Archive for May, 2010
GM Ads and the FTC: Fred Smith Responds
Last week in this space I criticized my friends at the Competitive Enterprise Institute for siccing the Federal Trade Commission on General Motors over its misleading “we repaid our bailout money” ads. Now CEI founder/president (and old friend) Fred Smith gives his side of the story in a lengthy response. And a new report from Fox News covers the whole controversy.
Jury Acquits Tonya Craft
A Georgia jury has acquitted Tonya Craft of 22 criminal charges relating to child abuse and child molestation. A remarkable outcome given the awful rulings of the judge during the trial. Previous coverage here and here.
When so many charges are leveled, the pressure to enter into a plea bargain intensifies–even if the accused is innocent. The defense attorney will say something like, “Look, some kids are going to say you did something awful. That’s going to happen. We might persuade the jury to acquit on most of the charges, but there’s still a chance they will convict you on a few counts. That could mean several years in jail. Might be better to plead guilty to one charge, serve six months, and then get on with your life.” Some people breezily proclaim that they would never plead guilty to a crime they did not commit, but when your own freedom is really on the line, the decision is not so easy.
More on plea bargaining here (pdf).
Who Is Fighting (Or Helping) Whom In Mexico’s Drug Wars?
Are Mexican authorities fighting an all out war against drug cartels or simply helping one drug organization win the battle against other criminal gangs for the most lucrative trafficking route to the United States? Street banners alongside Mexico’s highways—put up by rival drug gangs—have long suggested that the administration of Felipe Calderon is in bed with the Sinaloa cartel, that country’s most powerful drug organization. As The Economist reported earlier this year, the Mexican government’s efforts against drug trafficking have been fairly one-sided:
“The Sinaloa organisation (named after a north-western state) is responsible for around 45% of the drug trade in Mexico, reckons Edgardo Buscaglia, a lawyer and economist at ITAM, a Mexico City university. But using statistics from the security forces, he calculates that only 941 of the 53,174 people arrested for organised crime in the past six years were associated with Sinaloa.”
Leaked documents obtained and reported on Monday by Reforma newspaper suggest that drug corruption reaches the top levels of law-enforcement in that country, adding to the suspicion that the Mexican authorities have indeed sided with (some) drug lords. The documents apparently also show the police sharing DEA intelligence with its drug clients, a troubling development when Mexico is asking for more U.S. cooperation in its fight against some drug cartels.
Surveys indicate that the Mexican people still support the Calderon administration in its drug war. However, patience is running out, especially as the number of innocents killed in the violence soars. The tourism industry is also taking its toll, as shootings become commonplace in resorts such as Acapulco and Cancun, driving away visitors. If Mexicans perceive that all this blood and treasure have been paid just to help one criminal gang over the other ones, support for Calderon’s war will rapidly wane.
Also, these allegations present a conundrum for president Obama, who happens to host Felipe Calderon on Monday for a state dinner at the White House. The administration has been pressed by the Mexican government to substantially increase the level of assistance in the fight against cartels. However, if it becomes clear that high-ranking Mexican law enforcement officials are in bed with one or more criminal organizations (not the first time that something like this has happened) and that U.S. intelligence has ended up in the hands of drug lords, there will be growing resistance within the U.S. government to further aid Mexico. This in turn, will only exacerbate the tension between both governments.
“Plata o plomo” (which literally means “silver or lead” and refers to how officials are either corrupted or killed by drug lords) has long been a common feature of the drug war in Latin America. It is not surprising that multi-billion dollar cartels corrupt the officials who are supposed to fight them. What is surprising is some people in Washington still believe that this is a winnable war.
Congress to Produce Earmark Data?
A bill introduced in the Senate yesterday would require Congress to bring earmarks out of the shadows, producing earmark data in a format that the public can easily use.
S. 3335 calls for a “unified and searchable database on a public website for congressional earmarks.” This is something President Obama called for in his 2010 State of the Union speech, though we haven’t heard much more from him about it since then.
Importantly the bill is not just about a web site. The bill would enable the public to “programmatically search and access all data in a serialized machine readable format via a web-services application programming interface.” That gobbledegook means that people could access the data for themselves, slicing and dicing it to learn whatever they want or to display it however they want.
I’ve noted here before the efforts of my government transparency web site WashingtonWatch.com to capture earmark data and the related effort to get earmark data directly from Congress at Earmarkdata.org.
