Archive for December, 2010
Divided Government on Afghanistan
The Obama administration apparently plans to issue a positive Pentagon review of the war in Afghanistan. Alas, this assessment evidently is not shared by U.S. intelligence agencies.
As President Obama prepares to release a review of American strategy in Afghanistan that will claim progress in the nine-year-old war there, two new classified intelligence reports offer a more negative assessment and say there is a limited chance of success unless Pakistan hunts down insurgents operating from havens on its Afghan border.
The reports, one on Afghanistan and one on Pakistan, say that although there have been gains for the United States and NATO in the war, the unwillingness of Pakistan to shut down militant sanctuaries in its lawless tribal region remains a serious obstacle. American military commanders say insurgents freely cross from Pakistan into Afghanistan to plant bombs and fight American troops and then return to Pakistan for rest and resupply.
The findings in the reports, called National Intelligence Estimates, represent the consensus view of the United States’ 16 intelligence agencies, as opposed to the military, and were provided last week to some members of the Senate and House Intelligence Committees. The findings were described by a number of American officials who read the reports’ executive summaries.
Obviously, any predictions about the future course of the Afghan war should be taken with a couple shakers of salt. However, the fact that the U.S. remains at war nine years after intervening suggests that pessimism is the most realistic perspective.
That certainly was the reaction of Malou Innocent and me after visiting Afghanistan earlier this year. Even if the military has figured out the best strategy for fighting the Taliban, there is no competent and honest Afghan partner to replace the Taliban. The Karzai government is as likely to impede as aid Washington’s efforts. The U.S. cannot afford to sacrifice more lives and money in what has devolved into yet another attempt at nation-building that fails to advance Amerca’s security.
Bill of Rights Day
Since today is Bill of Rights Day, it seems like an appropriate time to pause and consider the condition of the safeguards set forth in our fundamental legal charter.
Let’s consider each amendment in turn.
The First Amendment says that Congress “shall make no law … abridging the freedom of speech.” Government officials, however, insist that they can enact laws concerning television and radio broadcasting, and even pamphlets!
The Second Amendment says the people have the right “to keep and bear arms.” Government officials, however, insist that they can make it a crime to keep and bear arms.
The Third Amendment says soldiers may not be quartered in our homes without the consent of the owners. This safeguard is doing well–so we can pause briefly here for a laugh.
The Fourth Amendment says the people have the right to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures. Government officials, however, insist that they can treat airline travelers like prison inmates by conducting virtual strip searches and crotch inspections.
The Fifth Amendment says that private property shall not be taken “for a public use without just compensation.” Government officials, however, insist that they can take away our property and give it to others who covet it.
The Sixth Amendment says that in criminal prosecutions, the person accused shall enjoy a speedy trial, a public trial, and an impartial jury trial. Government officials, however, insist that they can punish people who want to have a trial. That is why 95% of the criminal cases never go to trial.
The Seventh Amendment says that jury trials are guaranteed even in petty civil cases where the controversy exceeds “twenty dollars.” Government officials, however, insist that they can impose draconian fines against people without jury trials.
The Eighth Amendment prohibits cruel and unusual punishments. Government officials, however, insist that jailing people who try in ingest a life-saving drug is not cruel.
The Ninth Amendment says that the enumeration in the Constitution of certain rights should not be construed to deny or disparage others “retained by the people.” Government officials, however, insist that they will decide for themselves what rights, if any, will be retained by the people.
The Tenth Amendment says that the powers not delegated to the federal government are to be reserved to the states, or to the people. Government officials, however, insist that they will decide for themselves what powers are reserved to the states, or to the people.
It’s a depressing snapshot, to be sure, but I submit that the Framers of the Constitution would not have been surprised by the relentless attempts by government to expand its sphere of control. The Framers themselves would often refer to written constitutions as mere “parchment barriers” or what we would describe as “paper tigers.” They nevertheless concluded that putting safeguards down on paper was better than having nothing at all. And lest we forget, that’s what millions of people around the world have — nothing at all.
