Archive for April, 2011
The Arab Revolutions — Monday at Cato
Jack Goldstone, who will speak Monday at a Cato Forum, “Civil Resistance and Revolution in the Arab World,” has two interesting articles published today in Foreign Affairs and the Washington Post.
In the Post, Goldstone, who is the Hazel Professor and director of the Center for Global Policy at George Mason University, suggests that China’s rapid economic growth is going to slow down. In Foreign Affairs, more relevantly for Monday’s forum, his topic is “Understanding the Revolutions of 2011” (reg. req.). The magazine’s summary:
Revolutions rarely succeed, writes one of the world’s leading experts on the subject — except for revolutions against corrupt and personalist “sultanistic” regimes. This helps explain why Tunisia’s Ben Ali and Egypt’s Mubarak fell — and also why some other governments in the region will prove more resilient.
At the Cato Forum — 4:00 p.m. Monday — Goldstone will join Peter Ackerman to discuss similar questions:
What explains the swift collapse of what were considered some of the most stable regimes in the Arab world? Drawing on scholarship and his Center’s experience in supporting pro-democracy activists in Egypt and around the world, Peter Ackerman will describe factors — such as strategy and careful planning — that are common to successful civil resistance movements. According to Ackerman, nonviolent campaigns have a better record at bringing down dictators than violent confrontations. Jack Goldstone will describe the conditions that give rise to revolutions, highlight the vulnerabilities of “sultanistic” dictatorships, and identify which Middle Eastern regimes are most likely to retain power.
The New Hungarian Constitution
My colleagues and I talk a lot about the need for fidelity to our founding document, in part because any power the federal government exercises that’s not listed there is illegitimate and in part because our Constitution is an essentially libertarian (or classical liberal) document. And part of having a proper, Madisonian view of the Constitution is not to use foreign law to interpret it (or other domestic law).
But it is absolutely appropriate — and good practice — to look to foreign example and experience when drafting a new constitution (or even crafting new legislation). I find such occasions, when a country comes up with a new founding document — either because it’s a new nation (South Sudan), has undergone regime change (Iraq and Afghanistan recently, Eastern Europe in the 1990s, much of Latin America in the 1980s), or just because (France, periodically) — fascinating. I wrote my college thesis on comparative constitutionalism and now occasionally peruse the Comparative Constitutions blog (apparently there’s a blog, facebook page, or twitter feed for just about anything).
Which is all a long preface to introducing the new Hungarian constitution (English version here) — intended to correct some lingering deficiencies from the immediate post-Communist one. There are plenty of good things in this draft, which is due to be voted on by parliament on April 18 (and expected to be adopted due to the governing party’s majority). It moves in the right direction in many respects on property rights, economic liberties, government transparency, and an independent judiciary, but also contains provisions that would empower the state beyond what is suitable for protecting individual rights (property and otherwise) and provides weak institutional guarantees.
Marion Smith, president of the Common Sense Society (a free-market think tank in Budapest) offered a critique last week in the Wall Street Journal Europe:
The drafters and Mr. Orbán [the prime minister] have committed themselves to Hungary’s future economic sustainability, having already adopted a flat personal income tax of 16% and included a government-spending cap at 50% of GDP in the proposed constitution. At a time when national economies in Europe are collapsing left and right due to years of runaway public spending, Budapest is moving in the right direction.
But the proposed constitution also includes a series of second-generation rights and state objectives that will commit future governments to providing “adequate housing,” “access to work,” “sports,” public education and a state-run pension system to all Hungarians. Whereas natural rights (such as life, liberty and property) are rights that governments protect from infringement by others, positive rights (such as housing and leisure) are things that governments are expected to provide. This redefinition of the nature of rights necessarily and fundamentally alters the relationship between individual and the state and increases the scope of state power. The wealth redistribution necessary to provide these rights undermines the protection of private property.
