Archive for June, 2011
The Petition of the Blogmakers
In his famous “Petition of the Candlemakers,” the great classical liberal thinker Frederic Bastiat lampooned the protectionist arguments of his day by imagining a campaign—launched by the producers of artificial illumination—against “ruinous competition” from that “merciless” scab… the sun. Via In These Times and the Lawyers, Guns & Money blog, I see that someone forgot to explain to the Newspaper Guild and National Writers Union that Bastiat’s petition was, you know, satire.
Borrowing a page from writer Jon Tasini, whose meritless lawsuit against the Huffington Post was roundly and justly ridiculed back in April, those two groups are advocating a boycott of the opinion and news site. They complain that, though HuffPo pays salaries to an enormous number of staff writers, reporters, and editors—apparently more than the New York Times does, if you count the whole AOL newsroom—the site also has the temerity to run lots of unpaid essays and blog posts from volunteer writers, comprising a motley assortment of entertainment celebrities, elected officials, veteran journalists, academics (both famous and obscure), and political activists. As we can see from the millions of individuals clacking away at their keyboards for lesser-known personal or group blogs—or, for that matter, signing up for open-mic nights or posting photos on Flickr—there’s no shortage of people who want the opportunity to share their ideas or their creativity with an audience, but aren’t necessarily looking to make a career of it. Isn’t it great that some companies have found a way to make a profit by providing so many amateur writers, photographers, moviemakers, and artists with a platform?
Not so great, apparently, if you’re among those who feel entitled to be paid for what many happily do gratis—but can’t improve on the amateurs enough to demand a premium for their copy (And all those heartless people in consensual sexual relationships—won’t someone think of the escorts!?). Since their target audience isn’t hugely sympathetic to a “sharing is evil” message (isn’t that what we Rand-besotted Cato folks are supposed to believe?) they’re doing their best to persuade folks that if someone is making a buck, somebody else must be getting exploited:
Ultimately, HuffPo is surviving on the adjunct model. Like higher education with its hordes of PhDs with no job prospects, there is a huge supply of writers who want to make a living in journalism. HuffPo offers the promise of gaining valuable experience and readership so that someday, maybe, you can make it big.
This is a dishonest proposition by HuffPo. It is almost impossible in 2011 to go from a no one to a big name blogger. The blogosphere is ossified. During the explosion of the medium from 2004-06, young writers could produce excellent work and become big name people. Then, by 2007, those were the only blogs people read. Today, those are the prominent and still young writers of the progressive blogosphere. And they aren’t going anywhere.
Now, on a random Thursday evening at The Passenger in DC, I could probably pick out half a dozen successful young progressive writer-bloggers who were unknown in 2007, but let that pass. Skimming the site’s current blog sidebar, I spot such naifs as veteran CBS News correspondent Bob Simon, American Prospect co-founder Bob Kuttner, longtime Harper’s editor Lewis Lapham—all, apparently, hoping for their big break at the Huffington Post! Not to mention UCLA law professor Adam Winkler, movie star Nia Vardalos, or Nobel laureate Desmond Tutu, all dreaming wistfully of an internship offer from the New Republic. And will nobody shed a tear for poor, powerless Sen. Claire McCaskill? Was Jerusalem builded here, among these dark satanic mills?
The reality, of course, is that lots of industries are finding it hard to adapt to an age where the Internet’s ability to harness, aggregate, and distribute so much amateur effort and creativity is creating disruptive abundance where scarcity once promised a steady income. How many of your friends have bought a hardcover dictionary or encyclopedia in the last five years? When did you last need to buy a map on a long car trip? How many of us have decided that, with so many clever people sharing their creative visions on YouTube (and the best of television available for purchase a-la-carte), paying for a cable subscription is a mug’s game? You can love the new reality or hate it, but it seems perverse to blame it on Arianna Huffington, who’s been among the few to find a viable model for turning a profit by fusing amateur contributions and paid professional content.
Will the GOP Finally Cut Farm Subsidies?
With trillion dollar deficits and mounting federal debt, will Congress finally get serious about cutting farm subsidies? We’ve been disappointed before, but there are a few hopeful signs—like the front-page story in this morning’s Washington Post—that this Congress may be serious about cutting billions in payments to farmers. As the Post reports:
In their recent budget proposals, House Republicans and House Democrats targeted farm subsidies, a program long protected by members of both parties. The GOP plan includes a $30 billion cut to direct payments over 10 years, which would slash them by more than half. Those terms are being considered in the debt-reduction talks led by Vice President Biden, according to people familiar with the discussions.
