We’ve often deplored the continued push of criminal prosecution into matters that were once considered more suitable for regulation or for the operation of civil law. A little-noted report a few weeks back in the Los Angeles Times may indicate the next milestone in overcriminalization:

The U.S. attorney has launched a fraud investigation to determine whether Los Angeles city officials ignored federal laws designed to protect the disabled when building or fixing up housing. …

The investigation spans January 2001 to the present, the letters said. If violations are uncovered, city agencies that used federal housing funds could face financial penalties, lose out on future grants or possibly become the subject of a criminal investigation, said [city official] Bill Carter…

Disabled activists sought an investigation because, to quote the LAT again,

In testimony and in person, activists alleged that doors were sometimes too heavy for wheelchair users to open, elevators were not working in at least one city-funded building, and managers either refused to rent to wheelchair users or did not have apartments available for them, [advocate Becky] Dennison said.

The activists also felt ignored because various management recommendations they made to local officials had been ignored. They already have a right to file civil suits over their grievances: indeed, shortly after the U.S. Attorney’s investigation came to light three advocacy groups did file a civil suit against the city.

There are very real problems of fraud — plain old graft and money-raking — on the L.A. public housing scene. But the idea of redefining fraud to include ADA noncompliance is a different matter. If taken seriously, it would mean exposing ordinary as well as dishonest local officials across the country to the specter of criminal liability. It’s notoriously hard to assure that either new or renovated buildings are 100% compliant with ambitious interpretations of the law; a design fix that satisfies three ADA consultants may displease a fourth. Criminal liability should arise from very clear, preannounced standards of conduct. That’s not the ADA.

Maybe the U.S. Attorney’s office is just raising the criminal issue as a bit of bravado to please its friends in the advocacy world and strong-arm the city into settling. But as playwrights know, if a shotgun is shown above the fireplace in Act I, by the middle of Act III a shot will ring out. This misguided extension of federal fraud law is worth challenging now.

Prison Terms for Not Installing ADA Ramps? is a post from Cato @ Liberty - Cato Institute Blog

If you missed the news (Obama actually made a “big” speech about it), the federal government, along with 49 state AGs, reached a settlement with the largest mortgage servicers over servicing violations.  In some ways, what little detail has been offered raises more questions than answers.

Perhaps the biggest question is how much of the actual losses will be borne by the banks and how much will be passed along to investors, who were not even represented at the table.  One hears that both first and second mortgages would be written down “in proportion” so that if the first loan is reduced 10%, then the second is also reduced 10%.  Obviously this flies in the very face of what a first and second loan are.  The first shouldn’t take any loss until the 2nd is completely wiped out.  But since investors often hold the first while banks hold the second, it looks like Obama has blessed the banks sticking a good deal of their losses to the investors, which include pension funds, retirement accounts etc.

And while I was of course moved by the touching picture of a couple and their child featured so predominantly on the settlement’s website, I was also left wondering, what is the process for determining which foreclosed homeowners receive assistance.  The settlement is actual quite clear that  “$1.5 billion will be distributed nationwide to some 750,000 borrowers” but that such borrowers need not have actually been harmed.  This really seems little more than a lottery trying to pass as consumer protection.  But then I suspect your chances for getting a piece are bigger if you happen to live in a swing state (sorry California).

What really worries me is the massive payment to states.  Of course they claim this is going to help “fund consumer protection” but then we also told that the tobacco settlements would help smokers; it instead turned into state government slush funds.  Even more troubling is the high probability that such funds will flow to various non-profits, whatever the current incarnation of ACORN is calling itself.

Fortunately the entire settlement has to be approved by a federal judge.  Given that these issues really should have been decided in the courts in the first place (separation of powers, anyone?), this is the opportunity for the courts to ask for the AGs and Obama to actually produce some evidence of wrong-doing.  And also to ask that parties actually harmed be the ones compensated.  Anything else would be a perversion of justice.

Questions and Thoughts on the Mortgage Settlement is a post from Cato @ Liberty - Cato Institute Blog

My Cato colleague John Cochrane – who is way smarter than I am — has a generally excellent op-ed in today’s Wall Street Journal on ObamaCare’s contraception mandate:

Salting mandated health insurance with birth control is exactly the same as a tax—on employers, on Catholics, on gay men and women, on couples trying to have children and on the elderly—to subsidize one form of birth control…

The tax rate and spending debates that occupy the media are a small part of the effective taxes and spending that the government achieves by these regulatory mandates…

The natural compromise is simple: Birth control, abortion and other contentious practices are permitted. But those who object don’t have to pay for them. The federal takeover of medicine prevents us from reaching these natural compromises and needlessly divides our society…

Sure, churches should be exempt. We should all be exempt.

