Archive for March, 2011
Compensating Bone Marrow Donation Isn’t the Same as Selling Organs
On Tuesday, the Los Angeles Times published an editorial critical of the Institute for Justice’s lawsuit against the National Organ Transplant Act’s prohibition of compensation for bone marrow donors. But, as I have written before, Congress has no legitimate authority to interfere with the right to participate in safe, accepted, lifesaving, and otherwise legal medical treatment. Given the lack of bone marrow donors, the congressional overreach here literally costs lives.
The Times editorial board conveniently ignores the constitutional arguments in IJ’s suit, resting their argument on the “what if?” scenario that the poor may be induced to give up major organs, such as kidneys, if the price is right. This misses the point of the suit, because bone marrow is regenerative tissue and thus similar to semen and blood plasma — both of which can be donated for compensation. (Compensated major organ donation is certainly a debate we should have, but it’s not germane here.)
The Times’s argument goes even further, saying that remuneration could induce people to lie about their medical history, citing a recent case in which a man was infected with HIV after a blood transfusion due to a donor lying about his sexual history on his blood donation questionnaire. While that is lamentable, the blame should fall on the (rare) failure of Red Cross screening procedures, as we know they generally rely on more than the honor system to vet their donors — and the people injured can and should be able to seek legal redress against the negiligent parties.
We wish our friends at IJ the best of luck. You can read more about the case here. Cato held a forum on the case you can watch here.
Two-Week Budgets?
Today POLITICO Arena asks:
Are two-week budgets the new normal? The White House and congressional Democrats are looking for longer-term extensions. Are short-term extensions an irresponsible way to conduct the budget process? Or are they an opportunity for congressional Republicans to shrink the federal government, by keeping a tight grip on the nation’s purse strings?
My response:
Well how has the “old normal” worked out? Runaway spending, deficits, and debt as far as the eye can see. If it takes two-week budgets to keep the nation’s eye on the ball, so be it, as the man said. That’s what the last election was about.
But the Democrats, and some Republicans, still don’t get it. Of course they want a longer-term extension. They want us distracted. So is the two-week budget irresponsible? Not when it’s the antidote to the irresponsibility that got us into this mess. Come to think of it, how about two-week budgets right up until November 2012?
Deflation Dread Disorder
A recent piece in the Economists’ Voice by Ed Leamer, who runs the Anderson Forecast Center at UCLA (one of the better forecast shops), diagnoses a new mental illness: Deflation Dread Disorder. Deflation Dread Disorder is characterized by an almost irrational concern over the almost zero chance of actual deflation — that is, falling prices.
Professor Leamer briefly addresses each of the usual reasons given for fearing deflation: impact of falling prices on business profits, impact on nominal debt burdens, and concerns that consumers will delay spending due to an expectation of lower future prices. The piece demonstrates why each of these concerns is misplaced in the current environment, and it does so in a manner easily accessible to non-economists. As it is a very brief piece, you’re better off reading it for yourself…
Will Americans Line Up to Fill Jobs Now Held by Illegal Workers?
Do illegal immigrants take jobs away from Americans? With unemployment still at 9 percent, that’s a question Republicans were asking at a hearing Tuesday before the House Judiciary subcommittee on immigration policy and enforcement.
Committee Chairman Lamar Smith (R-TX) certainly thinks so. In a statement at the hearing, he noted that there are still 7 million illegal immigrant workers in the country while the unemployment rate among legal Hispanic workers is 12 percent and among blacks 16 percent. “These jobs [held by illegal workers] should go to legal workers, many of them minorities,” Smith said.
The math sounds simple, but it is not the way our economy works. In testimony before the same subcommittee in January on a related topic, I tried to explain to the members that
It may produce a good sound bite but it is misleading to assert that every low-skilled immigrant we can round up and deport will mean a job for an unemployed American. The real world economy doesn’t work that way. Low-skilled immigrants, whether legal or illegal, do not compete directly with the large majority of American workers. American companies hire immigrant workers to fill millions of low-skilled jobs because there are simply not enough American workers willing to fill those same jobs. The pay and working conditions for many of these jobs do not match the qualifications and aspirations of the large majority of Americans currently looking for employment in our recovering economy.
I go on to explain why there is no negative connection between immigration and levels of employment among native-born American workers, including black Americans. In fact, immigration creates employment opportunities for Americans.
You can read my full testimony here.
Rearranging the Deck Chairs on the Farmhouse Porch
Mark Bittman had a column on the NYTimes online “Opinionator” blog yesterday on farm subsidies. He included a fairly (but not completely) thorough list of what is wrong with farm subsidies in America, but he ultimately comes down on the side of “fixing” farm subsidies rather than ending them altogether.