Another important point to remember is that while we ought to be alarmed by the various ways in which the government is attempting to go under, over, and around our Bill of Rights, the battle will never be “won.” The price of liberty is eternal vigilance. To remind our fellow citizens of their responsibility in that regard, the Cato Institute has distributed more than four million copies of our “Pocket Constitution.” At this time of year, it’ll make a good stocking stuffer.
Finally, to keep perspective, we should also take note of the many positive developments we’ve experienced in America over the years. And for some positive overall trends, go here. Let’s enjoy the holidays but also resolve to be more vigilant about our liberties in 2011.
Unintended Consequences of Money-Laundering Laws, Cont’d
As Dan Mitchell pointed out this morning, proposals to abolish the $100 bill, on the grounds that it’s too easily used in underground-economy activities such as tax evasion and drug dealing, are another instance in which ordinary citizens are called on to sacrifice convenience and privacy to help in the ever-expanding federal fight against “money laundering.” I’ve long been fascinated by the unintended consequences that arise from these laws, especially from the federal “know your customer” rules under which banks (and increasingly other businesses) are required to pry into their customers’ earnings sources, family relationships, overseas ties and other sensitive matters. Those who cannot furnish satisfactory answers — such as Americans who lack a suitable recent domestic credit record because they have long lived as dependents, overseas, or even as nuns in convents — may find that banks turn them away as customers or even freeze their existing accounts. The same is true of established customers who cannot explain a large or irregular series of cash deposits or remittances from abroad to a bank officer’s satisfaction.
A new example of this has emerged this fall, and it’s embarrassing even by the standards of federal government foul-ups. According to a Foreign Policy report last month, no fewer than 37 foreign governments with embassies in the United States are on the brink of losing, or have already lost, access to the routine banking services they need to pay their staff salaries and keep the lights and heat on in their consulates. The reason? These governments cannot prove to the satisfaction of U.S. banks that their accounts are not potentially open to use for illicit money transfers. From the banks’ point of view, there is no particular benefit to be had from an account which is relatively small in the first place — the countries involved are mostly poorer nations, many in Africa, with small embassy staffs — when these are dwarfed by the paperwork costs and potential legal exposures from a misstep.
The consequences for American foreign interests have already been unpleasant, and will become more so if the problem isn’t fixed. Angola, which saw its accounts closed down by Bank of America, has already had to cancel planned national independence day celebrations and has hinted at retaliation against unrelated U.S. companies that happen to do business in Angola. Extend that sort of anger to 37 countries, and some significant international frictions could result.
Now, I have no doubt that some embassy bank accounts, of smaller and bigger countries alike, are pressed into service for improper or even criminal money transfers. (I always assumed the whole point of “diplomatic pouches” was to transfer things back and forth that the host country would have preferred to stop and inspect). But the odds are near zero, I think, that the latest wave of bank refusals-to-deal was somehow a planned or intended consequence of the original federal calls for wide-ranging bank regulation in the name of money-laundering prevention. How many such unintended consequences will the new Dodd-Frank law turn out to have?
If Only the USTR Were This Enthusiastic about Liberalizing Trade
There was really never any doubt that the United States would prevail in the dispute brought by China to the World Trade Organization over President Obama’s decision last year to levy duties on tire imports from China. The WTO verdict, revealed yesterday, simply affirms that the administration acted in accordance with U.S. WTO commitments—and leaves to others, such as myself, to conclude that the duties were a highly political act perpetrated with utter contempt for the significant economic and diplomatic costs of those actions.
Thus, “prevailing” in the WTO case should not be considered a source of universal joy for all Americans or even most Americans, as one might infer from the reaction of U.S. Trade Representative Ron Kirk, who jubilantly proclaimed, “This is a major victory for the United States and particularly for American workers and businesses.” Really, Ambassador Kirk? Tell that to the American workers and businesses involved in importing, trucking, wholesaling, retailing, and installing those Chinese-made tires. Tell it to the American workers and businesses who also happen to be U.S. tire consumers and are now lighter in their wallets or dangerously riding on worn treads as a result of the duties. Feel free to ask the workers and businesses in the U.S. poultry and auto parts industries—against whom the Chinese imposed antidumping duties immediately after the tire tariffs took effect—how they feel about having “prevailed.”