The Takings Clause Has No Expiration Date
Just a decade ago in Palazzolo v. Rhode Island, the Supreme Court rejected the idea that those who buy property subject to burdensome regulations lose the right the seller otherwise has to challenge those regulations. The Court ruled that the Takings Clause does not have an “expiration date.”
Sadly, not all government authorities or courts took Palazzolo to heart. In 1997, Daniel and Susan Guggenheim bought a mobile home park that, at the time of purchase, was in “unincorporated territory” of Santa Barbara County, California. The Guggenheims did not challenge the county’s 1979 rent control ordinance but instead challenged the 2002 adoption of that ordinance by the City of Goleta when the city incorporated the Guggenheims’ land.
The Ninth Circuit essentially limited Palazzolo to its particular facts and circumstances, deciding to convert the established three-factor test for regulatory takings (Penn Central) into a one-factor test focused solely on “investment-backed expectations.” The court did this largely on the premise that the Guggenheims did not present an “as-applied” challenge — as Palazzolo did — to the ordinance’s application to their mobile home park, but instead filed a facial challenge to the constitutionality of the ordinance itself. As a result, the Ninth Circuit turned two Supreme Court precedents on their head and put that “expiration date” on the Takings Clause in this case.
Significantly, the Ninth Circuit isn’t alone in its misapplication of Palazzolo; the Federal Circuit in CRV Enterprises v. United States (in which Cato will also be filing a brief) also recently issued an opinion severely narrowing Palazzolo‘s scope and deepening a circuit split.
Cato filed an amicus brief supporting the Guggenheims’ request that the Supreme Court review the Ninth Circuit decision and reaffirm its decision in Palazzolo. The brief argues the Supreme Court should review the case because: (1) a rule that allows the transfer of title to immunize government regulation from constitutional or other legal challenge expands government power and diminishes property rights; (2) the Ninth Circuit “flouts” the rule of Palazzolo; and (3) this case — as well as CRV Enterprises — indicates the need for the Supreme Court to settle the spreading confusion about Palazzolo.
Otherwise, the existence of a “post-enactment” rule will create a “massive uncompensated taking” from small developers and investors that would preserve and enhance the rights of large corporations. The ability of property owners to challenge government interference with their property is essential to a proper understanding of the Fifth Amendment; the Court must reestablish the principle that transfer of title does not diminish property rights.
Thanks to legal associate Nick Mosvick and former legal associate Brandon Simmons (acting as our outside counsel in this case) for their work on this case, Guggenheim v. City of Goleta.
Cops and Cameras: Legal and on TV
The controversy over citizens getting arrested for recording on-duty law enforcement officers is prompting legislation. Connecticut has a two-party wiretap law (the audio of a recording is the justification for arrest) and is looking to pass a statute that specifically protects citizen journalism. This is preventive medicine more than anything — Maryland, Illinois, and Massachusetts have been the chief offenders — but a welcome development nonetheless.
The headset cameras I’ve written about are going to make their reality TV debut on Police POV on the TruTV network. The series will show footage of officers in Cincinnati, Chattanooga, and Fort Smith, Arkansas, all filmed with cameras mounted on the officers. The promotional footage shows at least one SWAT raid, proof positive that if you’re willing to strap on a helmet and 45 pounds of body armor and gear, a couple of extra pounds of camera aren’t a bridge too far, and ought to be required.
While Radley Balko has highlighted some shenanigans with police reality TV shows, creating a new normal where officers not only accept the prospect of being filmed on the job but embrace the technology for evidentiary and liability reasons is a step in the right direction. I make the case for more cameras in law enforcement operations with Radley and Clark Neilly in this video:
Obama/Boehner’s Phony Spending Cuts
President Obama and Congress have agreed to cut $38 billion in federal spending, right? If you go by so-called “budget authority,” that may be true. But real spending cuts come when you actually cut real spending, not “budget authority.” Outlays in fiscal year 2011 will likely be considerably higher than last year’s outlays. That means the spending cuts advertised by President Obama and House Speaker John Boehner are laughably fraudulent. Learn more at downsizinggovernment.org.
