Archive for May, 2011
Tuesday Links
- “Vouchers and tax credits differ from one another in important ways, and Pennsylvanians deserve to have their representatives consider them one at a time.”
- “So, if the Supreme Court’s precedents defer to Congress’ assessments of its powers, but Congress is relying for ‘constitutional authority’ on the Supreme Court’s precedents, then NO ONE is actually looking at the Constitution itself to see if a bill is within Congress’ enumerated powers.”
- “Carbon dioxide, thought to be a significant cause of the warming of surface temperature since the mid-1970s, is currently the respiration of the world’s economic civilization. Getting rid of it isn’t as simple as banning CFCs and switching to another refrigerant.”
- “As Arthur Schlesinger Jr. explained in his book of that name, the presidency’s transformation from limited, constitutional office to Supreme Warlord of the Earth has been ‘as much a matter of congressional abdication as of presidential usurpation.’”
- It’s the expenditures, stupid:
New Paper Explains Why Low-Tax Jurisdictions Should Resist OECD Attacks against Tax Competition and Fiscal Sovereignty
One of the biggest threats against global prosperity is the anti-tax competition project of a Paris-based international bureaucracy known as the Organization for Economic Cooperation and Development. The OECD, acting at the behest of the European welfare states that dominate its membership, wants the power to tell nations (including the United States!) what is acceptable tax policy.
I’ve previously explained why the OECD is a problematic institution – especially since American taxpayers are forced to squander about $100 million per year to support the parasitic bureaucracy.
For all intents and purposes, high-tax nations want to create a global tax cartel, sort of an “OPEC for politicians.” This issue is increasingly important since politicians from those countries realize that all their overspending has created a fiscal crisis and they are desperate to figure out new ways of imposing higher tax rates. I don’t exaggerate when I say that stopping this sinister scheme is absolutely necessary for the future of liberty.
Along with Brian Garst of the Center for Freedom and Prosperity, I just wrote a paper about these issues. The timing is especially important because of an upcoming “Global Forum” where the OECD will try to advance its mission to prop up uncompetitive welfare states. Here’s the executive summary, but I encourage you to peruse the entire paper for lots of additional important info.
The Paris-based Organization for Economic Cooperation and Development has an ongoing anti-tax competition project. This effort is designed to prop up inefficient welfare states in the industrialized world, thus enabling those governments to impose heavier tax burdens without having to fear that labor and capital will migrate to jurisdictions with better tax law. This project received a boost a few years ago when the Obama Administration joined forces with countries such as France and Germany, which resulted in all low-tax jurisdictions agreeing to erode their human rights policies regarding financial privacy. The tide is now turning against high-tax nations – particularly as more people understand that ever-increasing fiscal burdens inevitably lead to Greek-style fiscal collapse. Political changes in the United States further complicate the OECD’s ability to impose bad policy. Because of these developments, low-tax jurisdictions should be especially resistant to new anti-tax competition initiatives at the Bermuda Global Forum.
To understand why this issue is so important, here’s a video I narrated for the Center for Freedom and Prosperity.
And here’s a shorter video on the same subject, narrated by Natasha Montague from Americans for Tax Reform.
Last but not least, here’s a video where I explain why the OECD is a big waste of money for American taxpayers.
Once More Into the Obamacare Breach
Today we filed Cato’s sixth brief supporting the various legal challenges to Obamacare, this time in the D.C. Circuit. Like Tom Joad, wherever the fight has been, we’ve been there, and now it’s in our backyard.
In February, Judge Gladys Kessler of the D.C. district court granted Congress the power to regulate “mental activity” in a decision that flippantly disregarded the core distinction between action and inaction: “Making a choice is an affirmative action, whether one decides to do something or not do something.” The frightening scope of that opinion has proven more harmful than helpful to the government, which has shifted its focus away from Kessler’s sweeping language by describing the mandate as merely a requirement that people pre-pay for the health care they will inevitably use.
Our latest brief deals more directly with that added nuance—even more so than the brief Cato filed two weeks ago. Due to a local circuit rule requiring amici with similar arguments to file jointly, Cato coordinated a brief involving six other organizations—Mountain States Legal Foundation, Pacific Legal Foundation, Competitive Enterprise Institute, Goldwater Institute, Revere America, and Idaho Freedom Foundation—as well as Prof. Randy Barnett.
Using Cato’s previous brief as a starting point, amici worked together to adjust our arguments in light of new ideas coming from both the government and academia. The core argument, however, remains the same: regardless of any linguistic contortions, the non-purchase of health care is fundamentally a non-economic inactivity that Congress cannot reach under the Commerce and Necessary and Proper Clauses.
Allowing Congress the power to conscript citizens into economic transactions not only goes beyond current precedent, but would give Congress a general and limitless police power to do whatever it thinks best, checked only by politics.
