Archive for June, 2010
Is That Quacking I Hear?
From the sound of the president’s speech last night we might be headed for a lame duck session in Congress and a fight over some unpopular climate legislation.
You can read my op-ed on the coming battle over climate legislation over at Townhall.
New York State Should Cut Property Taxes
The New York Times editorialists are at it again. June 12th’s lead editorial, “The Latest Work Dodge: A Shutdown,” frets over the specter of the New York state government being shut down because Albany’s legislators can’t agree on a budget. Well, the Times must have breathed a collective sigh of relief late Monday (June 14th). That’s when the State Senate passed Governor Paterson’s 11th temporary budget extender, which allowed state offices to hang out “open for business” signs on Tuesday.
But, the Times wants a final state budget and claims that more taxing and borrowing and maybe some cuts in school aid will do the trick. One item that the Times wants off the table in Albany is property taxes. According to the Times, Democratic state senators outside New York City should stop pushing for restrictions on the rate of growth of property taxes. I agree. Instead, the legislators should start pushing for sharp cuts in New York’s oppressive property taxes. When every U.S. county is ranked according to its average property-tax bill, as a percent of home values, 14 of the highest 15 are in New York state.
As Prof. Steve Walters and I concluded in “A Property Tax Cut Could Help Save Buffalo” (Wall Street Journal, December 6, 2008), New York should follow California and Massachusetts and cut property taxes. Voters capped property taxes in California at 1% of market value with Proposition 13 in 1978. That forced San Francisco to cut its rate by 57% overnight and brought forth a tidal wave of investment, even amidst a recession. By 1982, inflation-adjusted city revenues were two-thirds higher than they had been before Prop. 13. Massachusetts voters passed Prop 2 ½ in 1980, forcing Boston’s property tax rate down by an estimated 75% within two years. Massive reinvestment, repopulation and urban renewal followed.
Your Government At Work
Here’s yet another example of government programs that are total nonsense, collectively, if not individually.
First, news that a Federal panel of experts has issued a new report on what you should be eating.
[The report's] findings: People should consume more vegetables and whole grains, and less fatty meats, salt and sugar…The guidelines in turn will form the basis of the USDA’s updated food pyramid, scheduled to be released in spring 2011. They also determine the nutrition standards for all federal nutrition programs, including the National School Lunch Program, which feeds more than 30 million children a day.[emphasis mine]
I’ve emphasized the “less fatty meats” part because that news comes hot on the heals of this article that hit the wires yesterday:
The U.S. Agriculture Department plans to buy as much as $14 million worth of dark meat chicken products to help producers facing a glut in stocks and decreasing prices, Agriculture Secretary Tom Vilsack said on Tuesday…The government purchase… will be used by food banks, school lunch programs, and other food assistance programs….
So let’s get this straight: the Federal government is on the one hand encouraging people to eat fewer fatty meats, but on the other is buying more of said fatty meats to appease a special interest. And they can’t even use “inter-agency coordination problems” as an excuse.
Perfidious Albion?
Today’s Wall Street Journal excerpted a Peter Hitchens Daily Mail column and then inexplicably tried to stick it behind the pay wall on their website. (Peter is the “Anti-War, Pro-God” Hitchens, not the “Pro-War, Anti-God” Hitchens.)
Because I’m feeling subversive–and because the column was a good piece of prose–let’s take a look. Hitchens is talking about the Obama White House vs. BP in the context of the US-England relationship, and lets loose: Read the rest of this post »
House GOP Announces First Vote to Repeal ObamaCare
House Republicans say they will force a vote to repeal ObamaCare’s individual mandate, which will subject nearly all Americans to fines and/or imprisonment if they do not purchase a government-designed health insurance plan. They are soliciting public feedback on their America Speaking Out website, which explains:
We need to repeal and replace the health care law with common sense reforms that will actually lower health care costs and let Americans keep the plan they have and like. That’s why Republicans are offering a proposal to repeal the requirement forcing Americans to buy government-approved health insurance. Twenty states and the nation’s leading small business organization agree that this law is unconstitutional and that’s why they are suing to overturn it. The federal government shouldn’t be in the business of forcing you to buy health insurance and taxing you if you don’t.