The bill was introduced by Senator Tom Coburn (R-OK), and is currently cosponsored by Sen. Michael Bennet (D-CO), Sen. Barbara Boxer (D-CA), Sen. Bob Corker (R-TN), Sen. John Ensign (R-NV), Sen. Russ Feingold (D-WI), Sen. Kirsten Gillibrand (D-NY), Sen. Johnny Isakson (R-GA), Sen. John McCain (R-AZ), and Sen. Mark Udall (D-CO). Its House counterpart is H.R. 5258 (Cassidy R-LA), which also has bipartisan support.
Support for these bills across parties and ideologies suggests good things may be in store for earmark transparency.
Kerry and Lieberman Unveil Their Climate Bill: Such a Deal!
I see that my colleague Sallie James has already blogged on the inherent protectionism in the Senate’s long-awaited cap-and-tax bill. A summary was leaked last night by The Hill.
Well, we now have the real “discussion draft” of “The American Power Act” [APA], sponsored by John Kerry (D-NH) and Joe Lieberman (I-CT). Lindsay Graham (R-SC) used to be on the earlier drafts, but excused himself to have a temper tantrum.
So, while Sallie talked about the trade aspects of the bill, I’d like to blather about the mechanics, costs, and climate effects. If you don’t want to read the excruciating details, stop here and note that it mandates the impossible, will not produce any meaningful reduction of planetary warming, and it will subsidize just about every form of power that is too inefficient to compete today.
Friedman Prize Essay Contest Winners
Last month Cato On Campus announced a student essay contest for free tickets to the Friedman Prize for Advancing Liberty dinner, which will honor Iranian journalist Akbar Ganji this week.
In 500 words or less, responders answered the question, “In light of the selection of Akbar Ganji for the receipt of the 2010 Friedman Prize for Advancing Liberty, who would you nominate for a second prize this year and why?”
Students from around the world sent replies. Topics ranged from Russian labor camp dissidents to U.S. politician Ron Paul; from economics professors to space exploration; from free markets in charity to an individualist psychiatrist. A common thread that ran throughout all of the entries was entrepreneurial spirit and a unwavering value of individual liberty.
Cato on Campus chose three winners. Congratulations to:
Yasmin Green, an International Studies M.A. student at St. John Fisher College, who wrote about George Ayittey, an advocate of liberty through social entrepreneurship in Africa. ”A man who believes that ‘Africa is poor because she is not free,’ Ayittey has worked to promote ideas and institutions that are consistent with the achievement of liberty, and individual rights,” wrote Green.
Joseph Hammond, a Middle East History M.A. student from California State University – Long Beach, who the Iranian protesters after the 2009 election. Hammond advocated that the many Iranians who demonstrated their dedication to becoming politcally recognized would be a “perfect compliment to Akbar Ganji.”
Liya Palagashvili, an Economics B.A. student at George Mason University, who identified economist Peter Boettke as an economist serving in the tradition of Milton Friedman. “In the classroom, Dr. Boettke advances his students in the ideas of liberty,” she wrote. “Outside of the classroom, Dr. Boettke inspires liberty through his writing,” which “is influential in providing a thorough understanding of liberty and the consequences of a nation that violates liberty.”
Congratulations to all the winners. If you’re a student and want to get more involved, check out Cato On Campus.
Back in the U.S.A.
Editors Note: Christopher Preble has just returned from a 9-day trip through Abu Dhabi, Dubai and Riyadh. Catch up on his trip here.
Well, it sure is nice to be home. I was fortunate to have traveled with an exceptional group of American academics. I learned a lot, but it was also nice to get to know them, and to share stories about how our respective institutions deal with different subjects. We were well-received by a number of senior Saudi government officials, a credit to the organizers of this trip. And as for the “people on the street” with whom I came into contact, the hotel staff and random merchants and restaurateurs were very friendly, and, almost without exception, spoke some English. (They also love American — that is to say Detroit — cars. I saw more Chevrolets, GMCs, and Fords on the road in Riyadh than I see every day in Northern Virginia.)
Having said all that, I can’t imagine any American ever really being comfortable in the Kingdom. For starters, we gave up on kings a long time ago, and with good reason. Americans might sometimes like the idea of royalty — they make such great copy for the tabloids, don’t you know — but we’d be genuinely horrified if a person’s right to rule over others were dictated solely by heredity.
Then there is the issue of women. One need not be an avowed feminist to be put off by the inequities in Saudi society. Perhaps I’d grow accustomed to seeing 50 percent of the population covered from head to toe in black, but I sincerely doubt it. Meanwhile, dress codes are merely the tip of the iceberg when it comes to women’s rights. Many years ago, the U.S. Supreme Court helped us to understand that “separate but equal” is inherently unequal. And the Saudis don’t even aspire to “separate but equal”. The “family” section of the Starbucks next door to our hotel received less attention from the wait staff than the main dining area (women patrons essentially came in through a back door, and were served through the kitchen). The “women only” lines at the food court at the nearby mall were longer than the “men only” ones. Our hotel in Riyadh had a nice workout room…for men only. My female traveling companions were reduced to calisthenics and stretching exercises in their respective (small) hotel rooms.