In addition to the doctrinal arguments we presented in previous briefs, here we remind the court that limiting Congress’s power is the explicit purpose of Article I of the Constitution and address the relationship of the individual mandate to United States v. Comstock, the most recent interpretation of the limits on federal power under the Necessary and Proper Clause (a case in which Cato also filed a brief, that Ilya Somin covered in our Supreme Court Review, and about Trevor Burrus and I recently published a law review article).
The D.C. Circuit will hear the case of Seven-Sky v. Holder in September. Given the state of litigation around the country, we will likely not be filing another Obamacare brief before the action reaches the Supreme Court—which it’s expected to later this year, after the first few circuit courts issue their rulings.
Transportation: Top Down or Bottom Up?
America’s transportation system needs more centralized, top-down planning. At least, that’s what the Brookings Institution’s Robert Puentes advocates in a 2,350-word article in the May 23 Wall Street Journal.
If that seems like an unlikely message from America’s leading business daily, perhaps it is because Puentes couched it in terms such as “spending money wisely,” solving congestion, and “adhering to market forces.” But not-so-hidden behind these soothing phrases is Puentes real argument: “America needs to start directing traffic” by developing “a clear-cut vision for transportation.” Such a vision “must coordinate the efforts of the public and private sectors.”
“The big question,” Puentes says, “is how much it will all cost.” This is a diversion from the real big question, which is: who will do this coordination? In Puentes view, the answer is smart people in Washington DC who can best determine where to make “critical new investments on a merit basis” using such tools as an infrastructure bank.
The Supreme Court and the California Prison System
This morning the Supreme Court issued a remarkable ruling [pdf] concerning California’s prison system. Because of years of pervasive overcrowding, there have been systemic violations of the Constitution’s ban on Cruel and Unusual Punishments. To remedy those violations, the Court affirmed a lower court order to reduce the prison population. I was not surprised to learn that Justice Anthony Kennedy authored the majority opinion in this case, Brown v. Plata. In a 2003 speech to the American Bar Association (reprinted in my book In the Name of Justice), Kennedy tried to raise more awareness about America’s prison system. He made the point that every citizen ought to take an interest in the prison system–it is not just the realm of correctional personnel. Here’s an excerpt from Kennedy’s speech:
The subject [of prisons] is the concern and responsibility of every member of [the legal] profession and of every citizen. This is your justice system; these are your prisons. … [W]e should know what happens after the prisoner is taken away. To be sure, the prisoner has violated the social contract; to be sure he must be punished to vindicate the law, to acknowledge the suffering of the victim, and to deter future crimes. Still, the prisoner is a person; still, he or she is part of the family of humankind.
Were we to enter the hidden world of punishment, we should be startled by what we see. Consider its remarkable scale. The nationwide inmate population today is about 2.1 million people. In California … this state alone keeps over 160,000 persons behind bars. In countries such as England, Italy, France, and Germany, the incarceration rate is about 1 in 1,000 persons. In the United States it is about 1 in 143.
The numbers are only the beginning of the story. Do not assume that the government has the facilities to house the prisoners that are sentenced. California is housing far beyond the design capacity of its prisons–double. That is, it has designed a system for 80,000 but has stuffed 160,000 into the buildings. The sheer number of inmates has overwhelmed the facilities and staff. Kennedy’s opinion details the abysmal conditions, but I will mention a few:
- In one prison, 54 men share one toilet
- medical staff sometimes use closets and storage rooms for ill patients-rooms without adequate ventalition.
- exam tables are not disinfected after use by prisoners with communicable diseases
- men held for hours and hours in telephone booth sized cages with no toilet
- California’s prison system averages one suicide a week (80% higher than the national average)
- Men with medical problems go untreated and die. These are not cancer patients. These are preventable deaths. For example, a man with stomach pain goes five weeks without medical treatment and dies.
A corrections official from Texas toured California’s facilities and he testified that he has been in the field 35 years and was just appalled. He’d “seen nothing like it.”
Four conservative justices–Scalia, Thomas, Roberts and Alito–dissented from the ruling. Scalia said the outcome was “absurd” — “perhaps the most radical injunction issued by a court in our Nation’s history.” Justice Alito said the Constitution “imposes an important–but limited–restraint on state authority in [the prison] field. The Eighth Amendment prohibits prison officials from depriving inmates of ‘the minimal civilized measure of life’s necessities.’” The conservatives concede, as they must, that the California prison system is really bad, but they argue that it is not yet so awful so as to warrant judicial intervention and a population reduction order. Kennedy and the liberals in the majority (Breyer, Ginsburg, Sotomayor, and Kagan) make a persuasive case that California’s elected officials have had ample opportunity to address the systemic problems, but have let them fester year after year.