I’d rather see the entire law repealed — including the price controls on health insurance, the trillions of dollars in health insurance subsidies, the CLASS Act, etc.. Why not do it all at once, just so you don’t miss anything important?
But this vote is unlikely to succeed, so I suppose there will be time for votes repealing the whole thing.
Ending DADT, Again
Stuart Koehl has a piece at The Weekly Standard against ending Don’t Ask Don’t Tell (DADT). He presents a comprehensive set of arguments based on readiness, that ending DADT will hurt the effectiveness of the force.
I disagree, and it’s worth pointing out that he is quick to dismiss the fact that other first-rate militaries have allowed gays to serve without damaging readiness. As he puts it:
But history provides plenty of evidence that homosexuality does undermine unit cohesion. The current practices of other armies are an experiment in progress, which should not overturn empirically proven policies. There are also significant differences between those armies and the United States military. The first is scale—the entire British army is barely the size of the Marine Corps, while the Israeli army is very small unless fully mobilized. Neither the British nor the Israeli armies undertake extended overseas deployments of the length or scale of the U.S. military; Israeli army is very much a “commuter” force, with most troops living at home unless serving in the field—which is only an hour or so from home. As a result, neither has any experience with homosexuals serving in the field for extended periods. Finally, neither the British nor the Israeli armies have experienced anything approaching an extended, high-intensity war, so neither has any idea what effect homosexuals in the ranks might have on combat effectiveness.
Israel certainly has experience with an extended, high-intensity war. Since its birth it has faced the threat of invasion and terrorism, and the forecast for the last few decades has been scattered machine-gun fire with a chance of rockets by mid-afternoon.
Except for the United States, Britain remains the largest donor of forces to Afghanistan (now America’s longest war), according to the ISAF website. This excellent dispatch from Michael Yon portrays them as a first-rate force. There’s even a female combat medic on patrol with Yon. I see no difference between American and British experiences in Afghanistan to support Koehl’s claim.
Setting aside the official policy, American commanders have historically looked the other way during war to allow gays to serve in their units. As I said in this post:
Sergeant Darren Manzella served as a combat medic, and his chain of command investigated the claim that he was gay. Manzella provided pictures and video of him with his boyfriend, but found “no evidence of homosexuality.”
The story makes clear that Manzella gave them plenty evidence of homosexuality, but it didn’t make any sense to get rid of a good soldier in a critical field when he wanted to continue serving and there was a war going on.
Gays are currently serving in Afghanistan and Iraq. I am certain that many of their brothers and sisters in arms suspect or know that they are gay, and don’t care. Ending DADT will not harm military readiness.
Prizes for Writing on Freedom
Submissions for the Bastiat Prize for Journalism and the Bastiat Prize for Online Journalist close at the end of June. Journalists, bloggers, and writers of op-eds are encouraged to submit their work here. The International Policy Network awards prizes of up to $10,000 to “writers anywhere in the world whose published articles eloquently and wittily explain, promote and defend the principles and institutions of the free society.”
Note that these prizes are not (just) for students. Last year’s winners included law professor John Hasnas, for an oped published in the Wall Street Journal; Robert Guest, Washington Correspondent of the Economist; Robert Robb, editorial columnist of the Arizona Republic; British politician and blogger Daniel Hannan; and Shikha Dalmia, online columnist for Forbes and Reason.
Grasping for Rationales, Feeding Conspiracy Theories
On June 13, the New York Times reported that America “just discovered” a trillion dollars worth of mineral resources in Afghanistan (HT to Katie Drummond over at Danger Room for offering some enlightened skepticism on the topic).