Bittman acknowledges that the “temporary” programs intended to offset the worst effects of the Great Depression have morphed into the bloated, corrupt, regressive and damaging programs we see today, and yet he still has enough faith in government to advocate new programs. He would like to see farm subsidies reformed to (a) encourage farmers to grow foods that Bittman determines we need more of; (b) re-size American farms to what he thinks are the appropriate size; (c) help more people to go into farming; (d) prevent farmland from being converted into higher-value development; and (e) allow us to spend more money on programs he thinks more worthy (high-speed rail, for example).
Some of the money for the new farm programs would come from the budget, primarily from the so-called “direct payments” that flow to farmers and landowners based on past production of certain crops, but Bittman seems attracted to the idea of new taxes on food processors (which, you can be sure, would be passed on to consumers). He alleges the food companies are the main beneficiaries of farm subsidies, even as he admits that consumers have benefitted from lower prices of subsidized commodities.
The solution to a lot of the problems caused by farm subsidies, however, lies not in changing the direction of the programs. Perhaps unwittingly, Bittman himself has pointed to the way out:
The subsidy-suckers don’t grow the fresh fruits and vegetables that should be dominating our diet. Indeed, if all Americans decided to actually eat the five servings a day of fruits and vegetables that are recommended, they would discover that American agriculture isn’t set up to meet that need. They grow what they’re paid to grow: corn, soy, wheat, cotton and rice.
While I agree that American farmers are producing far more for government programs than they are the demands of the market, the solution is to get rid of the farm subsidies. If Americans decide to eat more fruit and vegetables, you can be sure that farmers here or abroad (and it does not matter which) will be happy to provide them. The solution lies not in tinkering with the program in the hope that finally, this time, bureaucrats in Washington will get it right, but in freeing the farmers from government interference totally, and letting the market decide which foods are grown.
Correction: Charles Mahtesian at Politico Did NOT Agree with Chris Matthews
In my recent Wall Street Journal article, “The Myth of Corporate Cash Hoarding,” I quoted Chris Matthews of MSNBC’s Hardball asking Politico‘s Charles Mahtesian an apoplectic question about businesses “sitting on their money” just to keep the economy weak and hurt Obama’s reelection chance in 2012. Then I carelessly added an erroneous superfluity −writing that “Mr. Mahtesian concurred.”
My apologies to Charles Mahtesian (and congratulations for having had the good sense to disagree with Chris Matthews).
In reality, Mahtesian wisely dodged Chris Matthews’ bizarre interrogation about corporations willfully refusing to spend idle cash until after 2012 election. Mahtesian instead switched to talking about business going “whole hog” during the 2010 congressional election (this show aired September 27).
Here is the transcript:
MATTHEWS: You know, a great question, Charles, that wasn‘t on my list to ask, but I‘m going to ask you because you seem like a sophisticated guy of many parts. Do you think business can sit on those billions and trillions of dollars for two more years after they screw Obama this time? Are they going to keep sitting on their money so they don’t invest and help the economy for two long years just to get Mr. Excitement, Mitt Romney, elected president? Would they do that to the country?
MAHTESIAN: Well, I won’t touch the first question, Chris, but…
MATTHEWS: That was all one question, bro!
MAHTESIAN: Oh! I prefer splitting the two. I’d say that I think what you’re going to see the business community do is really go whole hog at this election right now because either way, you know, I think they can envision a scenario in which they lose … because, for example, number one, if the president has a Republican House, that’s probably going to be a rough scenario for them anyway because that’s what the White House wants if they want to get elected in 2012 — re-elected. So, probably the best-case scenario for them.
MATTHEWS: Yes.
MAHTESIAN: So you know, either way, I mean, I think they — they weigh the equities, and you know, see it as a 50-50 endeavor.
MATTHEWS: Anyway, I just hope business starts spending.
Keep Moving, There’s Still Nothing to See Here
In dribs and drabs the plot thickens in the quiet little saga surrounding the GAO’s brutal and broken August report on for-profit colleges. The latest development is the near-silent transformation of the GAO office that produced the knee-capping report that was later quietly reissued with lots of new, for-profit-exonerating material.
I say “near-silent transformation” because word about it somehow got to the Coalition for Educational Success, a career college advocacy group. Yesterday, CES issued a press release on the matter, and this morning I contacted GAO’s public affairs office about it. To the GAO’s credit, their public affairs folks quickly sent me a copy of a memo announcing the end of the Forensic Audits and Special Investigations (FSI) team. Sadly, it was clear that there would be no public announcement of the change, which is utterly consistent with the behind-your-back way GAO has handled every development in this story. Well, every development save the very public release of the original, fatally flawed report.