The Post story profiles a freshman Republican from Kansas, Tim Huelskamp, a fifth-generation farmer himself, who has been traveling his sprawling district telling his farmer constituents that they can no longer be exempt from budget discipline. Many farmers in his district appear to agree.
It remains an open question whether the Republican freshman class will live up to Tea-Party principles of limited government when it comes to agricultural subsidies, as we have speculated ourselves (here, here, and here) at the trade center.
Farm subsidies have certainly been a weak spot of Republicans in the past. According to our online trade-vote feature, more than half of the GOP House caucus voted in May 2008 to override President Bush’s veto of the previous, subsidy laden farm bill. In July 2007, more than half the GOP caucus voted against any cuts in the sugar program, and more than two-thirds opposed any cuts in cotton subsidies. (Of course, Democrats were just as bad overall on farm subsidies.)
The next farm bill, due to be written by this Congress, will tell us a lot about whether the Republicans really believe what they’ve been saying about limiting government and reducing the debt.
President Obama and the Auto Industry
Back from vacation, I’m catching up on things I missed last week. Dan Ikenson did a fine job on President Obama’s boasting about how he saved the automobile industry. But a few days later Glenn Kessler, the Washington Post‘s “Fact Checker,” was more brutal:
We take no view on whether the administration’s efforts on behalf of the automobile industry were a good or bad thing; that’s a matter for the editorial pages and eventually the historians. But we are interested in the facts the president cited to make his case.
What we found is one of the most misleading collections of assertions we have seen in a short presidential speech. Virtually every claim by the president regarding the auto industry needs an asterisk, just like the fine print in that too-good-to-be-true car loan.
Here’s a sample of the specific analyses:
“GM plans to hire back all of the workers they had to lay off during the recession.”
This is another impressive-sounding but misleading figure. In the five years since 2006, General Motors announced that it would reduce its workforce by nearly 68,000 hourly and salary workers, creating a much smaller company. Those are the figures that generated the headlines.
Obama is only talking about a sliver of workers — the 9,600 workers who were laid off in the fourth quarter of 2008.
And that’s why President Obama’s speech was awarded Three Pinocchios.
John Hospers, R.I.P.
My old philosophy professor has died. He was the only person I’ve ever met who both received a vote in the electoral college for president of the United States and published leading textbooks in ethics and aesthetics. I am fairly confident that he was the only person of whom that will ever be said.
When I enrolled at the University of Southern California in 1973 to study philosophy, John was chairman of the department. I already knew about him, however, as I had read his book Libertarianism: A Political Philosophy for Tomorrow and had heard him debate against socialism the year before, alongside the late R. A. Childs, Jr. That was when John was the first presidential candidate of the brand new Libertarian Party. (He and his running mate, the first woman ever to receive an electoral vote, Tonie Nathan, were on the ballot in only 2 states that year.) It wasn’t a very vigorous campaign, but it helped thousands of people to say, “You know, I don’t fit in with either the left or the right; they’re both abusive of liberty.” Besides that electoral vote the Hospers campaign helped to launch a long-term political alignment that is very much with us today, as people increasingly see issues in terms of personal liberty and responsibility, rather than as a battle between two different flavors of statism.
John was a gentleman, thoughtful, and kind. I remember meetings and seminars with him in his office, when he was always engaged, challenging, and willing to reexamine his own views when challenged in turn. He was a scholar and a thinker.
John Hospers was born on June 9, 1918, so he had just reached his 93rd birthday. He had a long life full of interesting experiences and left the world a better place than it would be had he not been here. He will be missed, but his legacy will continue on. He helped to nurture a movement for liberty that broke away from the absurd left/right spectrum. That alone is a worthy monument.
FBI’s New Guidelines Further Loosen Constraints on Monitoring
The New York Times‘s Charlie Savage reports that the FBI is preparing to release a new Domestic Investigations and Operations Guide (DIOG), further relaxing the rules governing the Bureau’s investigation of Americans who are not suspected of any wrongdoing.