Of course, the U.S. Geological Survey has known about Afghanistan’s “large quantities of iron and copper” since 2007. The Los Angeles Times reported that geologist Bonita Chamberlain, who has spent 25 years working in Afghanistan, “identified 91 minerals, metals and gems at 1,407 potential mining sites” as far back as 2001. Chamberlain was even contacted by the Pentagon to write a report on the subject just weeks after 9/11 (possibly to expound upon the findings of her co-authored book, “Gemstones in Afghanistan,” published in 1996.)
Given the recent failure of Marjah, which Gen. McChrystal recently called “a bleeding ulcer,” this new “discovery” could offer Western leaders a new way to convince their war-weary publics that Afghanistan is worth the fight. Government officials are already touting this new “discovery” as yet another “decisive moment” or “corner turned” in the Afghan campaign.
In the NYT article, head of Central Command, Gen. David Petraeus, said, “There is stunning potential here. There are a lot of ifs, of course, but I think potentially it is hugely significant.”
Afghanistan epitomizes the fate of countries too dependent on foreign patronage, which over time has weakened its security by undermining their leaders’ allegiance to the state. In the long run, $1 trillion worth of mineral deposits could eventually help Afghanistan stand on its own two feet. However, two problems emerge. First, there is little assurance that revenue from mineral resources (which will take years of capital investment to extract) will actually reach the Afghan people and not be siphoned off by Karzai and his corrupt cronies–like much of the international community’s investment does now.
Second, in the short-term, this discovery may feed conspiracy theories that already exist in the region. Though unwise to generalize personal meetings to an entire population, some conspiracy theories that I heard while I was recently in Afghanistan should give U.S. officials pause before announcing that America can help extract the country’s mineral deposits. Some of the wildest conspiracy theories I heard were that the United States wants to occupy Afghanistan in order to take its resources; the Taliban is the United States; the United States is using helicopters to ferry Taliban around northern Afghanistan (courtesy of Afghan President Hamid Karzai); America is at war in order to weaken Islam; and the list goes on.
This “discovery” may force more people in the region to ask: what are America’s real reasons for building permanent bases in Central Asia?
This piece originally appeared on the Huffington Post on June 15, 2010.
Congress to Expand Deposit Insurance
While I never had much hope that this Congress would actually fix the real causes of the financial crisis – loose monetary policy, Fannie/Freddie – I had hoped that they wouldn’t do a lot to make an already bad situation worse. Boy, was that hope naive.
Take the area of federally provided deposit insurance. There is a massive amount of scholarly work, much of it empirical, that demonstrates that expanding the level and scope of deposit insurance results in more frequent and severe financial crises. So what is Congress considering? Yes, you guessed it: expanded deposit insurance.
Recall during the financial crisis Congress raised the coverage limit to $250,000 – forget that there were never any premiums charged ahead of time for this coverage. The FDIC also, without any basis in law, offered unlimited coverage to non-interest bearing accounts, targeted mostly at business customers. While these expansions may have brought the system some short term stability, they come at the cost of considerable long term instability.
Congress is also making the misguided change of basing insurance premiums on total assets rather than total deposits. This will punish banks for relying on sources of funding other than deposits, giving banks an incentive to shift their funding toward deposits, putting the taxpayer ultimately at even greater risk.
So why all these expanded bank guarantees? Smaller banks view these as changes that would give them a competitive advantage relative to larger banks. After all community and regional banks are far more dependent on deposits as a source of funds. And while big banks are damaged politically, the smaller banks, despite their higher failure rates, have managed to maintain their political ability to shift the costs of their risk-taking onto the backs of the taxpayer.
What Would Reagan Do on Immigration?
Former Reagan speechwriter Peter Robinson tries to answer that very good question in an op-ed in today’s Wall Street Journal. It’s a question my conservative Republican friends should ask themselves as the party tries, once again, to turn public opposition to illegal immigration into political success at the polls.
Robinson correctly observes that Reagan would have had nothing to do with the anger and inflamed rhetoric that so often marks the immigration debate today. “Ronald Reagan was no kind of nativist,” he concludes, noting that Reagan was always reaching out to voters beyond the traditional Republican base, including the fast-growing Hispanic population.