In fairness to Ambassador Kirk, in addition to working to open markets abroad, the USTR’s office is tasked with prosecuting challenges of our trade partners’ allegedly non-compliant policies and actions, as well as defending challenges to allegedly non-compliant U.S. policies and actions at the WTO. In that regard, warding off a challenge from China of the U.S. Section 421 law constitutes, arguably, a victory for the USTR’s office. But to be clear, Section 421 is a blatantly protectionist law that serves, at best, a sliver of the U.S. population slightly broader than the U.S. Congress.
As part of its WTO accession agreement in 2001, China agreed to allow the United States and other WTO members to treat it differently—indeed, discriminatorily—on several matters for a number of years after it joined the WTO. The China-Specific Safeguard mechanism (known legally as Section 421 of the Trade Act of 1974 and under which the tire tariffs were implemented in September 2009) authorizes the United States to impose duties if there is a surge in imports from China that is causing or threatening market disruption in the United States. Market disruption exists “whenever imports of an article like of directly competitive with an article produced by a domestic industry are increasing rapidly, either absolutely or relatively, so as to be a significant cause of material injury, or threat of material injury, to the domestic industry.” In other words, if U.S. industry is suffering the effects of normal competition—that is, if it must compete against more capable or more efficient foreign competitors—then the firms or workers in the U.S. industry can petition the U.S. government to raise those competitors’ prices through the imposition of trade restraints.
It is also important to appreciate what Section 421 is not. Contrary to the rhetoric of too many politicians, trade lawyers, and union bosses, 421 is not an “unfair trade” statute. Unlike the antidumping and countervailing duty laws, a Section 421 case does not include allegations of prices at less than fair value or prices that benefit from countervailable government subsidies. The evidentiary threshold is much lower. All that is alleged-and all that has to be established-in a 421 petition is that imports from China are increasing in such a manner as to be a cause of market disruption (or threat thereof) to the domestic industry.
Section 421 is not intended to remedy any wrongdoing on the part of Chinese exporters, but is intended rather to give U.S. producers the opportunity to holler “time out!” as they catch their breath, assess prospects, and attempt to adjust to a new level of competition. Of course there are huge costs to this kind of intervention in the marketplace, thus the president is granted discretion, under the law, to deny relief if he determines that the costs to the broader economy clearly exceed any benefits to the petitioning industry. While such discretion provides some comfort that the law’s relaxed evidentiary standards won’t be routinely abused by domestic interests seeking to stifle competition, there are no guarantees that the president’s discretion will be based exclusively on considerations of the national economic interest. If there were, it would be nearly impossible to conjure a scenario in which the concentrated, temporary benefits to a specific industry receiving protection were not overwhelmed by the costs of that protection on the broader economy. Political considerations always influence decisions that lead to protection.
Yesterday’s WTO decision was arguably a victory for the rule of law in international trade—but also a reminder that politicians write the rules of trade, including some that are so antithetical to its purpose. I would be willing to cut Ambassador Kirk more slack for his jubilation if he were to find religion on the WTO and abide the rulings–such as on zeroing, gambling, and cotton subsidies–that his (and his predecessors’) office has lost.
Privatizing Roads
A major shortcoming of the deficit reduction plan concocted by the president’s Fiscal Commission is that it assumed that the federal government should continue doing everything it currently does. For example, the plan proposed a 15 cent per gallon increase in the federal gasoline tax to fund infrastructure projects. But why not allow the private sector to play a greater role in financing and maintaining infrastructure like roads?
That’s the topic of a new Reason TV video:
In the video, Bruce Benson explains that America has a strong history of privately-provided roads. Unfortunately, because government has come to dominate road construction, most citizens probably don’t stop to consider that the private sector can provide superior alternatives.
As Benson points out, a chief problem with government roads is that they foster armies of lobbyists and special-interests who agitate for more and more taxpayer money. Policymakers try to steer transportation dollars to their districts and states, which inevitably results in money going to projects that make little economic sense. With a private road, it has to make economic sense or it won’t get built.
Another problem is that the federal government places costly burdens on the state and local recipients of the funds. ABC News recently had story on a new federal regulation – contained in an 800 page book – that requires local governments to change the fonts on their street signs to make them easier to read. The article says that the requirement will cost Milwaukee $2 million alone, or twice the city’s annual traffic control budget.