This comes just three years after the last major revision of FBI manual, which empowered agents to employ a broad range of investigative techniques in exploratory “assessments” of citizens or domestic groups, even in the absence of allegations or evidence of wrongdoing, which are needed to open an “investigation.” The FBI assured Congress that it would conduct intensive training, and test agents to ensure that they understood the limits of the new authority—but the Inspector General found irregularities suggestive of widespread cheating on those tests.
Agents can already do quite a bit even without opening an “assessment”: They can consult the government’s own massive (and ever-growing) databases, or search the public Internet for “open source” intelligence. If, however, they want to start digging through state and local law enforcement records, or plumb the vast quantities of information held by commercial data aggregators like LexisNexis or Acxiom, they currently do have to open an assessment. Again, that doesn’t mean they’ve got to have evidence—or even an allegation—that their target is doing anything illegal, but it does mean they’ve got to create a paper trail and identify a legitimate purpose for their inquiries. That’s not much of a limitation, to be sure, but it does provide a strong deterrent to casual misuse of those databases for personal reasons. That paper trail means an agent who might be tempted to use government resources for personal ends—to check up on an ex or a new neighbor—has good reason to think twice.
Removing that check means there will be a lot more digging around in databases without any formal record of why. Even though most of those searches will be legitimate, that makes the abuses more likely to get lost in the crowd. Indeed, a series of reports by the Inspector General’s Office finding “widespread and serious misuse” of National Security Letters, noted that lax recordkeeping made it extremely difficult to accurately gauge the seriousness of the abuses or their true extent—and, of course, to hold the responsible parties accountable. Moreover, the most recent of those reports strongly suggests that agents engaged in illegal use of so-called “exigent letters” resisted the introduction of new records systems precisely because they knew (or at least suspected) their methods weren’t quite kosher.
The new rules will also permit agents to rifle through a person’s garbage when conducting an “assessment” of someone they’d like to recruit as an informant or mole. The reason, according to the Times, is that “they want the ability to use information found in a subject’s trash to put pressure on that person to assist the government in the investigation of others.” Not keen into being dragooned into FBI service? Hope you don’t have anything embarrassing in your dumpster! Physical surveillance squads can only be assigned to a target once, for a limited time, in the course of an assessment under the current rules—that limit, too, falls by the wayside in the revised DIOG.
The Bureau characterizes the latest round of changes as “tweaks” to the most recent revisions. That probably understates the significance of some of the changes, but one reason it’s worrying to see another bundle of revisions so soon after the last overhaul is precisely that it’s awfully easy to slip a big aggregate change under the radar by breaking it up into a series of “tweaks.”
We’ve seen such a move already with respect to National Security Letters, which enable access to a wide array of sensitive financial, phone, and Internet records without a court order—as long as the information is deemed relevant to an “authorized investigation.” When Congress massively expanded the scope of these tools under the USA Patriot Act, legislators understood that to mean full investigations, which must be based on “specific facts” suggesting that a crime is being committed or that a threat to national security exists. Just two years later, the Attorney General’s guidelines were quietly changed to permit the use of NSLs during “preliminary” investigations, which need not meet that standard. Soon, more than half of the NSLs issued each year were used for such preliminary inquiries (though they aren’t available for mere “assessments”… yet).
The FBI, of course, prefers to emphasize all the restrictions that remain in place. We’ll probably have to wait a year or two to see which of those get “tweaked” away next.
Ranking the Charter School Networks
Much of the response to the study I released last week has focused on the relative academic performance rankings of California’s charter school networks. That wasn’t the point of the study, which focuses on whether or not philanthropy + charter schooling can replace venture capital and competitive markets as a mechanism for scaling-up the best education services. Rather than try to fight the tide, I thought I’d just share the relevant rankings in an easy-to-link form, and once the debate about them dies down we can return to the larger policy point.
With that in mind, the first table below lists the top 15 charter school networks in terms of performance on the California Standards Tests, adjusted for student factors and peer effects. For comparison, two non-charter schools are included: the academically selective elite public prep schools Gretchen Whitney and Lowell–both of which feature in most lists of the top public schools in the country. There are 68 networks with the necessary data, but the lowest grant rank is 61 because eight of the networks received no philanthropic funding at all.
Next is a list of the charter networks that philanthropists have invested-in most heavily, with a view to replicating their models. Notice the minimal overlap? I repeat this comparison in the study with Advanced Placement test performance, and find the same pattern (it’s just slightly worse).
Every one of the above networks received substantially more grant funding individually than the top three highest achieving networks… combined.
