Archive for October, 2010
Private Ownership of Public Law
Carl Malamud is a breakthrough thinker and doer on transparency and open government. In the brief video below, he makes the very interesting case that various regulatory codes are wrongly withheld from the public domain while citizens are expected to comply with them. It’s important, mind-opening stuff.
It seems a plain violation of due process that a person might be presumed to know laws that are not publicly available. I’m not aware of any cases finding that inability to access the law for want of money is a constitutional problem, but the situation analogizes fairly well to Harper v. Virginia, in which a poll tax that would exclude the indigent from voting was found to violate equal protection.
Regulatory codes that must be purchased at a high price will tend to cartelize trades by raising a barrier to entry against those who can’t pay for copies of the law. Private ownership of public law seems plainly inconsistent with due process, equal protection, and the rule of law. You’ll sense in the video that Malamud is no libertarian, but an enemy of an enemy of ordered liberty is a friend of liberty.
National Standards to Help Crush Annoying Dissenters
One of the most regrettable outcomes of government schooling is constant, wrenching conflict as diverse people are forced to fight over the uniform school system they all have to support. Sadly — and in complete opposition to the foundational American value of individual liberty — one of the few ways these conflicts can be resolved is by crushing groups with insufficient political power, keeping them from getting the education they want for their children.
Unfortunately, making it easier to do exactly that seems to have motivated at least some people in Kansas to support their state’s adoption of federally backed “Common Core” standards. Under the guise of removing politics from public schooling – meaning, crippling the ability of those who disagree with them to fight back — some supporters are lauding the standards especially if they are extended to science. Then, the state wouldn’t have to deal with the highly divisive question of how to teach human origins. The assumption, it seems, is that by adopting national standards evolution skeptics in Kansas would be overruled not just by evolution supporters in Kansas, but, de facto, supporters nationwide:
The movement toward national standards — the Kansas State Board of Education joined the program earlier this month — comes with plenty of advantages, said Rick Doll, superintendent of the Lawrence school district.
Among them is snuffing the likelihood of political flare-ups, such as the off-and-on debate over whether Kansas should de-emphasize the teaching of evolution in public schools.
“What we teach in school should not be dependent on the political leanings of a governing body,” Doll said. “With this, there’s less chance of that happening.”
Whether you are the most zealous creationist or the ardent Darwinist, this thinking should frighten you.
For one thing, having national standards will only push the fighting to the national level, threatening to tear apart the entire country with conflicts that could have been contained within state or district boundaries. Moreover, the fighting is likely to be even more intense, because with national standards there’s nowhere to go but out of the country if you lose. And that raises what should be the most alarming point for national-standards advocates: What happens if and when you are not in power? Then everyone will get stuck with not only what you dislike, but what, if you are right, might even be educationally or socially dangerous. But you’ll only have yourself to blame. After all, you’ll have built the nuke suddenly pointing at you.
P. J. O’Rourke — in Print, on the Radio, and in Person
P. J. O’Rourke, Cato’s H. L. Mencken Research Fellow, is touring the country to talk about his new book, Don’t Vote: It Just Encourages the Bastards. Today he has a commentary on NPR. And the day after the election, he’ll be discussing the book and no doubt the election results at a Cato Book Forum.
You can find more book signings and media appearances at www.pjourke.com.
Marijuana and Freedom
Looking to election day and California’s vote on a marijuana legalization initiative, I have some comments on “the right to control your body” at Britannica Blog:
People have rights that governments may not violate. Thomas Jefferson defined them as the rights of life, liberty, and the pursuit of happiness. When I’m asked what libertarianism is, I often say that it is the idea that adult individuals have the right and the responsibility to make the important decisions about their own lives. More categorically, I would say that people have the right to live their lives in any way they choose so long as they don’t violate the equal rights of others. What right could be more basic, more inherent in human nature, than the right to choose what substances to put in one’s own body? Whether we’re talking about alcohol, tobacco, herbal cures, saturated fat, or marijuana, this is a decision that should be made by the individual, not the government. If government can tell us what we can put into our own bodies, what can it not tell us? What limits on government action are there?
