Archive for June, 2010
This Week in Government Failure
Over at Downsizing Government, we focused on the following issues this week:
- Downsizing’s new Department of Transportation website is up and running!
- A new essay on “Overpaid Federal Workers” is also up and it’s already generating a lot of buzz in the media.
- Amtrak’s reputation for financial shenanigans lives on.
- Kudos to the Washington Post for pointing out what we’ve been saying for a while: “regime uncertainty” is stifling the economy’s ability to recover.
- President Obama’s lieutenants have instructed federal agencies to come up with spending cuts equal to five percent of their discretionary budgets for fiscal year 2012. 2012? Why wait?!?!
Latest Trade Figures Should Cool Talk of Getting Tough with China
The drums of a trade war with China are beating more loudly in Congress this week. Sen. Chuck Schumer, D-N.Y., is threatening to introduce a bill in the next two weeks that would raise tariffs on imports from China if it does not quickly appreciate the value of its currency, the yuan.
The argument behind the bill is that an artificially cheap yuan makes Chinese goods too attractive for struggling American consumers, to the disadvantage of certain U.S. companies that would prefer to charge us higher prices, while it stifles U.S. exports to China.
The latest monthly trade report, released yesterday by the U.S. Department of Commerce, should give pause to those who want to punish China for its currency policies.
In the first four months of 2010, compared to the same period in 2009, U.S. exports of goods and services to China were up 41 percent. That is twice the rate of growth of our exports to the rest of the world excluding China.
Meanwhile, imports from China were up 14 percent year-to-date, compared to a 25 percent increase in imports from the rest of the world. As a result, while our trade deficit with all other countries grew by 46 percent, from $78 billion to $114 billion, our trade deficit with China grew only 6 percent, from $67 billion to $71 billion.
A more flexible, market-driven yuan would be welcome, for all the reasons we’ve written about at the Center for Trade Policy Studies, but its current rate is not an excuse for raising trade barriers.
Problems Overturning Citizens United
Congress has been trying to overturn the Citizens United decision for the past four months. (Citizens United invalidated bans on speech by groups taking a corporate form). Their effort — the DISCLOSE Act — now seems bogged down in the House of Representatives. The National Rifle Association argues that they should not have to disclose their small donors. The labor unions also have complaints:
Amaya Tune, a spokeswoman for the AFL-CIO, told Bloomberg this week that “the final bill should treat corporations different than democratic organizations such as unions. We believe the legislation should counter the excessive and disproportionate influence by big business and guarantee effective disclosure of who is paying for what.”
Here’s the problem: The Supreme Court has ruled that Congress cannot regulate campaign finance to achieve equality of influence. Ms. Tune is calling for changes in DISCLOSE to “counter the excessive and disproportionate influence by big business.” If Congress enacts those changes, how can the law be defended against the charge that Congress is seeking to legislate a greater equality of influence? Won’t the parts of the law demanded by the unions be unconstitutional?
A Look Inside the Dark Heart of the GOP
Evidence that Republican leaders and conservative pundits want to shake off their anti-gay image continues to mount. Since the 2008 election, gay marriage has become legal in four more states and the District of Columbia, yet conservatives have been virtually silent. As Congress moves to repeal the don’t ask, don’t tell policy, Republicans are almost all voting against it, but they’re not making a lot of noise about it. Jonathan Rauch cites the lack of interest in Iowa in overturning the state court’s gay marriage decision and Republican strategist Grover Norquist’s observation that the Tea Party enthusiasm is focusing Republicans and conservatives on economic rather than social issues.
Many politicians have had a long dark night of the poll. They know that public opinion on gay rights has changed. Gallup just issued a poll showing that more than half of Americans believe that “gay or lesbian relations” are “morally acceptable.” Seventy percent, including majorities of all demographic groups, favor allowing openly gay people to serve in the military. Those are big changes since 2003, much less 1993, and politicians can read polls. Indeed, one thing that gay progress shows us is that cultural change precedes political change.
