Archive for October, 2011
Beating Back Big (Ed.) Brother?
It certainly seems quixotic to try to reverse the federal invasion of American education—it’s “for the children,” for crying out loud!—but there are signs that the forces of constitutional and educational good might be making progress. The fact of the matter is that people seemingly across the ideological spectrum have had it with the illogical, rigid, and failed No Child Left Behind Act, and very few people want to keep that sort of thing in place.
What’s the evidence of this?
For one, both Senate Republicans and Democrats are putting out NCLB reauthorization bills that would significantly reduce the mandates the current law puts on states, including the hated and utterly unrealistic full-proficiency-by-2014 deadline. On the House side, Republicans have for months been advancing bills aimed at reducing the size and prescriptiveness of Washington’s edu-occupation. The White House, too, has been arguing that NCLB is far too bureaucratic. Finally, GOP presidential candidates are returning to what was, before the “compassionate conservatism” of George W. Bush, an obvious Republican position: there should be no U.S. Department of Education whatsoever.
So perhaps NCLB will be remembered as the high-water mark of federal school control.
Perhaps, but we’re nowhere near the promised land yet.
First, there is the extremely troubling way the Obama administration is pushing NCLB aside: issuing states waivers from the law, but only if they implement administration-dictated measures, including ”college and career ready standards,” a euphemism for federal curriculum control. But even if they were demanding that states adopt universal private school choice, this would be extremely dangerous, and far beyond just education. The administration is for all intents and purposes unilaterally making law: no separation of powers, no Congressional approval—nothing! Essentially, the rule of law is being replaced by the rule of man, and no one should stand for that even if they think, as I do, that No Child Left Behind is an absolute dud. It reminds me of of one of my all-time favorite movie scenes.
And then there are those federal standards, the supposedly “state-led and voluntary” Common Core standards that Washington just happens to have repeatedly shoved onto states, whether through Race to the Top or waivers. They are perhaps the greatest threat to educational freedom we’ve yet seen, holding the potential to let Washington dictate what every child in America will learn, no matter how controversial, or unproven, or unfit for any kids who are not “the average.”
Fortunately, resistance to these, too, seems to be gaining traction. Perhaps the most heartening evidence is Prof. Jay Greene having been invited a few weeks ago to testify on national standards before the House Subcommittee on Early Childhood, Elementary, and Secondary Education. Jay terrifically summarized the myriad logical and empirical failings of national standards generally, and the Common Core specifically, and having his testimony out there is useful in and of itself. But more important is that at least some people in Congress are paying attention to this largely—and intentionally—under-the-radar conquest. Meanwhile, there is evidence that in at least some states that have adopted the Common Core people are becoming aware of it and starting to ask questions. At the very least, these happenings offer reason to hope that national standards supporters won’t keep getting away with just repeating the fluff logic of “a modern nation needs a single standard, and don’t worry, the Common Core has been rated as good by all us Common Core supporters.”
What has for a long time seemed impossible is suddenly feeling a bit more plausible: withdrawing the Feds from our kids’ classrooms. But there’s a huge amount still to do, and gigantic threats staring us in the face.
The Opposition in Venezuela Doesn’t Get It
Venezuela is in full campaign mode as six candidates vie for the nomination of the Coalition for Democratic Unity (MUD is its Spanish acronym), the opposition movement that will nominate a single candidate to face Hugo Chávez in the October 2012 presidential election. The MUD primary will take place on February 12.
After 13 years of socialist rule that has crippled Venezuela’s economy, and even created shortages of fuel in the oil-rich South American nation, one would expect the opposition candidates to signal a bold U-turn from the failed big-government policies of Hugo Chávez. Unfortunately, that doesn’t seem to be the case.
Let’s look, for example, at Primero Justicia (Justice First), the party whose candidate, Henrique Capriles Rodonsky, is leading in the polls. Capriles doesn’t say much about the economic model he favors. His statements are limited to generalities such as “the only thing I’m obsessed about is that Venezuela has progress.” As governor of the state of Miranda, Capriles likes to compare his approach to that of former Brazilian president Lula da Silva: decent macroeconomic stewardship complemented by generous social programs.
However, Primero Justicia’s platform seems to be a little more specific in its views on the role of government in society. It claims to support a “social-humanist state” that stands between the “social bureaucratic state that provides inefficient social services in a monopolist way and the minimalist neo-liberal state that gives up on its social responsibilities.” As for the economic model that Primero Justicia favors, the platform says that it “stands against the socialist planned economy and … the [classical] liberal tendencies that turn the market into a dogma.” In simple terms, Primero Justicia sees itself as a Third Way alternative between Hugo Chávez’s “Socialism of the 21st Century” and what it claims to be the “neo-liberal dogma.”