My only quibble is with his claim, “Insurance is a bad idea for small, regular and predictable expenses.”

That’s generally true. But medicine is an area where, potentially at least, small up-front expenditures (e.g., on hypertension control) could prevent large losses down the road. So it may be economically efficient for health plans to cover some small, regular, and predictable expenses. Both the carrier and the consumer would benefit. In fact, that would be the market’s way of telling otherwise uninformed consumers, “Hey! Controlling your hypertension is a really good for you!” And really, if someone is so risk-averse that they want health insurance with first-dollar coverage of everything – and they’re willing to pay the outrageous premiums that would accompany such coverage — why should we take issue with that?

ObamaCare’s contraceptive-coverage mandate demonstrates that government does  a horrible job of picking only those types of “preventive” services for which first-dollar coverage will leave consumers better off. But I also think advocates of free-market health care generally need to let go of the idea that health insurance exists only for catastrophic expenses.

Cochrane on ObamaCare’s Contraceptive-Coverage Mandate is a post from Cato @ Liberty - Cato Institute Blog

When Ronald Reagan said that big government undermined the economy, some people dismissed his comments because of his philosophical belief in liberty.

And when I discuss my work on the economic impact of government spending, I often get the same reaction.

This is why it’s important that a growing number of establishment outfits are slowly but surely coming around to the same point of view.

• The European Central Bank published a study showing “…a significant negative effect of the size of government on growth.”
• A study by two Harvard economists found that “large adjustments in fiscal policy, if based on well-targeted spending cuts, have often led to expansions.”
• The Organization for Economic Cooperation and Development noted in recent research that welfare programs are economically destructive because they lure people into dependency because “net disposable income would increase despite putting in fewer hours.”
• A study from the International Monetary Fund concluded that “Cuts to pension and health entitlements had the most beneficial effect on economic growth.”

This is remarkable. It’s beginning to look like the entire world has figured out that there’s an inverse relationship between big government and economic performance.

That’s an exaggeration, of course. There are still holdouts pushing for more statism in Pyongyang, Paris, Havana, and parts of Washington, DC.

But maybe they’ll be convinced by new research from the World Bank, which just produced a major report on the outlook for Europe. In chapter 7, the authors explain some of the ways that big government can undermine prosperity.

There are good reasons to suspect that big government is bad for growth. Taxation is perhaps the most obvious (Bergh and Henrekson 2010). Governments have to tax the private sector in order to spend, but taxes distort the allocation of resources in the economy. Producers and consumers change their behavior to reduce their tax payments. Hence certain activities that would have taken place without taxes, do not. Workers may work fewer hours, moderate their career plans, or show less interest in acquiring new skills. Enterprises may scale down production, reduce investments, or turn down opportunities to innovate. …Over time, big governments can also create sclerotic bureaucracies that crowd out private sector employment and lead to a dependency on public transfers and public wages. The larger the group of people reliant on public wages or benefits, the stronger the political demand for public programs and the higher the excess burden of taxes. Slowing the economy, such a trend could increase the share of the population relying on government transfers, leading to a vicious cycle (Alesina and Wacziarg 1998). Large public administrations can also give rise to organized interest groups keener on exploiting their powers for their own benefit rather than facilitating a prosperous private sector (Olson 1982).

In other words, government spending undermines growth, and the damage is magnified by a poorly designed tax policies.

The authors then put forth a theoretical hypothesis.

…economic models argue that the excess burden of tax increases disproportionately with the tax rate—in fact, roughly proportional to its tax rate squared (Auerbach 1985). Likewise, the scope for self-interested bureaucracies becomes larger as the government channels more resources. At the same time, the core functions of government, such as enforcing property rights, rule of law and economic openness, can be accomplished by small governments. All this suggests that as government gets bigger, it becomes more likely that the negative impact of government might dominate its positive impact. Ultimately, this issue has to be settled empirically. So what do the data say?

These are important insights, showing that class-warfare tax increases are especially destructive and that government spending undermines growth unless the public sector is limited to core functions.

Then the authors report their results.