But out in the real world, where real Republicans live, the picture isn’t as promising. In the Virginia suburbs of Washington this week, Patrick Murray defeated Matthew Berry in a Republican primary. Berry, formerly a lawyer for the Institute for Justice and the Department of Justice, seemed to be better funded and better organized than Murray, an Iraq war veteran. The Republican in my household received at least two mailers and three phone calls from the Berry campaign and nothing from Murray. So why did Murray win? Well, Berry is openly gay, and David Weigel at the Washington Post reports that the Murray campaign did send out flyers focusing on gay issues. They may have gone only to Republicans in the more conservative parts of the district. And Republican activist Rick Sincere tells me that “in the last few days before the election, I received numerous emails from the Murray campaign that included subtle reminders that Matthew is gay and supports an end to DADT. He also, in a Monday email, took a quotation from Matthew out of context to make it look like he supports a federally-enforced repeal of Virginia’s anti-marriage law. In other words, Murray played the anti-gay card.” Blogger RedNoVa made similar observations, adding, “If you were at the Matthew Berry party last night, you would notice that the average age in the room was about 30. Young people were everywhere. The future of our party was there. Murray’s campaign crowd was older, and full of party purists.”
Planning a Cybersecurity Auto-Immune Reaction
A Senate plan to give the president authority to seize control of the Internet in the event of emergency is security malpractice of the highest order. As I told C|Net’s Declan McCullagh, this is a plan for an auto-immune reaction. When something goes wrong with the Internet, the government will attack that infrastructure and make society weaker.
The Internet is the medium over which we communicate and self-organize. It’s where emergency response happens—where individuals learn what is happening, communicate it to others, compare notes with friends and loved ones, and determine appropriate responses. (Our appreciation for “first responders” should not be diminshed by noting that they are typically second responders, taking over for private citizens who are almost always first on any scene.)
The Internet is also self-repairing. When weaknesses in it are exposed, that fact is communicated via Internet, and the appropriate fixes and patches are distributed via Internet. Seizing control of the Internet—to the extent the government can do that—would degrade society’s natural response to emergency, and it would undercut the Internet’s ability to self-heal.
This idea—of government authority taking over the Internet for our protection—fundamentally misunderstands the nature of the Internet, the nature of our society, and the type of government the Framers prescribed for us.
Plowing Through the Defenses of National Education Standards
Arguably the most troubling aspect of the push for national education standards has been the failure — maybe intentional, maybe not — of standards supporters to be up front about what they want and openly debate the pros and cons of their plans. Unfortunately, as Pioneer Institute Executive Director Jim Stergios laments today, supporters are using the same stealthy approach to implement their plans on an unsuspecting public.
Standing in stark contrast to most of his national-standards brethren is the Fordham Institute’s Mike Petrilli, who graciously came to Cato last week to debate national standards and is now in a terrific blog exchange with the University of Arkansas’s Jay Greene. Petrilli deserves a lot of credit for at least trying to answer such crucial questions as whether adopting the standards is truly voluntary, and if there are superior alternatives to national standards. You can read Jay’s initial post here, Mike’s subsequent response here, and Jay’s most recent reply right here.
I’m not going to leap into most of Jay and Mike’s debate , though it covers a lot of the same ground we hit in our forum last week, which you can check out here. I do want to note two things, though: (1) While I truly do appreciate Mike’s openly grappling with objections to what might be Fordham’s biggest reform push ever, I think his arguments don’t stand up to Jay’s, and (2) I think Mike’s identifying national media scrutiny as what will prevent special-interest capture of national standards is about as encouraging as BP telling Gulf-staters ”we’ve got a plan!”
Let’s delve into #2.
For starters, how much scrutiny does the national media give to legislating generally? Reporters might hit the big stuff and whatever is highly contentious, but even then how much of the important details do they offer? Think about the huge health care debate that just dominated the nation’s attention. How many details on the various bills debated did anybody get through the major media? How much clarity? Heck, sometimes legislators were debating bills that even they hadn’t seen, much less reporters. Of course, the health care bill was much bigger than, say, the No Child Left Behind Act, but remember how long after passage of NCLB it was before the Department of Education, much less the media, was able to nail down all of its important parts?