It’s part of a symposium on Proposition 19 and marijuana.
Jerry Brown’s Charter Schools ‘Among the Top’?
When Jerry Brown touts his record on education on his campaign website, he starts by citing the two charter schools he founded, calling them “among the top-performing schools in Oakland.” They aren’t — not when measured by academic achievement, at any rate.
The chart below shows the percentage of students in Brown’s two charter schools who score at or above the “proficient” level on the California Standards Tests (averaged across all available grades and subjects). The results are broken out a few different ways to show that they are not particularly sensitive to demographics.
Far from being “among the top,” Jerry Brown’s schools are marginally lower-scoring than the abysmal Oakland Public Schools, and fantastically far below the city’s real top performers: the American Indian Public Charter Schools network (3 schools) and the Oakland Charter Academies (2 schools).
Another of Mr. Brown’s campaign website claims is more credible: “I have gained first-hand experience in how difficult it is to enable all students to be ready for college and careers.” Perhaps if Mr. Brown had taken the time to learn from and emulate the two charter school networks that are already achieving that goal in his own backyard, Californians would have greater confidence in his education policy acumen.
Liberal Dogma on Social Security Redux
Liberal posturing on Social Security reform continues unabated – betraying nervousness that Obama’s Deficit Reduction Commission will recommend Social Security benefit cuts.
Left-wing voices also continue to repeat the mantra that introducing private Social Security accounts would be a bad idea. Ronald Brownstein’s recent recent column in the National Journal is a case in point. However, Brownstein’s readers may come away thinking that he believes breaking promises is a good idea.
Brownstein concedes that “Social Security indeed faces a long-term imbalance between expected revenue and promised benefits.” I consider this to be progress — at least relative to the erstwhile “there’s nothing wrong and nothing to fix” mantra adopted by liberal adherents of the status quo on Social Security.
Notice Brownstein’s use of the term “promised benefits.” A promise implies a commitment and obligation to make good on future benefit payments. But the solution that Mr. Brownstein points to is as follows:
Instead [of private accounts], Obama argued, the two parties could emulate the Reagan model and arrive at a sensible solution… [T]he program’s long-term shortfall could be eliminated just by trimming benefits for the top half of earners [JG note: breaking the Social Security benefit promise here], linking the retirement age to lengthening life spans [JG note: breaking the promise here too], and imposing a partial payroll tax on earnings above $250,000 [JG note: that is, promise more benefits by expanding the definition of covered earnings and increasing payroll taxes on high earners].”
But all that the last element may achieve is to stave of the program’s insolvency for a few more years.
My comment: Please don’t drag Reagan into this “solution.” The 1983 reforms were implemented under the gun, at a time when there was no way out of Social Security’s imminent revenue shortfall. If President Reagan had enjoyed the luxury of a couple more years to plan changes to Social Security, he would have adopted a different approach, and be much better off today. According to broad market indexes such as the S&P 500, total returns averaged well above 10 percent per year during the 1980s and 90s – so, well above inflation. (The first decade of the 2000s yielded a negative 1 percent return.)
This Week in Government Failure
Over at Downsizing Government, we focused on the following issues this week:
- When given the choice, people overwhelmingly entrust their donations to private charities, not the government.
- The federal government is still facilitating zero-downpayment mortgages.
- Federal Reserve employee pay soars.
- Office of Personnel Management director John Berry doesn’t appreciate the fact that regular Americans aren’t enthusiastic about funding generous pay and benefits for federal workers.
- Congresswoman Corrine Brown takes the parochial mindset to a new level by using her power to enrich her own family at taxpayer expense.
Fear Can Affect Thinking, But Not This Time
In his Washington Post op-ed this morning, “Obama Underappreciation Syndrome,” Charles Krauthammer mocks President Obama’s latest explanation for his, and his party’s, low popularity. “[W]e’re hard-wired not to always think clearly when we’re scared. And the country is scared,” explains the president.
