Archive for July, 2010
Grinning and Bearing GM’s Bitter Ironies
Via General Motors, American taxpayers will soon own a 61 percent stake in a Texas-based company called AmeriCredit. GM announced plans yesterday to acquire the auto finance firm for $3.5 billion, which management believes will help boost its auto sales and improve chances for an IPO later this year or next.
Thus, a greater chance for re-privatization later is the rationalization for more nationalization now.
For those who opposed the nationalization of GM for its affront to free markets and the rule of law in the first place, the acquisition presents a dilemma. On one hand, the deal means that the nationalization virus is spreading to infect another company in a different industry, ensuring that yet more business decisions are driven by political, rather than economic, considerations. (Although, to acknowledge the efforts of Messrs. Bush, Paulson, Obama, Dodd, Frank and others, politics already reigns supreme in the consumer finance industry.) One has to wonder what exemptions, loopholes, and carve-outs might be in store for AmeriCredit, as the administration crafts regulations to implement the just-passed “financial reform” legislation.
And Senator Chuck Grassley (R-IA), who questioned and brought attention to some of GM’s hyperbolic claims about its performance earlier this year, raised fresh doubts about the latest move:
If GM has $3.5 billion in cash to buy a financial institution, it seems like it should have paid back taxpayers first. After GM’s experience with GMAC, which left GM seeking a taxpayer bailout, you have to think the company and, in turn, the taxpayers would be better off if GM focused on making cars that people want to buy and stayed clear of repeating its effort to make high-risk car loans.
Fordham Criticized Again
Great stuff by Jay Greene this morning on yesterday’s Fordham Institute victory dance. Greene rips into the notion that conservatives should support standardization of every American kid, and even dares attack Fordham’s calculation that on “the right” only about six government-loathing libertarians have fought national standards.
Perhaps most important, while I explained (yet again) why the Fordham folks and other big-government conservatives will never get the sustained high standards they want out of a government monopoly, Jay nailed the even more fundamental point:
The real divide here is between people who think that policies are best when decisions are decentralized and choice and competition are enhanced versus people who think that there is a “right way” that should be imposed centrally and should constrain choice and competition.
Unfortunately for Fordham, whether we’re comparing the U.S. to the Soviet economy, or educational freedom to government schooling, choice and competition win every time. Every time, that is, except in political decisions like adopting national standards.
The Nation’s Worst State Attorneys General
Our friends at the Competitive Enterprise Institute have released a new report on the worst state attorneys general in the country. Despite Eliot Spitzer no longer being eligible for consideration, six attorneys general comprise the worst-in-the-nation list:
1. Jerry Brown, California
2. Richard Blumenthal, Connecticut
3. Drew Edmondson, Oklahoma
4. Patrick Lynch, Rhode Island
5. Darrell McGraw, West Virginia
6. William Sorrell, Vermont
The report, authored by Hans Bader (who will be contributing an article to this year’s Cato Supreme Court Review), uses several criteria for determining who made the list of shame: ethical breaches and selective applications of the law; fabricating law; usurping legislative powers; and predatory practices (such as seeking to regulate out-of-state businesses that broke no state law).
CEI’s press release explains the pick for number one baddie:
California’s Jerry Brown topped the list for misdeeds like refusing to defend certain state laws he disliked. One example was Proposition 8, a lawfully-adopted amendment prohibiting gay marriage — a law upheld by the state Supreme Court. “Personally, I opposed Prop 8,” said Bader, “but it’s clear, by definition, that a provision of the state constitution cannot violate that very constitution; and it’s the duty of the attorney general to defend it.”
Hans explains his reasoning further in this op-ed. Get the full report here.
Cybertormenting Now Illegal in Louisiana
Louisiana has a new law on the books that outlaws “any electronic textual, visual, written, or oral communication with the malicious and willful intent to coerce, abuse, torment, or intimidate a person under the age of eighteen.”
This is a statute aimed at “cyberbullying,” the increasingly common use of text messages and social media as a vehicle for teenage taunting. The issue caught its first big headlines with the Lori Drew case. The case against the Missouri woman hailed into court in California for suicide-inducing internet harassment was a stretch of an existing federal statute that was ultimately thrown out. The government continues to contend that violating a website’s terms of service is a federal crime.
The federal cyberbullying statute proposed last year was a monstrosity. Felony time (up to two years) for a statute that will primarily be used against minors is excessive. There is no dedicated federal juvenile justice system, and this is not a good excuse to create one. Harvey Silverglate, Cato Adjunct Scholar and author of Three Felonies a Day: How the Feds Target the Innocent, testified at the hearings last fall.