Especially concerning is the following passage in the memo, which suggests that the for-profit college report provided the ultimate impetus for giving the FSI a new identity. This despite the FSI having done investigations in numerous other areas:
Since the Forensic Audits and Special Investigations team was formed in 2005 the team’s body of work has resulted in numerous accomplishments and benefits to the Congress and the public. To ensure good work continues and to bring greater management attention to the group and more seamlessly integrate its work with GAO’s program teams as well as the audit and investigative sides of the unit, today I am announcing several changes. These enhancements will also ensure greater attention to the issues that led to the need to produce the errata to the for-profit schools report and by the subsequent inspection.
So why does the group need “greater management attention”? And what exactly are “the issues that led to the need to produce the errata” to the August report?
As a member of the public it sure would be nice to know the answers to these questions, especially since these are the guys who are supposed to be holding the rest of the federal government ”accountable.” For proprietary schools’ employees and investors — the people who were most hurt by the dubious August report — these are thing they absolutely should know. But the GAO insists on telling us that nothing major went wrong while refusing to share information we’d need to confirm that. It’s not only totally unsatisfactory, it only makes you even more suspicious.
President Obama’s Rhetoric on Libya
The prospect of the United States intervening in Libya is uncertain. Yesterday, Secretary Gates and Adm. Mullen appeared to downplay the possibility of military action, while not clearly taking a position. But lost in much of the reporting is President Obama’s Executive Order declaring a national emergency, and the accompanying letter to congress, issued last Friday.
Obama claimed that the overall situation constituted “…an unusual and extraordinary threat to the national security and foreign policy of the United States.” Over at The Skeptics, I examine why it is a mistake for the president to lump together national security and humanitarian considerations:
Obama should be ashamed of this language. Muammar Qadhafi is a despicable man without basic decency, but this fuzzy rhetoric is wrong and possibly harmful. Not just a “threat” to U.S. national security, but an “extraordinary” threat? What would constitute a trivial threat or a non-threat, then? And what is the rhetorical purpose of adding the clause “and foreign policy” to the sentence? To fuse the argument about national security threat to one claiming that Muammar Qadhafi’s slaughter of his own citizens might influence our foreign-policy decisions, it seems. But writing in that way leads a casual observer to believe that the president is emphasizing what he believes to be a threat to U.S. national security posed by Libya, which does the English language a disservice. For some reason the phrase “giving the appearance of solidity to pure wind” is coming to mind.
I understand that the same clique of neoconservatives and New Republic people and other liberal imperialists who got us into the Iraq war are urging Obama to act and salivating at the prospect of accusing him of being “weak,” but even they did not use the sort of hyperbolic rhetoric that Obama did in his Executive Order and letter to congress.
Whole thing here.
Accountability in the New Congress
Just over a week ago, Politico ran a story noting that Justin Amash, a newly-elected House member from Michigan, had already voted “present” more often than his predecessor had in eight years. The story suggested that Amash was trying to avoid electoral responsibility for tough votes by voting present. In general, the story suggested that his “present” votes were a failure in some way to meet his responsibilities as a representative.
You can read Amash’s take on all this at his Facebook page. Although I have never met Amash, I have followed his political career over the past year or so. In Michigan, he emphasized transparency and accountability. He reported and explained his votes on his Facebook page. He is continuing to do that here in Washington. Does that sound like a politician trying to avoid accountability?
Politico also reported some of Amash’s reasons for voting “present”: when he does not have “reasonable” time to review the legislation, when called upon to choose “between programs he hasn’t been given time to study,” when he has “procedural or constitutional concerns about a piece of legislation that has desirable ends,” and when he has a “substantial conflict of interest” — a situation that has not yet happened.
Amash sounds like a representative trying to take his obligations seriously. Apparently he feels he owes his constituents his best judgment about bills before the House and, absent enough time, he refuses to delegate his judgment to party elders or to mere caprice. It says something about the culture of the capital that Amash’s sense of fidelity to those who elected him occasions complaint.
The latest from Politico on Justin Amash confirms this impression. Among House GOP freshmen, he is the least likely to vote for the position taken by a majority of his class. That might be cause for concern since the GOP freshmen seem intent on cutting government spending. But I really doubt that Amash has gone native in DC. He is voting with the other GOP freshmen 70 percent of the time. It is possible that the other 30 percent of his votes reflect a concern for liberty or what he sees as the good of his constituents. Sometimes there is a great difference between being a party man and being a friend of liberty and a faithful representative.
More than a few Washington insiders are probably saying Amash is off to a rough start in his congressional career. I disagree. What I have seen so far, including these criticisms of him, confirm what I have thought for some time: Justin Amash is one of the most interesting and potentially important representatives to come to DC in a long time.