Figure 7.9 groups annual observations in four categories according to the share of government spending in GDP during that year. Both samples show a negative relationship between government size and growth, though the reduction in growth as government becomes bigger is far more pronounced in Europe, particularly when government size exceeds 40 percent of GDP. …we provide new econometric evidence on the impact of government size on growth using a panel of advanced and emerging economies since 1995. As estimates can be biased due to problems of omitted variables, endogeneity, or measurement errors, it is necessary to rely on a broad range of estimators. …They suggest that a 10 percentage point increase in initial government spending as a share of GDP in Europe is associated with a reduction in annual real per capita GDP growth of around 0.6–0.9 percentage points a year (table A7.2). The estimates are roughly in line with those from panel regressions on advanced economies in the EU15 and OECD countries for periods from 1960 or 1970 to 1995 or 2005 (Bergh and Henrekson 2010 and 2011).

These results aren’t good news for Europe, but they also are a warning sign for the United States. The burden of government spending has jumped by about 8-percentage points of GDP since Bill Clinton left office, so this could be the explanation for why growth in America is so sluggish.

Last but not least, they report that social welfare spending does the most damage.

Governments are big in Europe mainly due to high social transfers, and big governments are a drag on growth. The question is whether this is because of high social transfers? The answer seems to be that it is. The regression results for Europe, using the same approach as outlined earlier, show a consistently negative effect of social transfers on growth, even though the coefficients vary in size and significance (table A7.4). The result is confirmed through BACE regressions. High social transfers might well be the negative link from government size to growth in Europe.

The last point in this passage needs to be emphasized. It is redistribution spending that does the greatest damage. In other words, it’s almost as if Obama (and his counterparts in places such as France and Greece) are trying to do the greatest possible damage to the economy.

In reality, of course, these politicians are simply trying to buy votes. But they need to understand that this shallow behavior imposes very high costs in terms of foregone growth.

To elaborate, this video discusses the Rahn Curve, which augments the data in the World Bank study.

As I argue in the video, even though most of the research shows that economic growth is maximized when government spending is about 20 percent of GDP, I think the real answer is that prosperity is maximized when the public sector consumes less than 10 percent of GDP.

But since government in the United States is now consuming more than 40 percent of GDP (about as much as Spain!), the first priority is to figure out some way of moving back in the right direction by restraining government so it grows slower than the private sector.

Data in New World Bank Report Shows that Large Public Sectors Reduce Economic Growth is a post from Cato @ Liberty - Cato Institute Blog

Cato adjunct scholar John H. Cochrane has a terrific piece in the Wall Street Journal today on the Obamacare vs. religious freedom brouhaha. In particular, though it’s not Cochrane’s main point, I thought this was spot-on:

Our nation is divided on social issues. The natural compromise is simple: Birth control, abortion and other contentious practices are permitted. But those who object don’t have to pay for them. The federal takeover of medicine prevents us from reaching these natural compromises and needlessly divides our society.

For those of you who don’t follow education very closely this might seem like a fairly novel point. Unfortunately, this also probably seems novel for many who do follow education, even many who do so professionally. But it shouldn’t, because unlike in health care, government has been the dominant provider of education for well over a century, and social conflict and division have been its constant companions.

Welcome to our war-torn world, health care. Better bring a helmet.

Welcome to Our War-torn World, Health Care is a post from Cato @ Liberty - Cato Institute Blog

One of the issues discussed in my new essay on the Bureau of Indian Affairs (BIA) is the lobbying by groups of American Indians seeking official tribal status. The BIA has the power to confer tribal status, and it does so in a non-transparent manner. With official status comes tribal access to a wide range of federal subsidy programs plus the ability to earn monopoly profits with a casino. The gaining of official status for tribes was one of Jack Abramoff’s specialty services.

The most recent BIA decision to confer tribal status is a classic case. The 221-member Tejon tribe in California received a thumbs up from the BIA in January 2012. The group’s reservation and its tribal status had been dissolved decades ago, but it hired some powerful Washington lobbyists to work their magic. An article in the Bakersfield Californian notes, “In their quest to gain recognition, the Tejons had the help of an unnamed ‘financial backer’ who had paid $300,000-plus to the tribe’s attorneys.” This financial backer was “banking on a casino.”

A Mountain Enterprise story says that once the Tejon tribe’s status was official, “speculation began almost immediately about the tribe’s plans to affiliate with Tejon Ranch Corporation and Las Vegas investors to establish a casino facility.” Famous D.C. lobby shop Patton Boggs earned $120,000 in fees on the deal.