Video produced by Caleb O. Brown and Austin Bragg.
Federal Spending Trend
My colleague, Tad DeHaven, showed us yesterday that even with the roughly $40 billion spending cut, total outlays will still rise substantially this year, fiscal 2011.
Let me throw another wrinkle into the spending equation. The cost of the TARP financial bailout bill has been re-estimated since it was passed in 2008, which has muddied the data for total federal spending in recent years. The CBO tells us that TARP outlays were $151 billion in FY2009. But the government later reduced the estimated cost of TARP, and it included -$110 billion in FY2010 outlays and -$25 billion in FY2011 outlays (CBO page 4). The chart shows total federal outlays excluding TARP.
Spending increased an average $170 billion a year over the last decade. Thus, the $40 billion cut reverses out no more than one-quarter of one year’s worth of the last decade of increases. Of course, to the extent that the cuts are “smoke and mirrors,” it reverses out even less. Clearly, fiscal conservatives in Congress have their work cut out for them in coming budget battles.
At Least They’re Faking Defense Cuts
Both President Obama and the House Republican leadership now deem it politically expedient to pretend to cut defense spending. That’s progress. Last year, the President explicitly excluded security spending from his proposed discretionary spending freeze, and the standard Republican position on defense spending was “more.”
Obama said yesterday that he wants to cut Pentagon spending by $400 billion over twelve years through “a fundamental review of America’s missions, capabilities, and our role in changing world.” Better late than never. You cannot save big money on defense without reconsidering our defense strategy, which now essentially says that our safety requires running the world by democratizing it, stabilizing unruly states, and defending rich allies lest they develop military capability that they can exercise without our help.
Analysts will complain that the President has put the cart before the horse by saying what this review will save before it starts. But he has simply dispensed with the pretense that strategy drives spending. He also seems to be admitting that his administration’s formal efforts to make strategy, the National Security Strategy and Quadrennial Defense Review, were useless.
That’s the good news. The bad news has three parts.
First, the President falsely claimed that Secretary Gates’s efforts have already saved “$400 billion in current and future spending.” Keep in mind that defense spending, in real (inflation-adjusted) terms has grown during the Obama administration, even if we include the shrinking portion going to the wars. At least until yesterday, they planned to continue increasing non-war defense spending faster than inflation. That means these current “savings” consist entirely of spending that the Pentagon reprogrammed and kept, and the future “savings” come by reducing planned spending growth, rather than reducing actual spending.
And even those reductions are shady. The White House says that total includes $330 billion that Gates various program cancellations will save, along with his famous efficiencies. The $330 billion is an estimate (WAG) of life-time costs for those cancelled programs. But those “savings” went to replacement programs, personnel costs, and war. The efficiencies come largely from accounting tricks and shaky assumptions. In reality, they will go to under-budgeted war costs, not the treasury.
So when the President speaks of saving $400 billion and says we can do it again, “it” is pretending that moving $400 billion around and increasing defense spending is savings. I have no doubt we can do that again. For more detailed analysis, read Charles Knight.
Second, there are few, if any, real savings here. The White House claims that it will achieve these savings by holding defense spending growth below inflation. That would mean spending less in real terms, making it a real cut, albeit a small one. Most of the $400 billion comes, however, by counting this cut against planned spending rather than current spending. The administration also says that the cuts will be distributed throughout the Defense Department, Veterans, and Homeland Security, meaning that the cuts could fall entirely outside DoD. And the claimed savings will occur mostly after this administration’s would-be second term, when someone else will be drafting the budget. The budget Obama proposes to Congress early next year could be his last.
Third, the President and his foreign policy advisors have shown no inclination to jettison defense commitments. The Secretary of State openly states that our current alliances ought to be permanent—“embedded in the DNA of American foreign policy.” The administration just decided to keep 80,000 troops in Europe, rather than 60,000, as previously planned. They caused the government of Japan to fall rather than remove more Marines from Okinawa. They massively expanded the war in Afghanistan and have no real plans to drawdown there. Secretary Gates wants to extend our stay in Iraq. And we just joined a third war.