This is rich loam for derision. “Opening a whole new branch of cognitive science — liberal psychology — Obama has discovered a new principle: The fearful brain is hard-wired to act befuddled, i.e., vote Republican.”
Krauthammer rightly takes the campaigning president to task. But he scopes his critique a bit broadly. It’s pretty close to uncontroversial that the logic centers of the brain shut down when certain stimuli produce a fright response. That’s good. Leaping at the sight of a snake was an important part of surviving in the thousands of years before ambulances and anti-venom.
But not all stresses produce this response, and President Obama is misapplying the fright response to the current climate of unemployment, expanded government control of society, and galloping spending and debt. The fear response doesn’t explain Democrats’ unpopularity.
But it does explain other parts of our policy discourse. There is at least a good argument—one we featured in our book Terrorizing Ourselves—that fear preempts careful, rational cogitation about some risks. The existence of another human animated to kill you in ways you can’t predict can interfere with the mental responses we need to secure both ourselves and the blessings of liberty. There may be chronic fear-based habits; the brain grows to meet the demands of its host.
But none of this relates to the economic and political stresses of today or the related woes of the Democratic Party. Rather, it is economic and political conditions that voters are responding to, in a manner that is by no means illogical or pathological.
This Just In: People Engaged in Politics!
The New York Times devotes major space today to a story disclosing campaign spending by the U.S. Chamber of Commerce. They have uncovered some pretty shocking stuff. Apparently the Chamber of Commerce is raising money from businesses to fund campaign ads. The Times has the goods:
[A] review of the nearly 70 chamber-produced ads found that 93 percent of those that have run nationwide that focus on the midterm elections either support Republican candidates or criticize their opponents.
What is the world coming to? An organization can raise money and use it to support or criticize candidates for office? It’s almost like we have freedom of political speech in the United States. Shocking stuff.
The New York Times may not like freedom of speech much for those who disagree with its editorial line, but I am happy we have freedom of the press as well as of speech. The freedom of the press means I can get additional information about the funding of the current election.
The Wall Street Journal reports that the American Federation of State, County and Municipal Employees (AFSCME), a leading union of government employees, has raised and will spend the most money on the mid-term election. More shocking stuff!
AFSCME is spending money to support Democrats who in turn will be expected to tax and spend to add or to save … jobs for public employees! I thought businesses were the only organizations that engaged in self-interested politics. Apparently not.
But AFSCME has the right to raise and spend the $90 million, and so did George Soros, and so does every misguided and hapless person and organization that for some reason disagrees with me about everything. Freedom of speech does not mean the “freedom” to agree with me or the New York Times.
In sum, the silly season is upon us as election day looms. Be prepared for more “news reporting” about the demons that are “undermining our democracy.” And give thanks that we don’t have to depend on just one source of news or speech in coming to judgment on those who hold political power.
Earmarked for Corruption
Florida Times-Union reporter Matt Dixon deserves kudos for his detailed exposé of Congresswoman Corrine Brown’s (D-FL) corruption-tainted earmarking. Since 2008, Brown has sought millions for a non-profit in Jacksonville that employs a lobbying outfit that just happens to have Brown’s daughter Shantrel on its staff.
Brown and her daughter have tried to secure $1.1 million for “streetscape improvements and renovations” at a plaza leased by the non-profit. Rep. Brown is currently requesting a direct appropriation of $1 million for it, but interestingly says on her website that “I certify that neither I nor my spouse has any financial interest in this project.” Okay, but what about her daughter?
As the article explains, this isn’t the first time the Browns have collaborated at taxpayer expense:
The Community Rehabilitation Center is not the only client of her daughter’s that Brown has helped.
In 2006, she traveled to the Republic of Georgia shortly before natural gas importer Itera had stopped supplying portions of the country with gas due to $6 million in non-payments. Over an eight-month period that year, Itera paid Shantrel Brown and one other Alcalde and Fay lobbyist more than $80,000 to work on “international debt issues,” lobbying reports indicate.