The state laws aimed at cyberbullying are generally less onerous than the proposed federal one. The crime is a misdemeanor, and offenders under the age of seventeen are directed to the juvenile justice system. As Eugene Volokh points out, this law is still pretty bad:
Would publishing an online editorial — or a blog post — condemning an underage criminal for his crimes qualify as “malicious and willful intent to … abuse [or] torment”? Or would it not be “malicious” because it would be justified by righteous indignation (in which case I take it courts would have to decide what indignation is righteous and what is not)? Note that the law isn’t limited to messages sent only to the target, but includes speech published to the world at large as well.
Would sending a message castigating an ex-lover for cheating (assuming both the ex-lover and the sender are 17) qualify as “malicious and willful intent to … abuse [or] torment”? What if the message “speak[s] insultingly, harshly, and unjustly” (unjustly, that is, in the view of the judge), which is the dictionary definition of “abuse” that seems most relevant to speech?
So either the law is too broad, or it will be narrowed only by reading “malicious” as limited to speech that courts dislike — which raises the risk of impermissible content and viewpoint discrimination. And until the narrowing takes place (and maybe even after that), the law will be remarkably vague.
The exception for religious speech is also probably unconstitutional, because it treats nonreligious speech worse than religious speech. Cf. R.A.V. v. City of St. Paul (holding that content-based distinctions are presumptively unconstitutional even when they operate within an unprotected category of speech).
Volokh has provided excellent coverage of the development of this law — from proposal, to adoption, and even the scrivener’s error that purports to protect free speech from cyberbullying charges via the state constitution’s right-to-bail provision. He coined the “cybertormenting” term as well, which has the rhetorical flair appropriate for a legislative overreach of this magnitude.
Fordham Institute 1, Education 0
On NRO today, the Fordham Institute’s Chester Finn and Michael Petrilli take a little time to gloat about the continuing spread of national education standards. In addition, as is their wont, they furnish hollow pronouncements about the Common Core being good as far as standards go, and ”a big, modernized country on a competitive planet” needing national standards. Oh, and apparently having counted the opponents of national standards on “the right,” they note that there are just “a half-dozen libertarians who don’t much care for government to start with.”
Now, there are more than six conservatives and libertarians who have fought national standards. But Finn and Petrilli are sadly correct that most conservatives haven’t raised a finger to stop a federal education takeover — and this is a federal takeover – that they would have screamed bloody murder about ten years ago. There are many reasons for this, but no doubt a big one is that too many conservatives really are big-government conservatives committed, not to constitutionally constrained government, but controlling government themselves. If they think they can write the national standards, then national standards there should be.
These kinds of conservatives just never learn. As I have explained more times than I care to remember, government schooling will ultimately be controlled by the people it employs because they are the most motivated to engage in education politics. And naturally, their goal will be to stay as free of outside accountability as possible!
This is not theoretical. It is the clear lesson to be learned from the failure of state-set standards and accountability across the country — not to mention decades of federal education impotence – that Fordhamites constantly bewail. Indeed, Finn and Petrilli lament it again in their NRO piece, complaining that “until now…the vast majority of states have failed to adopt rigorous standards, much less to take actions geared to boosting pupil achievement.” And why is this? Politics! As they explained in their 2006 publication To Dream the Impossible Dream: Four Approaches to National Standards and Tests for America’s Schools:
The state standards movement has been in place for almost fifteen years. For almost ten of those years, we…have reviewed the quality of state standards. Most were mediocre-to-bad ten years ago, and most are mediocre-to-bad today. They are generally vague, politicized, and awash in wrongheaded fads and nostrums.
At this point, I really have nothing new to say. That political reality will gut national standards while making the public schooling monopoly even worse is clear if you’re willing to acknowledge it. Regretably, the folks at Fordham — and many conservatives — just aren’t. So congratulations on your victory, Fordham. To everyone else, my deepest condolences.
Uncle Sam Kicks Out Legal Immigrants for Down Profits in Recession
And now another story about the inanities of our immigration non-system. Two Britons, Dean and Laura Franks, have run a restaurant in Maine for nearly ten years. Fine, upstanding people who contribute to the economy and whose business is apparently much beloved in their town.