Congressman Paul Ryan’s defense spending plan is even worse. It borrows Gates’s phony spending cuts and would continue to increase defense spending, as Chris Preble shows. But at least the Republican leadership is now including defense in their deficit reduction rhetoric.
You have to give Gates credit for political acumen. His efficiency initiative intended to deflect Congressional pressure on his budget. The idea was that a budget that seemed leaner would be a less attractive target for deficit hawks who think you save by eliminating waste and overlap, doing the same thing more cheaply. It worked. Maybe Obama’s next defense secretary will attempt to make real choices about what we do with our military. But I suspect that change will be cosmetic.
All Part of the Plan (National Security Wisdom from the Joker)
Batman’s archnemesis the Joker—played memorably by Heath Ledger in 2008′s blockbuster The Dark Knight—might seem like an improbable font of political wisdom, but it’s lately occurred to me that one of his more memorable lines from the film is surprisingly relevant to our national security policy:
You know what I’ve noticed? Nobody panics when things go “according to plan.” Even if the plan is horrifying! If, tomorrow, I tell the press that, like, a gang banger will get shot, or a truckload of soldiers will be blown up, nobody panics, because it’s all “part of the plan.”
There are, one hopes, limits. The latest in a string of videos from airport security to provoke online outrage shows a six-year-old girl being subjected to an invasive Transportation Security Administration patdown—including an agent feeling around in the waistband of the girl’s pants. I’m somewhat reassured that people don’t appear to be greatly mollified by TSA’s response:
A video taken of one of our officers patting down a six year-old has attracted quite a bit of attention. Some folks are asking if the proper procedures were followed. Yes. TSA has reviewed the incident and the security officer in the video followed the current standard operating procedures.
While I suppose it would be disturbing if individual agents were just improvising groping protocol on the fly (so to speak), the response suggests that TSA thinks our concerns should be assuaged once we’ve been reassured that everything is being done by the book—even if the book is horrifying. But in a sense, that’s the underlying idea behind all security theater: Show people that there’s a Plan, that procedures are in place, whether or not there’s any good evidence that the Plan actually makes us safer.
This mode of argument gets particularly frustrating when it comes to the vastly expanded surveillance powers our intelligence agencies have been handed over the past decade. “If these are such a threat to civil liberties,” surveillance hawks demand, “show us the abuses!” This is a somewhat disingenuous demand, since part of the problem is precisely that the powers in question are exercised behind a veil of extreme secrecy. Still, thanks to internal auditing, some fairly serious and systematic abuses of the most discretionary powers have, indeed, become public. If these can’t successfully be dismissed as mere “clerical” or “record-keeping” problems (but how will abuses ever be discovered if those rules are flouted?), there’s always the catch-all Catch-22: Since the abuses are by definition violations of the rules, they’re no evidence against the expanded powers themselves, but only show the need for better training and strict enforcement of internal guidelines.
The simplest way to ensure that there are no abuses, of course, is simply to make the rules so permissive that nothing counts as an abuse. Once upon a time, if it had been revealed that he FBI was vacuuming up the telephone, e-mail, and Internet browsing records of thousands of people who were not even suspected of being linked to terrorism—can’t be too careful, might as well check out everyone—we would have called that an abuse in itself. We wouldn’t have waited for someone to put that improperly collected information to some obviously nefarious use, since the history of American intelligence abuses suggests this wouldn’t occur through formal channels that leave a paper trail anyway. Now, however, we’ve changed the rules, and this kind of sweeping, suspicionless collection of telecommunications records is All Part of the Plan.
Terror attacks, of course, are not Part of the Plan. And we appear to be unwilling to accept that there might be limits to our ability to entirely eliminate the risk of such attacks, however much surveillance power we give government domestically, however many brave men and women we sacrifice in combat overseas. We’ll call those losses tragic—the “price of security,” we’ll say, whether or not there’s evidence they’re buying us much security—but we’ll accept them. Because they’re Part of the Plan. Even if the plan is horrifying.