I believe that Venezuela needs a decisive rupture from the failed big-government policies of the past, and not just a lighter version of socialism. Nonetheless, a modern social democratic party is certainly a far better alternative for the country than Hugo Chávez. Unfortunately, on the campaign trail Primero Justicia’s officials seem eager to out-compete Chávez in promising more government handouts to Venezuelans. For example, the daily El Universal published a statement [in Spanish] yesterday from Primero Justicia’s chairman Julio Borges where he lambasted Chávez for not spending enough on social programs. He said that his party would use oil revenues to create a Social Security Fund that would give pensions “to all Venezuelans, regardless of whether they had formal employment or not, and even to housewives.”
Any observer of Venezuela’s modern history would say, “Here we go again.” For many decades, Venezuelan politicians, either in government or in the opposition, have seen the government (and particularly oil revenues) as an infinite source of wealth that simply needs to be distributed among all Venezuelans. As Borges previously stated, “every family would have 1.6 billion bolivares [approximately $375,000] if oil resources were distributed fairly.”
Henrique Capriles will formally launch his presidential candidacy tomorrow. Venezuelans have other pressing concerns besides the economy that will play a major role in next year’s election, such as the staggering rise in crime (Venezuela stands now as the most violent country in South America) and the steady erosion of civil and political freedoms. However, Capriles is ill-advised in thinking that he can beat Chávez by playing the populist card of offering yet more government handouts to Venezuelans.
Venezuelans deserve a real alternative to Chávez. They deserve not only a candidate that promises a return to democratic rule of law, but also someone who pledges to break their dependency on government. The election in October 2012 should be something more than choosing a distributor-in-chief at Miraflores Palace.
Why Slovakia May Not Support Europe’s Bailout Plan
Slovakia is set to vote today on the European bailout plan and may well become a holdout. As my colleague David Boaz noted yesterday, this is due to Slovakia’s libertarian speaker of the house, Richard Sulik, who spoke at a Cato Institute conference in Bratislava last year, and who opposes bailouts of Greece and other EU countries based on sound ethical, political, and economic reasoning. Greece is already bankrupt and a bailout will only add to the country’s debt; an EU “rescue” will continue to create moral hazard, thus encouraging bad policies by reckless governments; relatively poorer and better behaved Slovakia should not be forced to support the irresponsible governments of richer European countries; the EU’s response to the Greek debt crisis has led to blatant violations of EU and European Central Bank rules, thus undermining democratic principles and the EU itself; the scare stories of not approving the bailout should not be believed; the best solution is for Greece is to declare bankruptcy once and for all.
In this document by his Freedom and Solidarity Party, Richard Sulik lays out his party’s opposition to the bailout fund. It is consistent with the views of other leading scholars including that of John Cochrane of the University of Chicago (and a Cato adjunct scholar) as expressed in his recent Wall Street Journal op-ed on how to save the Euro.
Sulik has tapped into popular sentiment among Europeans about the “democracy deficit,” or huge gap between the designs of Europe’s ruling elites and the desires of the region’s citizens. The widespread (and accurate) perception of Eurocrats imposing their agenda on Europe to the benefit of their cronies (e.g., big business, labor unions, and politicians in power) and at the expense of the majority is becoming increasingly difficult to ignore. The Slovak government, which supports the bailout, may well fall on account of this vote, but the prime minister has already indicated that the vote on the bailout fund will be held repeatedly until it is approved. (No doubt there will be little possibility of a repeat vote repealing the bill.)
On a related note, a new Finnish think tank, Libera, provides more evidence that Europeans are rethinking big government. It published a study today which reassesses the record of the Swedish welfare state and praises the numerous market reforms that country has introduced out of necessity since the 1990s.
The Lives of Others 2.0
Tattoo it on your forearm—or better, that of your favorite legislator—for easy reference in the next debate over wiretapping: government surveillance is a security breach—by definition and by design. The latest evidence of this comes from Germany, where there’s growing furor over a hacker group’s allegations that government-designed Trojan Horse spyware is not only insecure, but packed with functions that exceed the limits of German law:
On Saturday, the CCC (the hacker group) announced that it had been given hard drives containing “state spying software,” which had allegedly been used by German investigators to carry out surveillance of Internet communication. The organization had analyzed the software and found it to be full of defects. They also found that it transmitted information via a server located in the United States. As well as its surveillance functions, it could be used to plant files on an individual’s computer. It was also not sufficiently protected, so that third parties with the necessary technical skills could hijack the Trojan horse’s functions for their own ends. The software possibly violated German law, the organization said.