We heard a number of people trying to explain the rationales for keeping men and women separate. None were convincing.
The best educated there, including especially those who attended schools in the U.S. or U.K., understand that their country cannot progress if the percentage of women in the labor force remains at its current low level (about 15 percent). But public policy isn’t made by the best educated. Meanwhile, there are strong economic incentives at an individual or family level to allow women greater freedom, but these alone will not force a change in policy.
On the Right to Discriminate
In his post this morning, “Kagan on Military Recruitment,” Cato adjunct scholar Mark Moller touches on Cato’s 2005 amicus brief in Rumsfeld v. FAIR, which he co-authored when he was with us as editor-and-chief of the Cato Supreme Court Review – a duty he performed splendidly before moving off to the legal academy. In mentioning the brief, however, Mark says that he recalls that the position it took was controversial within Cato, that it might still be, and that Cato’s legal shop might take a different view were the case presented today.
I don’t recall that the position we took was controversial within Cato, but then it was five years ago, memories fade, and much has happened in the meantime, including the filing of a brief just three months ago that nicely complements the earlier position we took. In Rumsfeld v. Fair we argued that the government could not condition a private university’s eligibility for federal grants, as the Solomon Amendment did, on the university’s giving up one of its rights, namely, its right to freedom of association. The law school plaintiffs, citing the military’s “Don’t ask, don’t tell” policy, sought to exclude military recruiters from campus. Pursuant to their nondiscrimination policies, that is, the law schools sought to discriminate against those they thought to be wrongly discriminating. In our brief we took no position on the policy Congress had set for the military (that question was not before the Court), nor on the rights of public universities in this matter – nor did we address the question whether Congress, under its raise-and-support-armies power, could directly order schools to admit recruiters, as the Court ultimately held.
Well we now have the public school version of that issue before us, and the Court, in Christian Legal Society v. Martinez. And our brief in this case, written by Cato adjunct scholar Richard Epstein, argues that a public law school – Hastings, in this case – cannot condition the receipt of benefits it extends to all other student groups on CLS’s giving up its right to freedom of association. CLS, a private student group, excludes nonbelievers from its membership, which is its right. As a public institution, we argue, Hastings must treat all equally.
Thus, the principle in the two cases is the same. Private parties, pursuant to their right to freedom of association, may discriminate, whether we agree with their grounds for doing so or not. Public institutions, which belong to all of us, may not discriminate except on grounds narrowly tailored to their functions. Unfortunately, in numerous respects, that’s not our current law. For more, see here.
Senate Climate Bill Trade FAIL
The Kerry-Lieberman-Graham (is he still part of these efforts?) climate bill summary has been leaked. I’m sure my colleague Pat Michaels will weigh in on its contents soon, but in the meantime I thought I would comment on the trade-related aspects of the bill, or at least the summary that is now in the public domain.
As Scott Lincicome points out, the drafters have gone to great pains to emphasize that this bill is, like, totally about saving the environment. (Which, by the way, is a bit of a turnaround). I’ve blogged before about why advocates of “border adjustment measures” need to be careful about the justification they offer. In short, the World Trade Organization does not look too kindly upon disguised protectionism, and any legal challengers would probably use things like, say, press releases touting the (traditional) protective benefits of carbon tariffs as evidence of U.S. wrongdoing. The House bill fell short in that regard, with lots of talk about equalizing costs etc, and apparently the sponsors of the Senate bill have learned from warnings from trade experts. Not completely, though. Here’s Scott on their efforts to be more careful, and why they fall short:
The bill’s short summary (available here) also follows [a] new “green” road-map…:
In order to protect the environmental goals of the bill, we phase in a WTO-consistent border adjustment mechanism. In the event that no global agreement on climate change is reached, the bill requires imports from countries that have not taken action to limit emissions to pay a comparable amount at the border to avoid carbon leakage and ensure we are able to achieve our environmental objectives.
You couldn’t shoehorn more “environmental” references into this summary if you tried. Only one small problem: this strictly “environmental” summary falls clearly under the main heading “Expanding America’s Manufacturing Base,” and the long summary of Sections 775-777 above comes under the main heading “Subtitle A – Protecting American Manufacturing Jobs and Preventing Carbon Leakage.” So did the Senate drafters really just take all that time purging all of the scary “competitiveness” language from their new bill’s carbon tariffs provisions, only to keep them under a legislative subtitle that expressly denotes provisions dealing with domestic industrial competitiveness?