For the Tejons, the lobbyists produced results. There are hundreds of Indian groups who have petitioned the BIA for tribal status, and the BIA only confers status to a few tribes a year. Yet somehow the Tejons managed to jump to the front of the queue. This list (and this one) appear to show that the tribe ranked low on the recognition waiting list at #230 (but I admit I’m not an expert on how the system works).

The tribes who hire lobbyists don’t always win. Here’s a story about the 450-member Muwekma Ohlone of California:

Financed by their own casino sugar daddy, Florida real estate tycoon Alan Ginsburg and his associates, as well as with proceeds from the tribe’s own archaeological consulting firm, the otherwise humble Muwekma have spent millions of dollars on the effort. Much of that money has gone toward procuring the aid of a high-powered Washington, D.C., law firm…. [R]ecognition would open the door for the tribe… to place land in federal trust as a ‘reservation’ on which it could open a casino. Indeed, should they attain recognition, the Muwekma almost assuredly will become the envy of non-gaming tribes from outlying regions of the state who’ve tried and thus far not succeeded at ‘reservation shopping’ — that is, attempting to set up casino operations in urban areas far from their aboriginal homeland.

The Muwekma Ohlone tribe lost an important court ruling last year, which has set back their search for official recognition. In this case, the only winners were the lawyers and lobbyists, who apparently pocketed huge fees from the tribe. This data source shows that lawyers and lobbyists gain about $20 million a year in fees on Indian gaming-related issues. Jack Abramoff alone raised $80 million from half a dozen tribal clients in the early 2000s for lobbying on a wide range of tribal issues.

Indian gaming and other complex regulatory schemes usually generate “rent” or monopoly privileges that groups vie for a manner that is unproductive to society as a whole. When the government confers special benefits through regulation, wealth is channeled to lawyers and lobbyists but the overall economy shrinks due to the misallocation of resources.

The best policy for gaming would be to repeal all government restrictions and to treat gaming like any other industry. That would eliminate rents and the related lobbying, and it would create an equal and competitive playing field for Indians and non-Indians alike.

The good thing about Indian gaming is that it has shown that Indians are every bit as entrepreneurial as other Americans. But gaming is not likely to be a stable platform for long-term Indian economic development. That’s because as tribal and nontribal gaming continues to expand, profit levels in tribal gaming are likely to decline.

A more durable strategy for Indian prosperity is to make institutional reforms on reservations to encourage broad-based investment in a range of industries, as discussed here.

Indian Gaming: The Lobbyists Always Win is a post from Cato @ Liberty - Cato Institute Blog

Regarding legislation to create an ObamaCare “Exchange” in Virginia, the Richmond Times-Dispatch explains:

Republicans at the General Assembly are falling prey to the fallacy of the false alternative…

[H]ere are the real options facing Virginia: (a) federal bureaucrats determine the form of our exchange, or (b) federal bureaucrats determine the form of our exchange. There is no (c)…

Running a health-insurance exchange would cost a lot of money — money Virginia does not have. Since Washington will dictate how it will be run, Washington should pick up the tab.

RTD: ‘Insurance Exchange: Just Say No’ is a post from Cato @ Liberty - Cato Institute Blog

Today the Obama administration will announce, according to early press reports, that ten states (of eleven that applied) will be receiving waivers from key provisions of the No Child Left Behind Act. That’s right, the 2002 education law passed by Congress and signed by President Bush that absurdly insisted that all children will be proficient in mathematics and reading by 2014. Now President Obama, unilaterally, is telling states that they can forget all that as long as they adopt — or at least have ”plans” to adopt – reforms to his liking, such as national curriculum standards and teacher evaluations based on student standardized testing progress.

At this point, it is almost impossible to keep track of the federal savaging of the Constitution in supposed service of education. First there was the federal expenditure of money, allowed by none of the enumerated powers, largely starting in the 1960s. Then there was the growing attachment of controls to that money — again, with no Constitutional authority — culminating in NCLB. Now there is the blatant disregard for the separation of  powers by a President who just decided he didn’t like waiting for Congress to reauthorize the law, and a Congress that exhibits no spine whatsoever when it comes to this power grab because, well, no one seems to like NCLB.