Which brings us to a whole different layer of policy making, one major media wade into even less often than legislating: writing regulations. How many stories have you read, or watched on TV news, about the writing of regulations for implementing anything, education or otherwise? I’d imagine precious few, yet this is where often vaguely written statutes are transformed into on-the-ground operations. It’s also where the special interests are almost always represented — after all, they’re the ones who will be regulated — but average taxpayers and citizens? Don’t go looking for them.
Congress Begins Conference on Financial Regulation
Today begins the televised political theatre that Barney Frank has been waiting months for: the first public meeting of the House and Senate conferees on the two financial regulation bills. While there are a handful of important differences between the House and Senate bills, these differences are overshadowed by what the bills have in common. The most important, and tragic, commonality is that both bills ignore the real causes of the financial crisis and focus on convenient political targets.
As our financial system was brought to its knees by an exploding housing bubble, fueled by government mandates and distortions, one would think, just maybe, that Congress would roll back these distortions. Despite their role in contributing to the crisis and the size of their bailout, however, neither bill barely mentions Fannie Mae and Freddie Mac. Except, of course, to continue their favored and privileged status, such as their exemption from a proposed new “consumer protection” agency. What we really need is a new “taxpayer protection” agency.
Nor will either bill change the government’s meddling in what is probably the most important price in the economy: the interest rate. Given the overwhelming evidence that loose monetary policy was a direct cause of the housing bubble, one might expect Congress to spend time and effort preventing the Fed from creating another bubble. Not only does Congress ignore the issue, the Senate won’t even allow GAO to look at the Fed’s conduct of monetary policy.
Instead of spending the next few weeks gazing into the camera, Congress should stop and gaze into the mirror. This was a crisis conceived and born in Washington DC. The Rayburn building serving as the proverbial back-seat of the housing bubble.
Stossel Tonight!
Tom Palmer, Johan Norberg, and I are among the guests tonight on Stossel on the Fox Business Network. John Stossel interviews us all about the work and impact of Milton Friedman, especially his book Free to Choose, published 30 years ago. Political theorist Benjamin Barber provides the anti-Friedman counterpoint.
Watch Stossel Thursdays at 8 p.m. and 12 midnight, Saturdays at 8 p.m. and 11 p.m., and Sundays at 10 p.m. (all times eastern).
You Say You Want Comparative-Effectiveness Research?
Over at CongressDaily, Julie Rovner has a great piece on the difficulties involved in generating and using comparative-effectiveness research (read: evidence that can improve the quality and reduce the cost of medical care). Rovner cites a recent New England Journal of Medicine article about the obstacles to conducting CER, and a recent article from Health Affairs that finds consumers tend to trust their doctor’s judgment more than evidence-based treatment guidelines.
In a paper titled, “A Better Way to Generate and Use Comparative-Effectiveness Research,” I explain how a string of government interventions — from state licensing of medical professionals and health insurance, to the tax preference for job-based health insurance, to Medicare and Medicaid — have reduced both patients’ demand for evidence about which medical interventions work best, as well as the market’s ability to supply that evidence. In that paper, I predict that efforts like the CER funding in the “stimulus” bill and ObamaCare’s “Patient-Centered Outcomes Research Institute” will fail, just as all such government efforts have failed in the past.
If you want to generate evidence about which medical interventions work best, and have people use that evidence, then you need to liberalize the U.S. health care sector.
The Horror of It!
Today Politico Arena asks:
Will Reid be able to portray Angle as an extremist?
With an air of wonder, POLITICO reports this morning that Sharron Angle, facing Senate majority leader Harry Reid in the fall elections, “has previously made eyebrow-raising statements about withdrawing the U.S. from the United Nations, eliminating the departments of Energy and Education, and privatizing Social Security.” Eyebrow-raising? As in “who could stand for such things”?