Back in 2004–2005, software designed to facilitate police wiretaps was exploited by unknown parties to intercept the communications of dozens of top political officials in Greece. And just last year, we saw an attack on Google’s e-mail system targeting Chinese dissidents, which some sources have claimed was carried out by compromising a backend interface designed for law enforcement.
Any communications architecture that is designed to facilitate outsider access to communications—for all the most noble reasons—is necessarily more vulnerable to malicious interception as a result. That’s why technologists have looked with justified skepticism on periodic calls from intelligence agencies to redesign data networks for their convenience. At least in this case, the vulnerability is limited to specific target computers on which the malware has been installed. Increasingly, governments want their spyware installed at the switches—making for a more attractive target, and more catastrophic harm in the event of a successful attack.
With Friends Like Sen. Sessions, Free Trade Is in Trouble
According to a story in Politico today, Senator Jeff Sessions of Alabama has been whipping his Republican colleagues to vote in favor of the China currency legislation that appears to be headed for passage in the Senate. (My Cato colleague Dan Ikenson has explained why raising tariffs on imports from China would be a mistake.)
The Politico story says that Sessions is “traditionally a proponent of free trade,” but his actual voting record indicates otherwise. According to the trade vote data base we maintain on the home page of the Herbert A. Stiefel Center for Trade Policy Studies at Cato, Sen. Sessions has voted in favor of lower trade barriers on a bare majority (26 out of 49) of the significant trade votes we’ve recorded.
Since 1997, Sen. Sessions has voted in favor of protectionist farm bills (2002, 2007, 2008), banning safety-certified Mexican trucks from U.S. roads (2007), country-of-origin labeling (2003), the WTO-illegal Byrd amendment (2003, 2005), the original Schumer-Graham bill to impose a 27.5 percent tariff against imports from China (2005), sugar import quotas (1999, 2000, 2001), and steel import quotas (1999)
Meanwhile, he’s voted against the Morocco free-trade agreement (2004), trade promotion authority (1998, 2002), and normal trade relations with Vietnam (2001) and China (1997, 1999).
And to top it all off, it was Sen. Sessions who single-handedly scuttled renewal last year of the Generalized System of Preferences, the long-standing program that had allowed certain imports from poor countries to enter the United States duty free. As my Cato colleague Sallie James has chronicled (here and here), the good senator refused to allow the program to be renewed because of a dispute affecting a small number of his constituents who are employed making sleeping bags.
Like too many of his fellow senators, Sen. Sessions supports our freedom to trade only as long as it does not affect any noisy special interests in his own state.
Tea Party, Meet Occupy Wall Street. OWS, Tea Party.
Broad political movements are going to have none of the coherence that we demand of ourselves in ideological movements like libertarianism. The Tea Party has some people with views that libertarians reject and many that we embrace. Occupy Wall Street has a lot of people with views that libertarians reject and some that libertarians embrace—freedom from police abuse being one. (Such a favor the NYPD officer who pepper-sprayed female protesters did to OWS by driving attention and sympathy its way.)
That’s all caveat to sharing an image created by James Sinclair that’s making waves on the Facebook. It makes a hopeful statement, I think, about the Occupy Wall Street movement and its potential or actual kinship with Tea Partyism. There’s something wrong in the country, and this image suggests that there might be consensus on the framing of what’s wrong: the unity of government and corporate power against people’s freedom and prosperity.
There are plenty of reasons to reject the possibility of alliance between Tea Partyism and OWS, but not necessarily good ones. The easiest out is to pour this new wine into old bottles and characterize OWS as dirty hippies using retrograde protest tactics. Many are kinda like that. But that stuff was a couple of decades ago. No, wait—four decades ago. These kids have no direct knowledge or experience of, say, Kent State, and older observers might be too prone to fitting them into a pattern that doesn’t exist for them.
To the extent the substance of their grievance is, or can be turned to, corporations’ use of government power to win unjust power and profits for themselves, that’s a grievance I can sit in a drum circle for.
Ron Paul’s Success
The Washington Post reports that Ron Paul “is enjoying a surge in support and the most high-profile campaign of his life. ”
Paul’s unwavering ideals of small government and free markets, which rendered him a quirky sideshow for decades, have gained traction amid concerns about rising government debt. His longtime opposition to the existence of the Federal Reserve, income tax and foreign aid is now shared by many in his party….