Don’t Let the Aphorism Be the Enemy of Thought
I am often told that pointing out the serious shortcomings of government-funded school vouchers and the relative superiority of education tax credits is a case of “making the perfect the enemy of the good.”
It’s isn’t.
That is a misapplication of Voltaire’s famous aphorism. What the aphorism exhorts is that we not pursue an unattainable perfection when a good alternative is within reach. Education tax credits are not only attainable, they are usually easier to obtain than vouchers. Consider a recent example: Pennsylvania’s state House has voted 190 to 7 to expand its existing EITC tax credit program while the state Senate has been deadlocked for weeks looking for the bare minimum of votes to pass a voucher bill.
On top of that, it is dubious to cast vouchers as “the good” when they will expand the scope of compulsion of taxpayers to funding many new types of schooling to which they might well object, impose heavy new regulations on private schools (homogenizing the available “choices”), and more pervasively curtail direct payment by consumers in favor of third party government payment.
Even those who may not be fully convinced that vouchers are inferior should pause before trying to enact them in states that already have education tax credit programs with good growth prospects. Why make the dubious the enemy of the pretty darned good?
A ‘Special’ Relationship?
When President Obama meets with British Prime Minister David Cameron in London, they should focus on the two wars that involve both the U.S. and British militaries (Afghanistan and Libya). But these discussions will take place in the context of diminishing British military capability.
At a time when the United States should be shedding some of the burdens of policing the globe, and encouraging other countries to step forward to defend themselves, the British are moving in the opposite direction. They are cutting their military, and tacitly becoming more dependent upon U.S. power. The end result will be a United Kingdom that is less able to assist us in the future.
The United States today spends far more on its military than does the United Kingdom, and the gap is likely to grow. This is sure to have an impact on the U.S.-UK relationship.
The number of British troops, ships and planes that are available for missions has dropped and will continue to if Cameron pushes through significant cuts in British military spending. He has proposed actual cuts, not the slowing in the rate of growth that Obama and Defense Secretary Gates have presided over so far.
The special relationship has been cemented by the numerous occasions in which British and American leaders have cooperated to address common security challenges. The most important of these involve U.S. and British troops fighting side by side.
But shrinking British defense spending could strain the relationship. The goodwill that has prevailed between the two countries could be in jeopardy, and Americans may find it harder to look upon the Brits as the “good” ally, the one that sticks by us through thick and thin. And if the American public grows disenchanted with British contributions to U.S.-led military missions, the British public may then hold less generally positive opinions of the United States.
A version of this post originally appeared in The National Interest Online.
Religion in Service of the Welfare State
Here we go again: To read E.J. Dionne’s piece in the Washington Post this morning, you’d think that God Himself had ordained the modern welfare state. Dionne’s nominal target is the media for its failure to sufficiently cover John Boehner’s recent commencement address at the Catholic University of America. But his larger aim is to promote his reading of the proposition that “From the apostles to the present, the Magisterium of the Church has insisted that those in power are morally obliged to preference the needs of the poor.”
That’s from the opening paragraph of a letter to Boehner from a group of Catholic academics, including some leading members of the Catholic University faculty. It added, “Your record in support of legislation to address the desperate needs of the poor is among the worst in Congress.” And it singled out the House-passed Ryan budget for special condemnation, Dionne tells us, approvingly.
It’s hardly news, of course, that Catholics, along with other denominations, are divided on the “social justice” question. But as I wrote last month in the Wall Street Journal, the idea that Jesus taught that we should be forced, by government, to aid the poor is a serious misreading of Christian doctrine, to say nothing of the Decalogue. Virtue arises from voluntary actions, of which there is no shortage here in America — at least so long as the burdens of the welfare state don’t crowd them out entirely. This use of the gospel to promote that state is not only unAmerican but unChristian as well.
Monday Links
- Please join us this Wednesday, May 25 at 2:00 p.m. Eastern for a Policy Forum with former Minnesota governor Tim Pawlenty, “Limiting Government: What Washington Can Learn from Minnesota,” with opening remarks from Cato founder and president Edward H. Crane. Governor Pawlenty received an “A” grade on Cato’s biennial “Fiscal Policy Report Card on America’s Governors: 2010,” by Cato director of tax policy studies Chris Edwards. Complimentary registration is required of all attendees by noon Eastern tomorrow, Tuesday, May 24–seating is limited and not guaranteed. If you cannot join us in person, please join us on the web for a live video stream of the event.
- Washington’s use of tax dollars to strong-arm states into adopting national standards and tests doesn’t leave much room for state choice in education.
- Did you know Cato has a series of 60 and 90-second radio ads about the Constitution that you can download for free?
- “Unfortunately, suspicions about private property as a fundamental human right survive to this day, to the detriment of the coherence of human rights as a guiding political concept, and of fundamental freedoms and prosperity.” Read the rest of the new Cato Policy Report here.