Not surprisingly, special-interest groups had a hand in getting the federal government to implement the regulation:
The American Traffic Safety Services Association — which represents companies that make signs and the reflective material used on them — lobbied hard for the new rules. And at least one key study used to justify the changes was funded by the 3M Corporation, one of the few companies that make the reflective material now required on street signs.
See this Cato essay for more on why federal highway funding should be abolished.
Take Your Stinking Paws Off My Benjamins You Damn Dirty Statist
Okay, perhaps the title of this post is not quite as memorable as Charlton Heston’s famous line from Planet of the Apes, but it certainly captures my sentiments after reading an article in Slate that calls for the elimination of the $100 bill. The author, Timothy Noah, says that large bills are only for “criminals and sociopaths.” Here’s the crux of his argument.
…why does the U.S. continue to print C-notes…? Technological change has reduced much further the plausible need of any law-abiding American to carry a C-note in his wallet or to stash a pile of C-notes in his mattress.
Noah’s argument is unconvincing for several reasons. First, he is underestimating the degree to which “law-abiding” Americans use “Benjamins.” And with higher inflation almost certainly around the corner, one can safely expect that $100 bills will become even more common in the future. Second, his entire argument rests on the statist assumption that government should restrict honest people because this will somehow make life more difficult for criminals. Yet he debunks his own anti-money laundering argument by noting that the government already has stopped printing larger bills, such as the $500 note. Has that stopped the drug trade? Hello? Anyone? Bueller?
Like much of what government does, the campaign against money laundering is a costly exercise with very few tangible benefits. This video examines the cost-benefit issues.
I actually think the moral arguments against anti-money laundering laws are even more powerful. As Americans, we should have a presumption of innocence in our daily lives. What business is it of government whether we want to carry $20 bills or $100 bills? And think about the implications of these laws. What if the government said we need to ban cars, or put government-monitored homing devices in all vehicles, because bank robbers occasionally use automobiles as getaway vehicles? In this case, there is a theoretical benefit to the policy, just like there is a somewhat plausible case for anti-money laundering laws, but presumably we would reject such a policy as too intrusive.
Anti-money laundering laws are a classic case of bad policy leading to more bad policy. The government passes drug laws that create huge profits for criminals. But rather than getting rid of victimless crimes, the government imposes policies that make life more difficult and costly for everyone else.
Selective Deficit Outrage
Sen. Mark Udall made the national news today with his excoriation of the Senate bill for not raising taxes. “A ticking time bomb,” he said:
“Just over one week ago, the Democratic and Republican chairmen of President Obama’s deficit commission called our national debt a ‘cancer’ that is threatening our country from within. They are right. A massive budget deficit and a crippling national debt are perhaps the most difficult challenges our government faces. As Coloradans know, our national security depends on our economic security – and each is threatened by skyrocketing debt and irresponsible budgeting,” Udall said.
“Days after the most substantive national conversation we’ve had about addressing the debt, the debate suddenly has turned to extending tax breaks for millionaires and billionaires that – alone – will cost $700 billion over the next decade. That’s $700 billion in additional debt that the United States will owe to China and our other creditors around the world – debt that our children and grandchildren will be forced to pay. It’s a ticking time-bomb that needs to be defused.”
Senator Udall has apparently had a Road to Damascus experience on the national debt. After all, he voted for the $787 billion stimulus bill. He voted for the incalculably expensive health care overhaul. He gets an F from the National Taxpayers Union every year, voting only 8 percent of the time in the last session for fiscal restraint. He sponsored bills during the 110th Congress to raise spending by $75 billion a year.
Either he’s only just discovered the national debt problem in the past few weeks, or he thinks spending is not the problem — only a bill to not raise taxes is a “cancer” and “a ticking time-bomb.”
Yes, Madam Speaker, We’re Serious
During the initial legislative debate over ObamaCare, a reporter asked (now-outgoing) House Speaker Nancy Pelosi (D-CA) whether the U.S. Constitution grants Congress the power to compel Americans to purchase health insurance. Pelosi responded, “Are you serious? Are you serious?”