[Ron] Christie noted that Perry and former House speaker Newt Gingrich have been pushing anti-Federal Reserve stances in recent television debates. Other strategists observe that all the candidates have started peppering their speeches with references to the Constitution. Paul’s years of insistence on small government are widely considered to have paved the way for the emergence of the tea party movement.
Over the past few months various reporters have asked me about Ron Paul’s greater prominence this year as compared to 2007, and I’ve generally told them something like this:
In 2007 (which is when he got the most attention in the last cycle) Ron Paul warned that an economy based on debt and cheap money from the Federal Reserve was not sustainable, but the economy was booming and nobody wanted to listen. After the crash, they started listening. In 2007 he said we should replace the Federal Reserve and fiat money with the gold standard, and even some libertarians said things like, “What’s the beef with the Fed? They’ve dramatically reduced the volatility of the business cycle while achieving low, reasonably constant inflation.” Nobody’s scoffing at criticism of the Fed now. In 2007 Ron Paul criticized excessive federal spending, but with a Republican in the White House Republicans weren’t so interested. With even more excessive spending by a Democratic president, that’s become a central issue of the era. In 2007 Ron Paul criticized endless military intervention, but most Republicans were content to repeat, “The surge is working.” Now even Republicans are getting weary of war. In 2007 Ron Paul said that Congress and the president should not act outside their powers under the Constitution, but Republicans didn’t want to hear about unconstitutional acts by a Republican president. Now, after the bailouts and the health care takeover and the unauthorized war in Libya, all the Republican candidates are talking about restoring the Constitution.
It’s not that Ron Paul has moved closer to the center but rather that the center of American political discussion has moved closer to him.
Like many libertarians, I’ve had my differences with Ron Paul on trade policy, immigration, gay rights and federalism, and the unsavory company he keeps. But as long as he keeps recruiting people, especially young people, to the cause of limited constitutional government, sound money, and non-intervention, I’m glad to see him making an impact.
Question for Candidates: Yes or No to a National ID?
Back in March of this year, with a May deadline for REAL ID compliance looming, the U.S. Department of Homeland Security quietly kicked the can down the road. It once again changed the date on which states would have to implement federal standards for their drivers’ licenses and IDs.
The original deadline was three years after the law’s May 2005 passage. It has now been more than five years and there’s no REAL ID thanks to resistance from states around the country. Congress has not moved to repeal this failed law. In fact, it still appropriates money to REAL ID in the Homeland Security appropriations bill.
The DHS has now set a new compliance deadline at January 15, 2013. That’s five days before the next presidential term begins on January 20, 2013. Indeed, the period between the election and the inauguration is when the question of whether to enforce REAL ID against the states will be decided.
Which puts a question before the Republican candidates vying for the highest political office. Where do you stand on the national ID issue? If your Transportation Security Administration is turning fliers away from airports because their states aren’t going along with this federal surveillance mandate, are you going to stand by the feds or stand by the states and people who say no to having a national ID?
The question is a nice bellwether for Republicans on both federalism and essential American liberty.
Interesting Quotes from the National Drug Threat Assessment Report
Do you need further proof that the war on drug is a failure? Then just read the 2011 National Drug Threat Assessment report recently published by the Justice Department. Here are some interesting quotes:
- The abuse of several major illicit drugs, including heroin, marijuana, and methamphetamine, appears to be increasing, especially among the young. [pag. 1]
- The overall availability of illicit drugs in the United States is increasing. Heroin, marijuana, MDMA [ecstasy], and methamphetamine are readily available, and their availability appears to be increasing in some markets. [pag. 24]
- An estimated 8.7 percent of Americans aged 12 or older—or 21.8 million individuals—were current illicit drug users in 2009, a statistically significant increase from 8.0 percent in 2008. [pag. 1]
- Major Mexican-based TCOs [trasnational criminal organizations] and their associates are solidifying their dominance of the U.S. wholesale drug trade and will maintain their reign for the foreseeable future. [pag. 7]
- Mexican-based TCOs were operating in more than a thousand U.S. cities during 2009 and 2010 [last year’s report put the figure at 270 cities]. [pag. 8]
You can read the full report here.
Sargent’s Sharp Pencil
Today, The Royal Swedish Academy of Sciences announced that it had awarded this year’s Nobel Prize in Economic Sciences to Prof. Tom Sargent (along with Prof. Chris Sims). Prof. Sargent is not only a high priest of economic theory — the rational expectations variety — but also one of the last in a dying breed of economists who can read a balance sheet and wield a sharp pencil.