Within this fiasco is all the evidence anyone should need to see why the Feds must be extracted from education. While Washington can drop humongous sacks of taxpayer dough on states and districts, and impose lots of bureaucratic rules and regulations, it can’t actually make education much better. Indeed, the whole point of NCLB was to end decades of Washington spending billions for no return. And what happened? Exactly what state, district, and school-level bureaucrats and unions expected: “accountability” swerved off the road before the 2014 deadline. It took longer than expected — it was a slightly more nerve-wracking game of political chicken than usual — but in the end the entrenched interests won because they’re the most motivated to bring the political pain. After all, their very livelihoods are at stake.

Aside from desegregation — which it has Constitutional authority to compel — the federal government has done no meaningful good in education. Why? Because the special interest-driven reality of politics ensures it can’t do any good. Yet we not only let it continue to trample the Constitution by meddling in education, we are allowing it to shred the Constitution into ever-smaller bits in order to “fix” the destruction it has wrought. And for this, all who turn a blind eye to the Constitution in the name of “the children” are to blame.

Waiving Goodbye to the Constitution is a post from Cato @ Liberty - Cato Institute Blog

Today POLITICO Arena asks:

Will the GOP win the birth-control fight?

My response:

The GOP will win the current contraceptive-abortifacient battle going away, because the average American understands the essence of religious freedom: government cannot force people to do things that violate their religious beliefs. The administration may try to frame this as a defense of women’s rights, but that’s pure sophistry. As I wrote yesterday, if the administration’s decision is reversed, women will still be perfectly free to use contraceptives, to seek abortions, and to do whatever else their beliefs permit. They just won’t be able to force others who object to such practices to pay for them.

There’s a bigger issue here, however. This is just the latest example of the perils of ObamaCare. When health care is thus “collectivized,” when we’re “all in this together,” we’re forced to fight for every “carve-out” of liberty. Those progressive Catholics who supported ObamaCare, who are now appalled by this move, should have thought of that before they worked to throw us all in the common pot. This incident is simply an early example of the many battles to come if ObamaCare survives the litigation and the elections ahead.

ObamaCare’s Coercive Essence is a post from Cato @ Liberty - Cato Institute Blog

FantasySCOTUS.net, a project of the Constitution-educating Harlan Institute (on whose non-profit board I sit), has been tracking its 12,000+ members’ predictions in the Obamacare case before the Supreme Court.  You can read more in-depth about the current state of the prediction market — with fancy graphs! – but here’s a summary:

• 90.6% predict that the lawsuit can proceed, overcoming the Anti-Injunction Act;
• 51.7% predict that the Court will strike down the individual mandate;
• 73.5% predict that the Court will then sever the mandate from the rest of the legislation (though this response isn’t very meaningful becuase the severability issue, unlike the others, isn’t a binary up-down choice for the justices);
• 77.2% predict that the Court will uphold the constitutionality of the Medicaid expansion.

The FantasySCOTUS managers caution that these predictions are still preliminary, particularly because most members don’t offer predictions until after oral arguments.  To learn more about FantasySCOTUS and its crowdsourcing techniques (“wisdom of the crowds”), see this recent article from the Northwestern Journal of Technology and Intellectual Property.

And if you want to get in on the predicting, you can sign up here.

The Wise Crowds Say Individual Mandate Is Unconstitutional is a post from Cato @ Liberty - Cato Institute Blog

The Daily Caller reports that Senator Harry Reid (D-NV) is planning another effort at Internet regulation—right on the heels of the SOPA/PIPA debacle. The article seems calculated to insinuate that a follow-on to SOPA/PIPA might slip into cybersecurity legislation the Senate plans to take up. Whether that’s in the works or not, I’ll detail here the privacy threats in cybersecurity language being circulated on the Hill.

A Senate draft currently making the rounds is called the “Cybersecurity Information Sharing Act of 2012.” It sets up “cybersecurity exchanges” at which government and corporate entities would share threat information and solutions.

Sharing of information does not require federal approval or planning, of course. Information sharing happens all the time according to market processes. But “information sharing” is the solution Congress has seized upon, so federal information sharing programs we will have. Think of all this as a “see something, say something” campaign for corporate computer security people. Or perhaps “e-fusion centers.”

Reading over the draft, I was struck by sweeping language purporting to create “affirmative authority to monitor and defend against cybersecurity threats.” To understand the strangeness of these words, we must start at the beginning:

We live in a free country where all that is not forbidden is allowed. There is no need in such a country for “affirmative” authority to act. So what does this section do as it in purports to permit private and governmental entities to monitor their information systems, operate active defenses, and such? It sweeps aside nearly all other laws controlling them.