Corrupt Obamacare Waiver Process Is Like a Scene from Atlas Shrugged
In a column about the revolving door between big government and the lobbying world, here’s what the irreplaceable Tim Carney wrote about the waiver process for folks trying to escape the burden of government-run healthcare.
Congress imposes mandates on other entities, but gives bureaucrats the power to waive those mandates. To get such a waiver, you hire the people who used to administer or who helped craft the policies. So who’s the net winner? The politicians and bureaucrats who craft policies and wield power, because this combination of massive government power and wide bureaucratic discretion creates huge demand for revolving-door lobbyists. It’s another reason Obama’s legislative agenda, including bailouts, stimulus, ObamaCare, Dodd-Frank, tobacco regulation, and more, necessarily fosters more corruption and cronyism.
This seemed so familiar that I wondered whether Tim was guilty of plagiarism. But he’s one of the best journalists in DC, so I knew that couldn’t be the case.
Then I realized that there was plagiarism, but the politicians in Washington were the guilty parties. As can be seen in this passage from Atlas Shrugged, the Obama Administration is copying from what Ayn Rand wrote — as dystopian parody — in the 1950s.
Nobody professed to understand the question of the frozen railroad bonds, perhaps, because everybody understood it too well. At first, there had been signs of a panic among the bondholders and of a dangerous indignation among the public. Then, Wesley Mouch had issued another directive, which ruled that people could get their bonds “defrozen” upon a plea of “essential need”: the government would purchase the bonds, if it found proof of the need satisfactory. there were three questions that no one answered or asked: “What constituted proof?” “What constituted need?” “Essential-to whom?” …One was not supposed to speak about the men who, having been refused, sold their bonds for one-third of the value to other men who possessed needs which, miraculously, made thirty-three frozen cents melt into a whole dollar, or about a new profession practiced by bright young boys just out of college, who called themselves “defreezers” and offered their services “to help you draft your application in the proper modern terms.” The boys had friends in Washington.
This isn’t the first time the Obama Administration has inadvertently brought Atlas Shrugged to life. The Administration’s top lawyer already semi-endorsed “going Galt” when he said people could choose to earn less money to avoid certain Obamacare impositions.
So if you want a glimpse at America’s future, I encourage you to read (or re-read) the book. Or at least watch the movie.
Overcommitted in Afghanistan
Saturday’s Washington Post ran a story titled “Lawmakers Push for a New Afghan Strategy.” Notably, the number of conservative policymakers looking for a change is growing significantly, as evidenced by the comments of the former governor of Utah (and possible presidential candidate), Republican John Huntsman and Rep. Charlie Bass (R-NH) on CNN yesterday.
If they would like a serious proposal that would bring our level of commitment in line with our interests in Afghanistan, they should have a look at this just-released paper [.pdf] by Joshua Rovner of the U.S. Naval War College and Austin Long of Columbia University. Rovner and Long take aim at the two central justifications for the present strategy–fear of “safe havens” and concerns over instability in Afghanistan putting Pakistan’s nuclear weapons up for grabs–and judge that the current strategy has little to do with those objectives. Instead, they propose a significant change in strategy that would secure our vital interests in that nation at a cost more commensurate with our interests.
One thing that policymakers should know about the issue is that public opinion is resoundingly in favor of withdrawal, not staying the current course indefinitely. As Rovner and Long point out, a March Washington Post poll showed that 73 percent of Americans thought that the United States should “withdraw a substantial number of U.S. combat forces from Afghanistan this summer” (although only 39 percent expected that Washington would do so).
Increasing numbers of Republicans seem to be recognizing that the mainstream neoconservative view that we need to stay in numbers in Afghanistan forever is out of step with both sound strategic judgment and public opinion. In a recent House vote on withdrawing from Afghanistan, the number of Republicans voting yes tripled from the last vote on the question (although still a low figure).
If policymakers want to know the responsible way to a more solvent strategy in Afghanistan, they should give the Rovner/Long paper a read. Or they can send staff to our event on the paper here at Cato June 29, featuring Rovner, my colleague Malou Innocent, Joshua Foust of the American Security Project, and Michael O’Hanlon of the Brookings Institution.
Marriage and the Courts
In today’s Britannica column, I write about yesterday’s 44th anniversary of the Supreme Court’s Loving decision and its relevance to the current Perry v. Schwarzenegger (now actually Perry v. Brown) case. It includes videos from Cato’s recent forum, from the American Foundation for Equal Rights, and from the 1967 ABC News report on the Supreme Court decision. You really should watch that one.