The problem is that the economic downturn decreased the restaurant’s profits, to a level where the “investment” they’re making in the country is too “marginal” to warrant renewal of their E-2 visa (one of the few immigration statuses I have not had). Yes, that’s right, the business is making a profit, employing people, creating wealth, nobody’s a drag on the welfare state or law enforcement, but… not enough. The feds say shut it down.
Unbelievable. At least the Franks can continue their fight to stay in their adopted country from a place more welcoming of productive members of society who happen to be foreigners: Canada.
The ‘Public Option’ Is Back
That didn’t take long at all. Left-wing congresscritters have (re-)introduced legislation to create a “public option” in ObamaCare‘s health insurance exchanges.
The Congressional Budget Office scores the bill as reducing federal deficits by $53 billion by 2019. How? Paying doctors and hospitals less! Put that on a bumper sticker! The public option would use Medicare’s price and exchange controls to pay doctors and other health care providers 5 percent more than Medicare does. Except for prescription drugs: the public option would, ahem, “negotiate” those prices, meaning it would use a separate price-control scheme and pay less than Medicare does. (That means PhRMA probably won’t be bankrolling the public-option campaign the way it bankrolled the pro-ObamaCare campaign and is bankrolling the re-election bids of its congressional benefactors.) Providers, such as community hospitals, would take a huge pay cut if some of their privately-insured patients suddenly only paid Medicare plus 5 percent.
When costs explode under ObamaCare the way they are exploding under RomneyCare, expect the public option to be the Left’s go-to solution. In CongressDaily, co-sponsor Rep. Raul Grijalva (D-Ariz.) says:
By reintroducing it, we make sure that people don’t forget this is a viable option…. I think as the health bill is implemented, more and more people are going to come to the realization that cost containment and competition aren’t as robust as they should be, because of the absence of the public option.
Naturally. Because the first thing that comes to mind when I think cost-containment and competition is government health care programs.
For a refresher on how the Left confuses cost-containment with spending-containment — and on why the public option is a really, really, really bad idea — see my paper, “Fannie Med? Why a ‘Public Option’ Is Hazardous to Your Health.”
No Cheers for Title IX
For supporters of Title IX, it’s time to put down the pom-poms.
From the start, Title IX has been an unnecessary and destructive imposition of government and bureaucracy into college sports, substituting regulation and litigation for the free choices of women and men. But yesterday’s ruling that competitive cheerleading isn’t a sport — a decision worth reading just for its brilliant illustration of the torturous athlete-accounting and word-parsing Title IX demands – highlights how truly absurd it has become.
For one thing, tell the women (and men) in competitive cheer that it isn’t a sport – most would probably beg to differ. Much more important, when we have judges ruling what does or does not constitute a sport we have clearly given up way too much freedom in our supposedly free society. Finally, the very basis for Title IX – the notion that women will be systematically and unfairly barred from various activities by misogynistic colleges — just makes no sense, especially today. The fact is, women make up the very large majority of college students, and hence can dictate terms to schools. At least, they can dictate terms if schools want to keep competing in the sport we call “staying in business.”
Which brings us to what probably really scares Title IX fans: Women almost certainly don’t want to participate in intercollegiate athletics as much as men do, a likelihood evidenced by everything from hugely greater male participation in open-access intramural sports, to men choosing ESPN and women choosing Facebook while on the Web. The problem, of course, is that to admit that would be to lose the ability to push schools around with the big ol’ federal government.
“Either the Most Honest Politician in the World or the Most Opportunistic”
Paul Waldie at Toronto’s Globe and Mail reports on the case of Mike Reilly, who (unsuccessfully so far) has sought to write off as tax expenses the costs of campaigning for local office in a suburb of Vancouver. Reilly told a tax court that there was nothing idealistic about his quest for government office: he wanted “to earn a good salary and promote his business,” raising the visibility of his development company. Lawyers for the Canada Revenue Agency insisted that Reilly wouldn’t have gone to the trouble of running unless he had cared about at least some public issues, but he disputed that:
“You know, I don’t recall being passionate about any issues other than seizing an opportunity to step in and develop a better profile for myself,” Mr. Reilly replied. “No. It was strictly business for me.”
The tax judge ruled against Reilly based on accounting issues but accepted his general contention that he “was not passionate about any issue except increasing his own profile and earning the salary of mayor,” noting that the candidate “did not listen to the citizens of Delta and did not appear to have much interest in their concerns.” If all politicians had to tell the truth, how many similar confessions might we hear?