It’s worth remembering that Reagan signed the 1986 Immigration Reform and Control Act (IRCA), which opened the door to citizenship for nearly 3 million people who had been living in the country illegally. Robinson is confident Reagan would have supported the kind of comprehensive immigration reform championed by President George W. Bush and approved by the Senate in 2006.
For the record, I made similar observations and included a few of the same Reagan quotes in an op-ed I wrote soon after Reagan’s passing in June 2004
My only quibble with Robinson is his assertion that Reagan would have insisted that we successfully enforce the current immigration law first before contemplating any changes. It’s true that the 1986 IRCA contained new enforcement measures and launched an exponential rise in spending on border enforcement. But by all accounts the 1986 law failed to stem the inflow of illegal immigration.
My hunch is that President Reagan would not have simply favored spending more money on an approach that has so clearly failed to deliver. Although he embraced the conservative label, Reagan was always ready to challenge the status quo and change the law to further his vision of a free society and limited government.
I wish more of the Gipper’s admirers today shared his benevolent attitude toward immigration.
Overcriminalization in the Financial Reform Legislation
The Heritage Foundation and National Association of Criminal Defense Lawyers (NACDL) made a stir by announcing their joint report, Without Intent: How Congress is Eroding the Criminal Intent Requirement in Federal Law. The report highlights the growth of federal criminal provisions in the 109th Congress. Many criminal statutes are drafted without the traditional requirement of criminal intent. When there is no requirement that the government prove you “willfully” or “knowingly” broke the law, mistakes are treated the same as intentional criminality. Some laws are written so broadly that it is impossible for anyone to know what conduct is illegal. Criminal provisions are included in statutes that are never reviewed by the judiciary committees of either chamber of Congress.
The NACDL has a follow-up analysis of the financial regulatory reform currently being considered by Congress. The Restoring American Financial Stability Act of 2010 has passed both houses and is heading into committee.
This 1600-page bill does everything that the Without Intent report warned against. The “reckless disregard” intent requirement is imported from tort law in several provisions and many others have no mental state requirement at all. New bribery and mail/wire fraud provisions are included where none are necessary. Bribery and fraud are already illegal.
Read the whole thing (direct .pdf link here).
Minimum Wage Hikes Deserve Share of Blame for High Unemployment
Even though the Obama Administration claimed that squandering $800 billion on so-called stimulus would keep the joblessness rate below 8 percent, the unemployment rate today is almost 10 percent. There are many reasons for the economy’s tepid performance, including a larger burden of government spending and the dampening effect of future tax rate increases (tax rates will jump significantly on January 1, 2011, when the 2003 tax cuts expire).
A closer look at the unemployment data, though , suggests that minimum wage laws also deserve a big share of the blame. In this Center for Freedom and Prosperity video, a former intern of mine (continuing a great tradition) explains that politicians destroyed jobs when they increased the minimum wage by more than 40 percent over a three-year period.
Mr. Divounguy is correct when he says businesses are not charities and that they only create jobs when they think a worker will generate net revenue. Higher minimum wages, needless to say, are especially destructive for people with poor work skills and limited work experience. This is why young people and minorities tend to suffer most – which is exactly what we see in the government data, with the teenage unemployment rates now at an astounding (and depressing) 26 percent level and blacks suffering from a joblessness rate of more than 15 percent.
In a free society, there should be no minimum wage law. From a philosophical perspective, such requirements interfere with the freedom of contract. In the imperfect world of politics, thought, the best we can hope for is that politicians occasionally do the right thing. Sadly, the recent minimum wage increases that have done so much damage were signed into law by President Bush. It’s worth noting that President Obama’s hands also are dirty on this issue, since he supported the job-killing measure when it passed the Senate in 2007. When the stupid party and the evil party both agree on a certain policy, that’s known as bipartisanship. In the real world, however, it’s called unemployment.
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