I also note some of the objections to the Perry case:
When it comes to the Perry v. Schwarzenegger case, there are legitimate federalist and democratic objections. One might say that marriage law has always been a matter for the states, and it should stay that way. Let the people of each state decide what marriage will be in their state. Leave the federal courts out of it. Federalism is an important basis for liberty, and that’s a strong argument. There’s also a discomfiting argument that a Supreme Court decision striking down bans on gay marriage is undemocratic, that it would be better to let the political process work through the issue. Some people, even supporters of gay marriage, warn that a court decision could be another Roe v. Wade, with decades of cultural war over an imposed decision.
For a response, read the column.
Oh, Where’d I Put Those Facts?
A few days ago the New York Times offered the following explanation for why public college and university students graduate with less debt than people attending for-profit schools:
[F]or-profit schools sometimes encourage students to borrow privately from the school, rather than from federal programs, which often have lower rates and loan forbearance for those who fall ill or become jobless.
Of course! Evil “subprime” education has teamed up with evil subprime lending to form the Dastardly Legion of Subprime Higher Ed!
Or maybe not. It could also be that the Old Grey Lady is losing her memory a bit and forgot about the, oh, $75 billion or so that public colleges get directly from state and local taxpayers to keep their prices down.
Darn those meddling facts.
Do Forced Mortgage Writedowns Create Wealth?
Matt Yglesias recently added his voice to the long running calls for principal reductions on underwater mortgages. His argument is that such would create additional spending. Or as he puts it, “I think that if people in Phoenix got a principal writedown on their mortgages, they’d have more disposable income and might go to the bar more.”
What Matt, and others calling for forced principal reductions, miss, or choose to ignore, is that while a mortgage represents a liability to the borrower, it is an asset to someone else. Matt’s logic, which I agree with here, is that an increase in one’s net wealth (via a reduction in one’s liabilities) should increase one’s consumption. To complete the analysis, however, we must extend that same logic to the holders of the asset, so that a reduction in the value of their asset (the mortgage) should reduce their spending. Taking x from A and giving x to B is not going to increase A+B. To assert otherwise is to engage in Enron-style social accounting.
Now if you want to argue that the borrower has a higher marginal propensity to consume than the investor (say, a retiree living off a pension) then provide some support for that position. It is just as likely that those on the losing end will take efforts to protect themselves from this loss, decreasing overall social wealth. So what one has to show is that the marginal propensity to consume for the borrower is so much larger than that for the investor that it offsets any costs from the investor trying to protect his investment from theft.
Now if you simply favor redistribution of wealth for its own sake, just say so. If you hate investors and love defaulting borrowers, then just say so. Personally, I don’t believe the role of government should be to take from A to give to B. I just ask that we stop pretending, in the absence of compelling evidence, that redistribution of wealth is the same as wealth creation.
Jay Greene’s Great New Manifesto
Education scholar Jay Greene has a great new pamphlet called Why America Needs School Choice. Concise and very readable, it does a fine job of introducing the general public to the arguments and evidence in favor of market forces in education. In the process, it debunks six “canards” put forward by defenders of the status quo school monopoly.
Of particular value is Jay’s explanation of why existing “school choice” policies, while often producing positive results, have not yet transformed American education. He notes that these existing programs are hobbled by enrollment limits and regulations, and thus represent only dim shadows of what truly free and competitive education marketplaces would offer. I couldn’t agree more! In fact, the manifesto might more precisely be called Why America Needs a Competitive Education Marketplace, though perhaps that would have narrowed its appeal.
One minor quibble: On page 46, Jay writes that:
No private school choice program has been eliminated legislatively. Aside from a few adverse state court decisions, every choice victory is permanent, and every defeat is temporary.
The implication is that legislative and court action are the only avenues by which choice programs can be overturned. A third, public referendum, exists–and was responsible for the repeal of a Utah school voucher program in 2007. Would-be reformers should remember that lesson: unless the public understands and accepts the value of a policy, it may well overturn it before the first student ever participates. Manifestos like Jay’s are a good way to help spread that understanding.
A more significant problem with this particular passage is that it seems to imply that every “choice” program is a victory, and it asserts every victory is permanent. There is good reason to conclude that neither is the case.
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