DHS FOIbles
The Associated Press is reporting that persons filing requests under the Freedom of Information Act (FOIA) with the Department of Homeland Security during the last year faced scrutiny beyond what the law requires.
Career employees were ordered to provide Secretary Janet Napolitano’s political staff with information about the people who asked for records — such as where they lived, whether they were private citizens or reporters — and about the organizations where they worked.
If a member of Congress sought such documents, employees were told to specify Democrat or Republican.
This, despite President Barack Obama’s statement that federal workers should “act promptly and in a spirit of cooperation” under FOIA, and Attorney General Eric Holder’s assertion: “Unnecessary bureaucratic hurdles have no place in the new era of open government.”
The White House separately reviewed FOIA requests to see documents about spending under the $862 billion stimulus law. Read the whole thing.
Co-opting the Anti-Spenders
Voters who recognize the need to make major cuts to federal spending and think returning Republicans to power will accomplish this feat could be in for a big disappointment. Recent comments to the Washington Post made by former Senate majority leader Trent Lott (R-MS) make it clear that anti-spending candidates elected in November will be fighting against their own party — not just the Democrats.
From the article:
Former Senate majority leader Trent Lott (R-Miss.), now a D.C. lobbyist, warned that a robust bloc of rabble-rousers spells further Senate dysfunction. “We don’t need a lot of Jim DeMint disciples,” Lott said in an interview. “As soon as they get here, we need to co-opt them.”
Lott actually provided one of the more memorable moments in my career as a Senate staffer. The scene took place in the office of Sen. Jeff Sessions (R-AL) at a regular meeting of “conservative” Republican senators to discuss politics and policy. The setting was several months before the 2006 fall elections in which voters sent the Republican majority packing.
Sen. Tom Coburn (R-OK), who I was working for at the time, was pleading with his colleagues to make a last ditch effort to cut spending. Coburn argued, correctly, that voters were fed up with Republican profligacy. In the midst of the discussion, Trent Lott entered. Strolling about the office while chomping on snacks, Lott dismissed Coburn’s suggestion in his good-ole-boy southern style.
Instead, Lott said the Republicans needed to tell voters that putting the Democrats in charge of post-911 America would leave the country vulnerable to terrorist attacks. In other words, Lott’s solution was to scare voters into keeping the Republicans in charge.
Lott might be gone, but the current GOP leadership seems to share the same aversion to actually reforming government. They will attempt to “co-opt” candidates who come to Washington on an anti-spending platform. (See my post on Republican minority leader Mitch McConnell (R-KY)).
In a recent Washington Times piece, John Ellis makes a compelling case for why 2010 is not going to be a replay of 1994:
Nobody can doubt that House Minority Leader John A. Boehner and Senate Republican Leader Mitch McConnell are good and loyal Republicans, but they lack everything that made Mr. Gingrich the author of success in 1994. Both are passive and timid and lack the drive and energy a real leader needs. Both are primarily managers rather than public voices of their caucuses. Neither can dominate a TV screen as Mr. Gingrich could, and neither is able to capture the public’s attention by focusing issues sharply and succinctly. Mr. Boehner is a wooden personality devoid of Mr. Gingrich’s charisma, and the slogan: “Boehner for Speaker,” which is beginning to appear, is hardly inspiring. Mr. McConnell is amiable but retiring, never arresting or incisive.
Indeed, the current Republican leadership bemoans the Obama administration’s reckless big spending and deficits. But other than complain and insist that the president should “pay for” additional spending, the GOP leadership has given no evidence that it recognizes — or even believes — that we actually need a smaller government.
Instead, the GOP has trotted out timid half-measures that they think will play well to the country’s anti-spending mood, but that would actually accomplish very little.
And Your Point Is?
Matthew Yglesias is somehow offended by my recent post about the huge decline in the productivity of our socialized transit industry since 1970. He never addresses or even acknowledges any of the arguments made in my article. Instead, his problem is that the article “fails to acknowledge any government role in promoting the usage of private automobiles.” Since my article was about transit, not automobiles, I don’t see why I need to acknowledge government’s role in driving any more than I should acknowledge government’s role in our failed education system or any other government failing.
It could be that Yglesias is arguing that I am somehow inconsistent because I object to socialized transit without objecting to socialized highways. If so, he would be wrong: In books, papers, and policy statements I have argued that highways should be funded out of user fees, not taxes; that states should encourage private highway construction; and that the federal government should get out of the highway business. That isn’t in any way inconsistent with my article on transit.
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