Beyond the Beltway (and even in pockets within the Beltway), there actually are people who believe that American taxpayers should not be subsidizing the play things of such human-rights-respecting exemplars as Cuba, China, Russia, and their ilk, all of whom sit on the United Nations Human Rights Council. And for some reason, we actually did have both energy and education in this country before the Departments of Energy and Education were created, hard as it may be to believe, just as we had art, philosophy, and radio before the NEA, NEH, and NPR were created. And people retired, on their own savings, before the Social Security system was invented. Speaking of which, it might be useful to note that that Ponzi scheme is now operating in the red, six years earlier than expected. Now there‘s a reason to raise one’s eyebrows.
Stalin Merits No Memorial, But His Victims Do
I have written previously about the damnable decision to include a bust of Stalin in the new National D-Day Memorial in Bedford, Virginia. An excerpt of my attack on this misguided move:
Memorials are monuments to fallen heroes, not historical dioramas. There is no statue of Stephen Douglas at the Lincoln Memorial, no bust of Wendell Willkie at the FDR Memorial, and no plaques honoring Axis dead at our WWII Memorial. Moreover — and perhaps most importantly from a historical perspective – Stalin had no role in D-Day; the invasion of Normandy by U.S., British, Canadian, Australian, Free French, and other Western forces.
While there is no question that Stalin, by virtue of commanding the army fighting on the Eastern Front, played an indispensable role in defeating Hitler, it should escape no one’s memory that he too was an evil, mass-murdering despot.
As it happens, this past Sunday was the anniversary of D-Day, so of course this travesty is in the news again. Here’s a statement from Lee Edwards, chairman of the Victims of Communism Memorial Foundation:
Clearly, the National D-Day Memorial Foundation knows it made a monumental mistake by including Stalin in its Memorial. It tried to justify its action by adding a plaque citing the tyrant’s “tens of millions of victims” and then to minimize it by privately installing the bust five days before the formal dedication of the D-Day Memorial on June 6.
But the Stalin bust remains as does the profound injury to the memory of those who launched a crusade for freedom in Europe in June 1944. The honorable thing for the National D-Day Memorial Foundation to do is to remove the bust without delay.
Felicitously, at 10 a.m. today there will be a wreath-laying at the Victims of Communism Memorial in Washington (corner of Massachusetts Ave. and New Jersey Ave. NW):
This event will mark the memorial’s third anniversary, as well as signaling our continued vigilance against the deadliest ideology in human history.
According to a VCMF press statement, at least 12 foreign embassies and nearly 20 ethnic organizations will lay wreaths in honor of the more than 100 million victims of Communism. Among the invited speakers are Representatives Dan Lipinski of Illinois and Thaddeus McCotter of Michigan, Swedish MP Göran Lindblad, and Tiananmen Square activist Dr. Yang Jianli. For more information, contact Jaron Janson or Steve Miller at at 202-536-2373 or vocmemorial@aol.com.
Ever Get the Feeling You’ve Been Cheated?
More than once I’ve come across reports in the immigration area that start from false premises. A good example is a report from the Smart Card Alliance titled “Securing Identity and Enabling Employment Verification: How Do Immigration Reform and Citizen Identification Align?”
In the second paragraph of the executive summary, the report states: ”A robust system of identification and secure identification documents is a key requirement that needs to be addressed in the immigration reform debate.”
This premise is wrong. Reforming immigration law is what should be addressed in the immigration reform debate. Identity security, just like border control, will flow naturally from reforms to immigration law that create legal avenues for entry. There is no need to create a national ID.
You may disagree with my thinking on that, but can you present objective proof that I’m wrong? Some repeatable experiment showing to a high degree of certainty that identity systems must be a part of immigration reform? I suspect you’ll agree fair-mindedly that the proposition is subject to debate.
But the next paragraph says “This document limits itself to providing factual information to allow the reader to make educated and informed decisions.” Balderdash.
The “privacy” section of the report—less than a page of it—deals mostly with security, not the tougher problem of designing a system that allows law-abiding citizens to control personal information, both within the card system and in its likely uses.
The Smart Card Alliance, for sponsoring this report, and readers of it should ask themselves a searching question.
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