The Russian company, which has its U.S. headquarters in Jacksonville, has filed 31 separate federal lobbying reports since 2005. It used Shantrel Brown only during the eight months in 2006.
In a separate 1999 incident involving her daughter, Brown was investigated by an ethics subcommittee after a $50,000 Lexus purchased by African banker Karim Pouye wound up registered in Shantrel’s name. Corrine Brown had lobbied to keep Pouye’s boss, West African millionaire Foutanga Dit Babani Sissoko, out of federal prison after he was accused of stealing $240 million from a bank in the United Arab Emirates. The money wound up in Miami bank accounts controlled by Sissoko. The subcommittee took no action, but in its written report was critical of the Lexus.
FCC and its Technological Advisory Council: Shut Them Down and Use the Money to Reduce Debt
The Federal Communications Commission has established a new advisory group called the “Technological Advisory Council.” Among other things, it will advise the agency on “how broadband communications can be part of the solution for the delivery and cost containment of health care, for energy and environmental conservation, for education innovation and in the creation of jobs.”
This is an agency that is radically overspilling its bounds. It has established goals that it has no proper role in fulfilling and that it has no idea how to fulfill. As we look for cost-cutting measures at the federal level, we could end the pretense that the communications industry should be regulated as a public utility. Shuttering the FCC would free up funds for better purposes such as lowering the national debt or reducing taxes.
The IRS’s Tax Rate on Google’s Foreign-Source Income Is 2.4 Percentage Points Too High
There’s been considerable attention to the news that the IRS only managed to grab 2.4 percent of Google’s overseas income. As this Bloomberg article indicates, many statists act as if this is a scandal (including a morally bankrupt quote from a Baruch College professor who thinks a company’s lawful efforts to lower its tax liability is “evil” and akin to robbing citizens).
Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. Google’s income shifting — involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” — helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries. …Google, the owner of the world’s most popular search engine, uses a strategy that…takes advantage of Irish tax law to legally shuttle profits into and out of subsidiaries there, largely escaping the country’s 12.5 percent income tax. The earnings wind up in island havens that levy no corporate income taxes at all. Companies that use the Double Irish arrangement avoid taxes at home and abroad as the U.S. government struggles to close a projected $1.4 trillion budget gap and European Union countries face a collective projected deficit of 868 billion euros. …U.S. Representative Dave Camp of Michigan, the ranking Republican on the House Ways and Means Committee, and other politicians say the 35 percent U.S. statutory rate is too high relative to foreign countries. …Google is “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” said Abraham J. Briloff, a professor emeritus of accounting at Baruch College in New York who has examined Google’s tax disclosures. “Who is it that paid for the underlying concept on which they built these billions of dollars of revenues?” Briloff said. “It was paid for by the United States citizenry.”
Congressman Dave Camp, the ranking Republican (and presumably soon-to-be Chairman) of the House tax-writing committee sort of understands the problem. The article mentions that he wants to investigate whether America’s corportate tax rate is too high. The answer is yes, of course, as explained in this video, but the bigger issue is that the IRS should not be taxing economic activity that occurs outside U.S. borders. This is a matter of sovereignty and good tax policy. From a sovereignty persepective, if income is earned in Ireland, the Irish government should decide how and when that income is taxed. The same is true for income in Bermuda and the Netherlands.
From a tax policy perspective, the right approach is “territorial” taxation, which is the common-sense notion of only taxing activity inside national borders. It’s no coincidence that all pro-growth tax reform plans, such as the flat tax and national sales tax, use this approach. Unfortunately, America is one of the world’s few nations to utilize the opposite approach of “worldwide” taxation, which means that U.S. companies face the competitive disadvantage of having two nations tax the same income. Fortunately, the damaging impact of worldwide taxation is mitigated by a policy known as deferral, which allows multinationals to postpone the second layer of tax.
Perversely, the Obama Administration wants to undermine deferral, thus putting American multinationals at an even greater disadvantage when competing in global markets. As this video explains, that would be a major step in the wrong direction. Instead, policy makers should junk America’s misguided worldwide system and replace it with territorial taxation.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
