), which claimed that Obama’s stimulus created at least one million jobs. As Brian Riedl of the Heritage Foundation noted:
CBO’s calculations are not based on actually observing the economy’s recent performance. Rather, they used an economic model that was programmed to assume that stimulus spending automatically creates jobs — thus guaranteeing their result. …The problem here is obvious. Once CBO decided to assume that every dollar of government spending increased GDP…, its conclusion that the stimulus saved jobs was pre-ordained.
But surely this can’t be true, you may be thinking. Our public servants in Washington would not make important policy decisions based on a model that automatically produces a certain result, would they? Peter Suderman of Reason pulls aside the curtain:
[T]hose reports rely on assumption-packed models that effectively predetermine their outcomes; what they say, in essence, is that the stimulus worked because we assume it did. …That’s especially true when estimating government spending’s productive effects, which is accomplished by plugging numbers into a formula that assumes that government spending produces a multiplier—an increased return for every government dollar spent. In other words, it extrapolates from how much money is put in rather than from what has actually come out. And it does so using a formula that dictates that if money is put in, even more money will come out. According to the CBO’s estimates, depending on how the money is spent, one dollar of government spending can produce total economic activity of up to $2.50. What a deal! …[F]or all practical purposes, the same multipliers that were used to predict how many jobs would be created are being used to estimate how many jobs have been created.
Interestingly, CBO’s analysis is completely schizophrenic. Its short-run budget numbers are based on free-lunch Keynesianism that assumes deficit-financed government spending boosts growth, while its long-run numbers are driven by an assumption that government borrowing is terrible for growth (which is why CBO actually claims higher taxes boost economic output — see, for example, Figure 3 of this CBO analysis). It is impossible to know whether the people at CBO actually believe their own work, or whether they are simply trying to please their political paymasters by producing results that (conveniently) match up with political preferences for more spending today and higher taxes tomorrow. You can draw your own conclusions, but keep in mind that CBO is now making the absurd claim that a giant new healthcare entitlement will reduce budget deficits.
Europe’s Weakness: Feature or Bug?
The question at National Journal‘s Security Experts blog concerning NATO and the future of Europe has stimulated quite a spirited debate. I decided to take another bite at the apple.
Gordon Adams objects to the framing of the question, arguing that Europe is more important than ever because European governments have chosen to invest in civilians, not men and women at arms. In this context, Europe’s military weakness is a feature, not a bug.
Dan Serwer agrees, saying that the “Europeans are on to something,” that their civilian capabilities are vast, that they’ve been deployed in 22 different operations, and are involved in a dozen currently.
But even if they have such capabilities, all the soft power in the world isn’t worth much without some military power to back it up. In many of the places where nation building might be called for, various thugs, murderers and warlords use weapons to steal food aid, intimidate local officials, and kidnap wealthy foreigners. Such situations cry out for hard power: people who pry the weapons from the cold dead hands of the warlords, and convince the warlords’ followers to get onboard or else meet a similar fate. The aftermath of this dynamic, played out dozens of times in the past several decades, is what allows the guys in wingtips and the gals in sensible pumps to do development assistance, legal reform, institution building, etc.
In this respect, I agree with Messrs. Killebrew and Carafano. Hard power still matters. Unlike them, however, I would much prefer that locals be responsible for adjudicating these internal disputes, and, failing that, that others beside the U.S. military be capable and willing to deliver that hard power.
Weekend Links
- Andrew Coulson on national education standards: “The whole idea of imposing a single set of age-based standards on all students rests on a false premise: that children are identical widgets capable of being dragged along an instructional conveyor belt at the same pace, benefiting equally from the experience.”
- Question of the day: Would Obamacare end corruption—or expand it?
- Making things worse: How increasing the minimum wage will kill even more jobs for black teens, a group already facing 45 percent unemployment.
- The unintended consequences of a National ID card. (Now with support from both sides of the aisle.)
- Podcast: “Bad Statutes, New Crimes” featuring Marie Gryphon.