The Battle of the Ilyas III: Together against Obamacare
As the number of events I’ve participated in as a result of my challenge to debate “anyone, anywhere, any time” on the constitutionality of Obamacare approaches 50, I find myself in many interesting situations. This past Tuesday was no exception, as George Mason law professor (and Cato adjunct scholar) Ilya Somin and I took on Yale law professor Akhil Amar and NYU law professor Rick Hills in an Oxford-style parliamentary debate organized by the Amherst College Political Union.
This event had a number of interesting subplots: Somin and I have held an annual “Battle of the Ilyas” but now appear on the same stage arguing from the same position; Amar wrote a scathing oped attacking Judge Roger Vinson’s decision in the Florida Obamacare case to which I responded by rewriting to lyrics to “Every Breath You Take“; Hills and Somin were both students of Amar; and, of course, the debate was in Massachusetts, home of the Romneycare state-based individual health insurance mandate.
I think Somin and I acquitted ourselves rather well, especially given that the audience was hardly a sympathetic one. I’ll reserve other comment, however, because you can view video of the debate here:
Postscript: After the debate, Amar and I made a $100 bet that our respective sides would prevail at the Supreme Court.
The Incredible Shrinking $38 Billion
On Monday I pointed out that despite all the hoopla, the $38 billion budget cut was only 1 percent of projected 2011 spending.
And now comes news that the actual spending cut in the budget deal is $352 million, or about . . . 1 percent of the purported cut. So now we’re told that the parties went down to the wire, negotiating till midnight, over 1 percent of 1 percent of federal spending. As National Journal explains:
As the parties argue over who who won the months-long budget battle that resulted in a deal to cut $38 billion in federal spending, the Congressional Budget Office offered this total buzzkill: the budget cuts were really only worth $352 million. That’s less than 1 percent of the touted total; many GOP lawmakers are furious and House Speaker John Boehner may have to count on Democratic votes to get the bill passed. Why did the CBO get such a wildly different number?
First of all, the deal actually increased Pentagon spending by about $8 billion, as the Associated Press’s Andrew Taylor explained in an article that was quickly passed around by outraged conservatives Wednesday afternoon. When war spending is considered, the budget actually increases spending by $3.3 billion compared to current levels. As for non-defense spending, much of what was cut comes from grants to state and local governments that haven’t gone into effect yet. (Example: The CBO provided another analysis to lawmakers smacking down claims that cutting health care-related bonuses to states would save $5.7 billion. The real amount of savings? About $0.) Other cuts withdrew appropriations outlays from earmarks that were never spent–and might never have been.
One cut that will seriously cut the deficit? Elimination of year-round Pell Grants. That’ll save $40 billion over the next 10 years, but just under $1 billion this year.
Politico‘s David Rogers notes that if you ignore the defense spending, the deal still cuts $42 billion from current levels. Still, the CBO report is a problem for House Speaker John Boehner, Rogers writes. “Given the GOP’s famous ‘$100 billion cut’ rhetoric of the 2010 campaign, the influence of tea party conservatives and projections now of a $1.4 trillion-plus deficit…” The Republican might have to stoop to “borrow[ing] a phrase from Obama and try to sell the deal as an ‘investment in the future.’”
Nevertheless, the House has just passed the bill to fund the government for the rest of the year, with 59 Republicans and 108 Democrats voting no. For advice on how to cut the budget, visit DownsizingGovernment.org.
Gas Prices, Speculation, and the Price of Tea in China
With gasoline in the United States moving toward (and in some places, above) $4 a gallon and motorists understandably unhappy, there is a growing desire to blame someone for the high prices.