- What will happen if we do nothing, and let Medicaid, Medicare, and Social Security continue to grow?
Let Europe Be—and Defend—Europe
In the midst of difficult domestic political battles, Barack Obama begins a lengthy European trip today. He should encourage the continent to increase its defense capabilities and take on greater regional security responsibilities.
Presidential visits typically result in little of substance. President Obama’s latest trip will be no different if he reinforces the status quo. His policy mantra once was “change.” No where is “change” more necessary than in America’s foreign policy, especially towards Europe.
Despite obvious differences spanning the Atlantic, the U.S. and European relationship remains extraordinarily important. The administration should press for increased economic integration, with lower trade barriers and streamlined regulations to encourage growth.
At the same time, however, Washington should encourage development of a European-run NATO with which the U.S. can cooperate to promote shared interests to replace today’s America-dominated NATO which sacrifices American interests to defend Europe. Americans no longer can afford to defend the rest of the world. The Europeans no longer need to be defended.
Although World War II ended 66 years ago, the Europeans remain strangely dependent on America. Political integration through the European Union has halted; economic integration through the Euro is under sharp challenge; and military integration through any means is reversing.
Indeed, the purposeless war in Libya, instigated by Great Britain and France, has dramatically demonstrated Europe’s military weakness. Despite possessing a collective GDP and population greater than that of America, the continent’s largest powers are unable to dispatch a failed North African dictator.
President Barack Obama starts with visits to Ireland, the UK, and France. In the latter he will consult with the heads of the G8 nations, which include Germany and Italy.
His message should be clear: while America will remain politically and economically engaged in Europe, it will no longer take on responsibility for setting boundaries in the Balkans, policing North Africa, and otherwise defending prosperous industrial states from diminishing threats. Washington should expect the continent to become a full partner, which means promoting the security of its members and stability of its region.
The president should deliver a similar message when he continues on to Poland. Part of “New Europe,” which worries more about the possibility of revived Russian aggression, Warsaw has cause to spend more on its own defense and cooperate more closely with its similarly-minded neighbors on security issues.
In fact, Poland, Slovakia, Hungary, and the Czech Republic, members of the “Visegrad Group,” recently announced creation of a “battle group” separate from NATO command to emphasize regional defense. The president should welcome this willingness to take on added defense responsibilities.
Communitarians and Libertarians
Communitarian “guru” Amitai Etzioni debated Roger Pilon at Cato two weeks ago. Also me, 18 years ago. And last week he had two postings at the Encyclopedia Britannica blog. I offer some thoughts on individualism, communitarianism, and implausible misrepresentations of libertarianism at the Britannica today.
When I hear communitarians like Etzioni describe the libertarian view of individualism, I wonder if they’ve ever read any libertarian writing other than a Classic Comics edition of Ayn Rand….
There’s no conflict between individualism and community. There’s a conflict between voluntary association and coerced association. And communitarians dance around that conflict.
Do you believe that “The libertarian perspective, put succinctly, begins with the assumption that individual agents are fully formed and their value preferences are in place prior to and outside of any society”? Of course not. Who would? Read the Britannica column to find out who says you do.
Why Budgets Are Busted
Three stories in today’s Washington Post help us to understand why governments around the world are facing unmanageable deficits. On the front page:
When Prime Minister Jose Luis Rodriguez Zapatero took power seven years ago, he and his Socialist Workers’ Party set out to perfect the welfare state in Spain. The goal was to equal— or even surpass — lavish social protections that have long been the rule for Spain’s Western European neighbors.
True to his Socialist principles and riding an economic boom, Zapatero raised the minimum wage and extended health insurance to cover everything from sniffles to sex changes. He made scholarships available to all. Young adults got rent subsidies called “emancipation” money. Mothers got $3,500 for the birth of a child, toddlers attended free nurseries and the elderly got stipends for nursing care.
On page 3, a story about federal pensions, which still offer federal employees
a benefit lost long ago by many workers at private companies — a guaranteed retirement check paid largely by the boss.
These traditional pensions, called defined-benefit plans, have long been an attractive feature of government work.
On the op-ed page, George Will notes that in 1975 then-governor Jerry Brown said that his plan was
To stand up to the special pleaders who are encamped, I should say, encircling the state capitol, and to see through their particular factional claims to the broad public interest.
Three years later, “Brown conferred on government employees the right to unionize and bargain collectively.” Now, from prison guards to teachers, the public employee unions press for unaffordable spending and block efforts at reform. And again-governor Jerry Brown would rather raise taxes than stand up to the unions that helped elect him.
As has been noted many times, politicians spend all the money that comes in when times are good. They don’t put anything aside for the possibility of lean years. And they make commitments, like pensions and collective bargaining agreements, that will prove to be fiscal time bombs, exploding long after the next election. It looks like the long run is here.
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