Spending Still Increases with GOP Cuts
House Republicans engineered a continuing resolution for fiscal 2011 that would trim $61 billion in “regular” discretionary budget authority versus fiscal 2010. The Obama administration and the Democratic majority in the Senate balked at the cuts, and a two-week continuing resolution will be passed in order to avoid a “government shutdown” and give the sides more time to reach an agreement.
Based on the Congressional Budget Office’s score of the continuing resolution containing $61 billion in funding cuts, and the CBO’s recent budget projections, both discretionary and total federal outlays (actual spending) would still be higher in fiscal 2011 versus fiscal 2010.
Keep these charts in mind the next time you hear or read that the Republicans’ supposedly “major spending cuts” will lead to reduced economic growth and hundreds of thousands of jobs lost.
Bernanke’s Soft-Core Keynesianism Is Even Worse than the Nonsensical Analysis of Hard-Core Keynesians
Earlier this week, the Washington Post predictably gave some publicity to the Keynesian analysis of Mark Zandi, even though his track record is worse than a sports analyst who every year predicts a Super Bowl for the Detroit Lions. The story also cited similar predictions by the politically connected folks at Goldman Sachs.
Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year. His report comes on the heels of a similar analysis last week by the investment bank Goldman Sachs, which predicted that the Republican spending cuts would cause even greater damage to the economy, slowing growth by as much as 2 percentage points in the second and third quarters of this year.
Republicans understandably wanted to discredit this analysis. But rather than expose Zandi’s laughably inaccurate track record, they asked the Chairman of the Federal Reserve, Ben Bernanke, for his assessment. But this is like asking Alex Rodriguez to comment on Derek Jeter’s prediction that the Yankees will win the World Series.
Not surprisingly, as reported by McClatchy, Bernanke endorsed the notion that spending cuts (actually, just tiny reductions in planned increases) would be “contractionary.”
Bernanke was asked repeatedly about GOP proposals to trim anywhere from $60 billion to $100 billion in government spending during the current fiscal year, which ends Sept. 30. These cuts would do little to bring down long-term budget deficits but would slow the economic recovery, he cautioned. “That would be ‘contractionary’ to some extent,” Bernanke said, projecting that “several tenths” of a percentage point would be shaved off of growth, and it would mean fewer jobs. …While Democrats got what they wanted out of Bernanke with that answer, he frowned on some of their projections that the spending cuts that are being debated could reduce growth by a full 2 percentage points.
Since he is not a fool, Bernanke was careful not to embrace the absurd predictions made by Zandi and Goldman Sachs. But that’s merely a difference of degree. Bernanke’s embrace of Keynesian economics is disgraceful because he should know better. And his endorsement of deficit reduction (at least in the long run) is stained by crocodile tears since Bernanke supported bailouts and endorsed Obama’s failed stimulus.
But while Bernanke is not a fool, I can’t say the same thing about Republicans. Bernanke has made clear that he either believes in the perpetual-motion machine of Keynesianism, or he’s willing to endorse Keynesian policies to curry favor with the White House. Republicans should be exposing these flaws, not treating Bernanke likes he’s some sort of Oracle.
Defending the Undefendable
Freedom requires tolerance. That principle will be put to the test today as Americans respond to the Supreme Court decision in Snyder v. Phelps.
As Ilya Shapiro first noted below, Chief Justice John Roberts, writing for the Court, with a thoughtful dissent by Justice Samuel Alito, upheld the right of Rev. Fred Phelps and members of the Westboro Baptist Church to picket at military funerals, carrying signs that read “Thank God for Dead Soldiers,” “Fags Doom Nations,” “America is Doomed,” “Priests Rape Boys,” and “You’re Going to Hell.” It is a mark of our liberty that in most cases we defend even the most despicable speech. And in that we stand in stark contrast to much of the world.
In truth, we should also defend most (but not all) despicable actions — short of those that violate the rights of others. But at least we defend speech, even though the line between speech and action is not always clear. But here, the Court set forth the issues carefully and correctly, examining the content, form, and context of the speech as revealed by the whole record — none of which is to say that governments cannot regulate the time, place, and manner of speech under content-neutral provisions. But as Chief Justice Roberts concluded, “As a Nation we have chosen … to protect even hurtful speech on public issues to ensure that we do not stifle public debate.”
By contrast, just today the New York Times reports that Shahbaz Bhatti, the only Christian member of Pakistan’s cabinet, was shot dead as he left his home this morning. His sin? He opposed Pakistan’s blasphemy law, despite threats to his life by Islamist extremists. And only two months ago the governor of Pakistan’s Punjab province, Salman Taseer, was shot and killed by one of his guards for speaking out in defense of a Christian woman sentenced to death under Pakistan’s blasphemy law. Tolerance is all too rare around the world, but it is the foundation of liberty. We’re fortunate to live in a nation whose Founders implanted that principle in our Constitution.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