Previous gas price spikes in 2006 and 2008 brought blame on ”Big Oil” (meaning firms like Exxon-Mobil, BP, Royal Dutch/Shell, et al., which really are just mid-sized oil — but whatever), the Bush administration and Republicans, environmentalists, and the federal government. But 2011 offers a new leader in the blame game: speculators. From Capitol Hill lawmakers, to business columnists, to activist websites, to letters to the editor and hyper-forwarded emails, people are calling out trading in the oil and gasoline futures markets, aka ”speculation,” and demanding that government do something about it.
The problem is, I haven’t seen any of these folks offer a coherent explanation for how speculation drives up the price at the pump. And I doubt any is forthcoming.
The speculation-blamers’ story is simple enough: Investors sign futures contracts in oil and gasoline — traditionally, agreeing to a price today for oil or gas that will be delivered weeks or months in the future (and that probably has yet to be pumped out of the ground or refined). But, speculation-blamers say, the investors are running amok, paying outrageous prices for the futures. Those prices then affect oil and gasoline sales today, driving up prices at the pump.
Worse, they say, many of the futures are just paper transactions: the traders don’t have oil or gas to sell, nor do they intend to take delivery of it. Instead, when the future closes (that is, reaches its end-date), then one of the two counterparties will simply pay the other the difference between the agreement’s price and the actual market price on the closing day. For instance, if Smith Investments and Jones Investments signed a six-month future for one barrel of oil at $100, with Smith taking the “short” position (believing that oil’s price will be less than $100 six months from now) and Jones taking the “long” position (believing the price will be above $100), and six months from now oil is selling for $80, then Jones will pay Smith $20. Vice-versa if oil’s price is $120. (In fact, most futures today are settled in cash, even if one of the counterparties is somehow involved in oil production or use.)
On first blush, the speculation-blamers’ story makes sense: Surely, the price for future delivery of oil or gasoline will affect the price for present-day delivery. And all the paper-transaction stuff just seems devious and dangerous — shrewd Wall Street investors are hosing Main Street again!
But think more carefully about the story, and it begins to unravel.
Obey the Constitution
The following is cross-posted from the National Journal’s Education Experts blog. This week’s topic: The Race to the Top program and the FY 2011 budget deal:
Having the advantage of writing this after the CR deal has been made, it appears that Race to the Top will get $700 million but still work through states. So no regional or direct-to-district grants, at least from what I’ve been able to divine.
Unfortunately, the root issue here isn’t Race to the Top — it’s federal involvement in education at all. As long as Washington spends money on education it will call the shots, whether that’s through competitions like Race to the Top, or rules attached to IDEA, or Title I, or student-aid programs. Washington will be the puppet master, and it will waste taxpayer money on programs that do not work.
We know this well from the four, wallet-emptying decades in which we’ve had major federal involvement in education. Yet we are still having the same, misguided arguments: Not whether Washington should be setting education policy at all, but what sort of policy it should set. And the two sides continue to come down, basically, to whether Washington should spend lots of money with copious “accountability,” or spend oodles without as many rules.
Both are wrong. The Founders purposely gave the federal government only specific, enumerated powers, and none of them include the authority to make education policy. And as I have laid out many times, the “general welfare” clause, the “necessary and proper” clause, the taxation clause — none of these gives Washington the authority to do anything in education. Only the 14th Amendment gives it a role in education — to prohibit unequal provision of education by states and districts — as well as Article I, Section 8, which gives the Feds exclusive jurisdiction over the District of Columbia.
Of course, the Founders didn’t give Washington only very limited, specific powers for no reason. They did so because they knew that the strong tendency is for government to be captured by small groups and used not for the public good, but the good of those who wield governmental power. Today, that means politicians often using “the children” as pawns to win political games — spending money to show how much they “care” — while special interests employed by our schools lobby and politick for ever-more dough, weak accountability, and hamstrung competition. And some wonder why federal spending on education has skyrocketed while outcomes have stunk.
We can keep on bickering about Race to the Top and other proposals to twist a few screws on the dilapidated federal machine, or we can get Washington out of education altogether. Both the Constitution and educational success demand we do the latter.
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