Today, a federal court answered Ms. Pelosi’s question when it declared ObamaCare’s individual mandate unconstitutional.
Here is Pelosi’s statement responding to today’s court ruling in Cuccinelli v. Sebelius:
Pelosi Statement on Affordable Care Act Ruling in Virginia District Court
WASHINGTON, Dec. 13, 2010 /PRNewswire-USNewswire/ – Speaker Nancy Pelosi issued the following statement today after a District Court judge in Virginia ruled one provision of the Affordable Care Act unconstitutional. The judge refused to freeze implementation of the law during the appeals process, meaning Americans already benefitting from health insurance reform — or set to benefit soon — will not be affected:
“Today’s court ruling stands in stark contrast to 14 similar challenges to the Affordable Care Act — in two, federal district judges strongly upheld the law; in the other 12, the challenges have been dismissed.
“Since its enactment, health insurance reform has delivered concrete benefits to millions of Americans. Among provisions already benefitting the American people, it has offered small businesses a tax break to cover their workers, allowed young adults to stay on their parents’ plans until age 26, and provided assistance to seniors struggling to pay prescription drug costs. These changes are good for our middle class, and will not be impacted by this court’s decision to overturn a single provision of the law.
“There have been and will continue to be a wide range of attempts to weaken this law. But as in previous court rulings across the country, I am confident that the Affordable Care Act will ultimately be sustained and will keep benefitting our middle class, our families, and our businesses, indeed every American. In Congress, we will stand firm against attempts to roll back the law, including the Patient’s Bill of Rights and the critical consumer protections enacted by health insurance reform.”
SOURCE Office of the Speaker of the House
Note that Pelosi does not address the constitutional issue.
Good News and Bad on PATRIOT Reform
Late last week, Attorney General Eric Holder sent a letter to Senate Judiciary Committee Chair Patrick Leahy (D-VT) in which he agreed to implement an array of policies designed to check abuse of USA PATRIOT Act powers. These include more thorough record keeping and more disclosures to Congress, prompt notification of telecommunications companies when gag orders have expired, and updated retention and dissemination procedures to govern the vast quantities of information obtained using National Security Letters.
In itself, this is all to the good. But civil libertarians should pause before popping the champagne corks. Last year, the fight over the reauthorization of several expiring PATRIOT provisions opened the door to the comprehensive reform that sweeping legislation sorely needs to better balance the legitimate needs of intelligence and law enforcement against the privacy and freedom of Americans. Despite serious abuses of PATRIOT powers uncovered by the Justice Department’s Office of the Inspector General, no such major changes were made. Instead, Congress opted for a shorter-term renewal that will require another reauthorization this February—in theory allowing for the question of broader reform to be revisited in the coming months.
Many of the milder reforms proposed during the last reauthorization debate now appear to have been voluntarily adopted by Holder. Unfortunately, this may make it politically easier for legislators to push ahead with a straight reauthorization that avoids locking in those reforms via binding statutory language—and entirely bypasses the vital discussion we should be having about a more comprehensive overhaul. If that happens, it will serve to confirm the thesis of Chris Mooney’s 2004 piece in Legal Affairs, which persuasively argued that “sunset” provisions, far from serving as an effective check on expansion of government power, often make radical “temporary” measures more politically palatable, only to create a kind of policy inertia that makes it highly unlikely those measures will ever be allowed to expire.
With the loss of Sen. Russ Feingold (D-WI), who whatever his other faults has been the Senate’s most vocal opponent of our metastasizing surveillance state, the prospects for placing more than cosmetic limits on the sweeping powers granted since 2001 appear to have dimmed. If there’s any cause for optimism, it’s that the recent fuss over intrusive TSA screening procedures appear to have reminded some conservatives that they used to believe in limits on government power even when that power was deployed in the name of fighting terrorism.
The Current Wisdom
The Current Wisdom is a series of monthly posts in which Senior Fellow Patrick J. Michaels reviews interesting items on global warming in the scientific literature that may not have received the media attention that they deserved, or have been misinterpreted in the popular press.
The Current Wisdom only comments on science appearing in the refereed, peer-reviewed literature, or that has been peer-screened prior to presentation at a scientific congress.