Scott’s right, but I found the heading in the bill’s long summary even more blatant: Title IV, under which the international provisions are explained, is called “Job Protection and Growth”. Call me overly cautious, but I don’t think having the phrase “job protection” as the first words in the title on border measures is a good way to hide your intent from the WTO or, for that matter, your increasingly-fractious trade partners.
Senate Rejects Capping Fannie/Freddie Losses
Yesterday the Senate rejected an amendment by Senators McCain, Shelby and Gregg that would have capped the taxpayer losses on Fannie and Freddie at $200 billion each. The amendment would have also brought Fannie and Freddie onto the Federal budget, forcing the government to admit what most of us already suspect: we’re on the hook for their bad behavior. All Republicans, with the additions of Democrats Feingold and Bayh, voted for the failed amendment. As a substitute, which passed along party lines, Senator Dodd proposed that the Treasury Department would “study” the issue and report back to Congress.
While it was not surprising that Dodd lead the opposition to the McCain amendment (it is not the first time he’s protected Fannie and Freddie), what was surprising was his repeated explanation that the National Association of Realtors and National Association of Home Builders opposed the amendment. With all of Obama’s talk about taking on special interests, I was starting to think the Senate might be serious. But what’s a few $100 billion of taxpayer dollars to insure that real estate agents can get a few more fat commissions.
Even more bizarre was Dodd’s claim that his substitute amendment was a “tough study”. What exactly is so tough about requiring Treasury to do a study that they’ve already said they were going to do. For that matter, what’s so tough about a “study”? The failings of Fannie and Freddie, and their inherent conflicts, have been studied extensively for years. The rejection of the McCain amendment illustrates why we need GSE reform now, as the special interests are already claiming that another study is all we need.
Obama’s ‘New’ Drug Strategy
Ho-hum. Another administration, another “comprehensive plan to combat drug abuse, putting the focus on prevention and treatment strategies.” This one “calls for a 15 percent reduction in youth drug use, a 10 percent decrease in drugged driving, and a 15 percent reduction in overall drug-related deaths by 2015.” It involves more central planning — “ the creation of a community-based national prevention system” – more taxpayers’ money — “an expanded array of intervention-oriented treatment programs” — and more nannyism — “a push to screen patients early for signs of substance abuse, even during routine appointments, and the expansion of prescription-drug monitoring programs.” And don’t forget the ever-popular, ever-futile “more international cooperation in disrupting the flow of drugs and money.” Let’s write down those percentage goals, modest as they are, and see how many of them get accomplished.
As it happens, I had a chance to meet with drug czar Gil Kerlikowske and his top aides last year, as part of a series of outreach meetings as the new team planned its strategy. It doesn’t look like my advice was taken. Of course, I probably didn’t help my case by noting that our last three presidents have acknowledged using illegal drugs, and it is just incomprehensible to me how they can morally justify arresting other people for doing the same thing they did. Do they think that they would have been better off if they had been arrested and incarcerated for their youthful drug use? Do they think the country would have been better off if they had been arrested and incarcerated? If not, how do they justify punishing others?
I then suggested that they pursue the policies recommended by Timothy Lynch and myself in the Cato Handbook for Policymakers:
● repeal the Controlled Substances Act of 1970,
● repeal the federal mandatory minimum sentences and the federal sentencing guidelines,
● direct the administration not to interfere with the implementation of state initiatives that allow for the medical use of marijuana, and
● shut down the Drug Enforcement Administration.
Suspecting that the administration despite being headed a young president who in 2004 had declared the war on drugs an “utter failure” and advocated the decriminalization of marijuana, would not adopt my proposals, I went on to recommend a few mildly ameliorative reforms: stop federal lobbying in state initiative campaigns, stop federal raids on medical marijuana dispensaries and other interference with state policy choices, and stop the Pentagon from giving military equipment to local police forces.
I must admit, though, that the other think tank analysts at the meeting, both liberal and conservative, offered the sorts of proposals for more social workers and more transition programs and more doctors that seem to have ended up in the “new” proposal. Perhaps I should have come up with a couple of proposals that would have cost more money rather than less.
Wednesday Links
- A few questions to ask Supreme Court nominee Elena Kagan.
- How to treat a taxaholic.
- In England there are 4 million government security cameras, one for every 14 Britons. Are we headed in that direction?
- The E.U.’s aggressive bailout plan: An experiment in levitation?
- Podcast:“Understanding ‘Epistemic Closure’” featuring Julian Sanchez.
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