The Census Meets the Patriot Act
The Washington Post reports that the Justice Department recently sent out a letter to the chairs of the Asian Pacific, black, and Hispanic caucuses in Congress, reassuring them that the Patriot Act’s expansion of information-gathering powers, including the controversial Section 215, does not override federal statutes guaranteeing the confidentiality of census data. DOJ’s view, according to Assistant Attorney General Ronald Weich, is that “if Congress intended to override these protections, it would say so clearly and explicitly.”
Section 215, recall, is colloquially referred to as the “business records” provision of Patriot, though in fact it permits investigators to obtain “any tangible thing” from a designated person or entity by obtaining an order from the secret FISA court, subject only to a showing that the records sought are “relevant” to a national security investigation. As Weich observes, §215 does not contain the “notwithstanding any other law” language present in other parts of the Foreign Intelligence Surveillance Act, which means that it cannot be presumed on face to override other federal privacy statues establishing a higher degree of protection for specific categories of sensitive records.
What’s interesting to me, however, is that a similar issue arose several years ago, not with respect to the census confidentiality statute, but rather the Family Educational Rights and Privacy Act (aka FERPA, aka the Buckley Amendment). Initially, DOJ attorneys similarly opted not to seek education records under §215 on the grounds that the FISA court might conclude FERPA trumped Patriot in the absence of language giving §215 explicit priority, as the Office of the Inspector General’s initial report on the use of §215 explains. Nevertheless, the Counsel for Intelligence Policy told OIG that his office “would have been willing to present an application to the FISA court for educational records if the FBI considered the information important enough and wanted to press the issue with the FISA Court.”
Subsequent amendments to the statute alleviated those concerns:
According to [National Secrity Law Branch] and [Office of Intelligence Policy and Review] attorneys, this legal impediment to obtaining educational records has been addressed. Section 106(a)(2) of the Reauthorization Act amended FISA by ading 50 U.S.C. §1861(a)(3), which specifically addresses educational, medical, tax and other sensitive categories of business records. The amendment provided that when the FBI is requesting such items, the request must be personally approved by the FBI Director, the FBI Deputy Director, or the Executive Assistant Director for National Security. According to several NSLB and OPPR attorneys we interviewed, because this provision clarifies that educational records are obtainable through the use of a Section 215 order, the non-disclosure provisions of Section 215 apply rather than the notification provisions of the Buckley Amendment.
Ravitch-and-Hirsch-topia.
If you follow education news at all, over the last week or so — until the national-standards stories took over — you probably saw a lot about education historian Diane Ravitch’s supposedly sudden determination that school choice isn’t good after all. That’s one of the major selling points of her new book The Death and Life of the Great American School System, and just about every major newspaper has devoted a fair amount of ink to it.
Now I’ve devoted some ink — okay, pixels — to it, too. You can check out my review of Ravitch’s book on the brand-new School Reform News website. When you’re done with that, you can take a gander at my Cato Journal review of Core Knowledge guru E. D. Hirsch’s new offering, The Making of Americans. I think you’ll detect a unifying theme: Ravitch and Hirsch are excellent at their specialties — history and pedagogy, respectively — but they ignore just about everything they have lamented for decades about government schooling in order to proclaim that, um, we somehow need more government schooling.
Go figure!
This Week in Government Failure
Over at Downsizing Government, we focused on the following issues this week:
- Six reasons to downsize Washington.
- The chances of a taxpayer bailout for the FHA are probably larger than it wants to admit.
- The same people that say Fannie Mae and Freddie Mac shouldn’t be on the government’s books are often the same people who once dismissed concerns that the two companies were headed toward financial ruin.
- Here’s a shocker: the private sector does a better job of fighting fraud than the government.
- Bailing out state and local governments creates a disincentive for state and local policymakers to implement necessary reforms to get their budgets and future liabilities under control.