For students of hyperinflation, there is no better place to start than Prof. Sargent’s classic: Rational Expectations and Inflation (Second Edition, 1993). That’s where I began when I started to grapple with the problem of estimating Zimbabwe’s hyperinflation.
In my study of Zimbabwe’s inflation, Prof. Sargent’s work proved to be invaluable. Prof. Sargent’s theoretical rigor and ability to do sharp pencil work on central bank balance sheets, fiscal accounts and many other relevant data, allowed me to clear away a great deal of Zimbabwean underbrush.
Prof. Sargent’s Rational Expectations and Inflation remains one of the best examples of economic sharp pencil work. The details of just how Germany ended its infamous hyperinflation are all there. For example, to put its fiscal house in order and stop its hyperinflation, Germany, among other things, slashed the number of government employees by 25 percent with a decree of 27 October 1923. Where there is a will, there is a way.
DoT’s Road-Sign Mandate: ‘Wrong Way,’ Not Just ‘Slow Down’
In Washington, one is expected to be grateful for even small breakouts of relative sanity. Consider, for example, the Department of Transportation’s decision to scale back its widely blasted regulations meant to force local and state governments around the country to replace perfectly good street and road signs with new signage of prescribed lettering, size and “retroreflectivity.” (If you missed the announcement — it was dropped into the news just before Labor Day — here are the Detroit News and New York Times accounts.) Instead of requiring local authorities to replace all old signs by 2018, DoT will now (with some exceptions) let them wait until signs wear out before having to follow the new design standards. That means New York City won’t be obliged to drop many other projects in favor of a crash program to replace its more than 300,000 signs, Delaware can spread the $60 million plus it expects to spend over a longer period, and so forth for thousands of other towns, counties and states that had flinched at billions in new mandated spending.
The delay in implementation is welcome, but what’s still absurd is the idea of there being any mandate at all. The Framers prescribed a federal government of limited powers, which did not include the power to prescribe the retroreflectivity, size or lettering of everyone’s local street signs. Supposedly, older drivers will find the new big-and-reflective signage a boon, though I suspect no one has actually asked them whether they expect their navigation to improve once the town has ripped out all their familiar signs. And while safety may be advanced by standardized designs for, say, stop signs and one-way arrows, the great bulk of signage, on street names in particular, will work fine without national standardization, which indeed may choke off fruitful experimentation adapted to local conditions.
One group quoted as supportive of the full mandate is the American Road and Transportation Builders Association. According to the group’s website: “On behalf of its more than 5,000 public and private sector members, ARTBA’s primary goal is to aggressively grow and protect transportation infrastructure investment” — that is, to keep more and more money flowing for roads and their improvers.
Rep. Pompeo Wants to Terminate the Economic Development Administration
Chris Edwards and I have repeatedly called for policymakers to get specific when it comes to spending cuts. Policymakers who want to cut spending should at least pick an agency or program and work to have it eliminated. Rep. Mike Pompeo (R-KS) has done this by introducing legislation to terminate the Department of Commerce’s Economic Development Administration.
What I really like about Pompeo’s justification for eliminating the EDA is his recognition that the federal government should not be subsidizing local affairs:
I believe investing should be done by private citizens with their own money, not by federal agencies. I have spent my time in Congress working to create an environment that encourages such investment and risk-taking behavior. The Economic Development Administration is a White House earmark machine and, for the past 45 years, has redistributed wealth for purely local projects. In light of the nation’s $14.8 trillion debt, the federal government simply must focus on its core constitutional responsibilities.
No area of the country has been left out. In fact, there have been a number of projects in the Fourth Congressional District of Kansas that have received EDA grants. I do not fault the grant recipients—the money was available, the grant requirements were met and these applicants were simply responding to a federally created incentive system. The problem is that nearly all of these projects would have gone forward without EDA funds as the source for a tiny fraction of total project funding. With state, local and, most importantly, private sector sources of funding, economic development projects can—and should—move forward without utilizing the EDA as a crutch.
Kansas taxpayers should not be funding local projects all across the country, just as citizens in the other 49 states need not be funding our local projects. Imagine the Kansas projects that would have created jobs in our state had the EDA not drained billions of dollars from taxpayer pockets over the decades of EDA’s existence. That is the real job-destroying legacy of EDA.
See this Cato essay for more on why the Economic Development Administration should be terminated.
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