History to Repeat: Greenland’s Ice to Survive, United Nations to Continue Holiday Party
This year’s installment of the United Nations’ annual climate summit (technically known as the 16th meeting of the Conference of the Parties to the Framework Convention on Climate Change) has come and gone in Cancun. Nothing substantial came of it policy-wise; just the usual attempts by the developing world to shake down our already shaky economy in the name of climate change. News-wise probably the biggest story was that during the conference, Cancun broke an all time daily low temperature record. Last year’s confab in Copenhagen was pelted by snowstorms and subsumed in miserable cold. President Obama attended, failed to forge any meaningful agreement, and fled back to beat a rare Washington blizzard. He lost.
But surely as every holiday season now includes one of these enormous jamborees, dire climate stories appeared daily. Polar bear cubs are endangered! Glaciers are melting!!
Or so beat the largely overhyped drums, based upon this or that press release from Greenpeace or the World Wildlife Fund.
And, of course, no one bothered to mention a blockbuster paper appearing in Nature the day before the end of the Cancun confab, which reassures us that Greenland’s ice cap and glaciers are a lot more stable than alarmists would have us believe. That would include Al Gore, fond of his lurid maps showing the melting all of Greenland’s ice submerging Florida.
Ain’t gonna happen.
Wikileaks: Galvanizing ‘Cyber-Conservatism’?
Mercatus Center senior research fellow (and Cato alum) Jerry Brito has an interesting Wikileaks post on Tech Liberation Front.
The most vocal and strident reaction against Wikileaks has come from folks we can identify as neocons. Aside from demanding that the U.S. hunt down Julian Assange, Charles Krauthammer wrote, “Putting U.S. secrets on the Internet, a medium of universal dissemination new in human history, requires a reconceptualization of sabotage and espionage — and the laws to punish and prevent them.” Meanwhile Marc Thiessen, ignoring the distributed nature of WikiLeaks, called for the U.S. to “rally a coalition of the willing to defeat WikiLeaks by shutting down its servers and cutting off its finances.” And William Kristol, for his part, asked rhetorically, “Why can’t we disrupt and destroy WikiLeaks in both cyberspace and physical space, to the extent possible? Why can’t we warn others of repercussions from assisting this criminal enterprise hostile to the United States?”
Jerry is kind to these commentators, who will find fighting the Internet like fighting the wind. From the right, they join voices on the left who argue for limitations on Internet communications in the name of privacy and human dignity.
Where do libertarians stand? (Or “cyber-libertarians,” if we must.)
Says Brito,
To me, libertarians simply have a narrower view of what information control is desirable, with harm to individuals as the relevant standard. They also prefer individual choices and self-regulation to state control. And to the extent that state control is unavoidable, they want to ensure robust due process and protection of individual liberties.
ObamaCare Comes Up against the Constitution
Today POLITICO Arena askes:
How badly does today’s ObamaCare ruling set back the Democrat’s signature domestic achievement? Should Tenth Amendment enthusiasts take heart that other federal laws with which state officials disagree can be struck down?
My response:
A quick reading of Judge Henry Hudson’s opinion today striking the “individual mandate” provision of ObamaCare gives hope to those of us who have long urged, more broadly, for a restoration of limited constitutional government. As Judge Hudson put in granting summary judgment to Virginia, “the legislative process must still operate within constitutional bounds.”
The administration had argued that Congress had authority to enact and enforce the individual mandate to buy health insurance under its power to regulate interstate commerce. But Judge Hudson responded that “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.” Indeed, he noted, the administration’s reasoning could apply to “transportation, housing, or nutritional decisions. This broad definition of economic activity [to include inactivity] subject to congressional regulation lacks logical limitation.” The federal government remains, in short, one of delegated, enumerated, and thus limited powers, notwithstanding the leviathan that surrounds us today.
This is a significant setback for the administration, not least because Judge Hudson cites to a similar argument set forth by federal district Judge Roger Vinson in Vinson’s October 14 opinion denying the administration’s motion to dismiss the ObamaCare suit brought against it by 21 states, with more to follow. There will be more litigation on these issues, of course, but for today, at least, the Tenth Amendment and the limited government it implies are alive and well.
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