Gagging on SAFRA
With national curriculum standards now getting some real attention, I haven’t been able to give the plan to shove bankrupting student aid legislation down our thoats via health-care reconciliation the scourging it deserves. I will soon, but until then this “Water Cooler” piece from the Washington Times should slake your thirst. Here’s a choice quote:
Watching the Democrats create two massive pieces of rotten legislation by themselves is bad enough, but piling them together is like watching someone make an enormous Dagwood sandwich with mysterious fillings and make you eat the mile high concoction in one sitting.
Darn — acckkk! — right!
“A Full Range of Views”
It’s not often (especially these days) that a trade news item makes me laugh out loud. But, via an article in Inside U.S. Trade today, I saw a letter from United States Trade Representative Ron Kirk to Rep. Michael Michaud (D, ME) that did the trick.
Representative Michaud leads the House Trade Working Group, which is indeed working very diligently to stymie any hopes of meaningful trade liberalization. They wrote a letter in January to the USTR outlining their concerns about the upcoming Trans-Pacific Partnership negotiations. (I, too have concerns, but not the same ones as the HTWG.) Ambassador Kirk wrote back a fairly anodyne response that did not commit the administration to much of anything, except to follow up on the comments they have received from the Federal Register Notice.
Towards the end, though, came the punchline:
We are conducting follow-up meetings with these groups, including the AFL-CIO, the United Steelworkers, the Sierra Club, Oxfam, and Global Trade Watch, among others, to ensure we are hearing a full range of views on these issues. (My emphasis)
ObamaCare Sparks Democratic Revolt
In today’s Washington Post, Democratic pollsters Pat Caddell and Doug Schoen warn that ObamaCare will be a disaster for Democrats:
Nothing has been more disconcerting than to watch Democratic politicians and their media supporters deceive themselves into believing that the public favors the Democrats’ current health-care plan…
[A] solid majority of Americans opposes the massive health-reform plan. Four-fifths of those who oppose the plan strongly oppose it…while only half of those who support the plan do so strongly. Many more Americans believe the legislation will worsen their health care, cost them more personally and add significantly to the national deficit. Never in our experience as pollsters can we recall such self-deluding misconstruction of survey data…
By 51 percent to 39 percent, respondents feared the decisions of federal government more. This is astounding given the generally negative perception of insurance companies…
Health care is no longer a debate about the merits of specific initiatives…[but] about the government and a political majority that will neither hear nor heed the will of the people.
This oped reminds me of a Bruce Reed article on the differences between hacks and wonks:
Why ALL Age-Based Education Standards Are Bad
That’s the subject of my op-ed this morning over at Pajamas Media. Check it out, and discover who realized that education standards tied strictly to student age were a bad idea… 411 years ago.
Another State and Local Bailout?
Rep. George Miller (D-CA) has introduced a bill that would give state and local governments another $100 billion to prevent public sector job cuts. The bill was written at the behest of the U.S. Conference of Mayors and other local special interest groups addicted to federal largesse.
These days it’s hard to open a newspaper without reading a tug-at-the-heart-strings story about state and local officials having to make the “painful” decision to cut supposedly crucial government spending. Very rarely do journalists dig in deeply and examine in detail where state and local governments are actually spending their giant budgets.
Sometimes stories highlight some superficial waste, such as this Los Angeles Times story reporting that “As Los Angeles County supervisors prepare to carve deeply into everything from public safety to social services, they also are spending millions in taxpayer dollars to burnish their public images, pay for chauffeurs, hold parties for friends and lobbyists and support pet projects.”
The story assumes that every penny L.A. County spends on public safety and social services is a penny well spent. Like their federal counterparts, state and local programs are rife with waste, fraud, and excess. Unfortunately, for every 100 stories you read about teachers being furloughed, you might read one that questions the basic efficiency of the services being provided or possible private-sector alternatives.
In a new Cato Policy Analysis on the cost of public education, Adam Schaeffer found that the Los Angeles school district’s real per-pupil cost is $25,000 – not the $10,000 it reports. This compares to average Los Angeles private school per-pupil spending of $8,400.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