“Consistent with the Constitution of the United States and notwithstanding and other provision of law,” it says (emphasis added), entities may act to preserve the security of their systems. This means that the only law controlling their actions would be the Constitution.

It’s nice that the Constitution would apply</sarcasm>, but the obligations in the Privacy Act of 1974 would not. The Electronic Communications Privacy Act would be void. Even the requirements of the E-Government Act of 2002, such as privacy impact assessments, would be swept aside.

The Constitution doesn’t constrain private actors, of course. This language would immunize them from liability under any and all regulation and under state or common law. Private actors would not be subject to suit for breaching contractual promises of confidentiality. They would not be liable for violating the privacy torts. Anything goes so long as one can make a claim to defending “information systems,” a term that refers to anything having to do with computers.

Elsewhere, the bill creates an equally sweeping immunity against law-breaking so long as the law-breaking provides information to a “cybersecurity exchange.” This is a breath-taking exemption from the civil and criminal laws that protect privacy, among other things.

(1) IN GENERAL.—No civil or criminal cause of action shall lie or be maintained in any Federal or State court against any non-Federal governmental or private entity, or any officer, employee, or agent of such an entity, and any such action shall be dismissed promptly, for the disclosure of a cybersecurity threat indicator to—
(A) a cybersecurity exchange under subsection (a)(1); or
(B) a private entity under subsection, (b)(1), provided the cybersecurity threat indicator is promptly shared with a cybersecurity exchange.

In addition to this immunity from suit, the bill creates an equally sweeping “good faith” defense:

Where a civil or criminal cause of action is not barred under paragraph (1), a good faith reliance by any person on a legislative authorization, a statutory authorization, or a good faith determination that this Act permitted the conduct complained of, is a complete defense against any civil or criminal action brought under this Act or any other law.

Good faith is a question of fact, and a corporate security official could argue successfully that she acted in good faith if a government official told her to turn over private data. This language allows the corporate sector to abandon its responsibility to follow the law in favor of following government edicts. We’ve seen attacks on the rule of law like this before.

A House Homeland Security subcommittee marked up a counterpart to this bill last week. It does not have similar language that I could find.

In 2009, I testified in the House Science Committee on cybersecurity, skeptical of the government’s ability to tackle cybersecurity but cognizant that the government must secure its own systems. “Cybersecurity exchanges” are a blind stab at addressing the many challenges in securing computers, networks, and data, and I think they are unnecessary at best. According to current plans, cybersecurity exchanges come at a devastating cost to our online privacy.

Congress seems poised once again to violate the rule from the SOPA/PIPA disaster: “First, do no harm to the Internet.”

The Senate’s SOPA Counterattack?: Cybersecurity the Undoing of Privacy is a post from Cato @ Liberty - Cato Institute Blog

Some libertarians boycott CPAC because it’s “too conservative,” others embrace it to try to steer the conservative movement in a more liberty-minded direction (on which, see Reason.tv’s excellent interview of Sen. Jim DeMint).  I have no principled feelings on the subject.  I’ve never attended – wasn’t really on my radar in college, couldn’t make it to DC during grad/law school, then was too busy lawyering, and now it would feel odd just to hang out rather than be part of the program — but I know lots of folks who enjoy it.

One thing I noticed about this year’s program — other than that my colleague Neal McCluskey is on an education policy panel at 10:30am on Friday — is that there’s a panel on the constitutionality of Obamacare (1:25 on Friday).  Curiously, there aren’t any lawyers on this panel.  C’mon, CPAC, I know this isn’t a Federalist Society convention, but it would seem useful to have people actually grappling with the legal issues educating your attendees about it.  Not all of us have problems communicating with non-JDs; do I have to issue another Obamacare debate challenge?

CPAC Panel on the Constitutionality of Obamacare Has No Lawyers is a post from Cato @ Liberty - Cato Institute Blog

In an essay for Armed Forces Journal, Army Lt. Col. Daniel L. Davis writes that after traveling across Afghanistan and speaking with more than 250 soldiers in the field,  “What I saw bore no resemblance to rosy official statements by U.S. military leaders about conditions on the ground.” Further down he continues, “I witnessed the absence of success on virtually every level.”

It’s hard to disagree.

Davis’s essay comes weeks after the top-secret 2011 National Intelligence Estimate on Afghanistan finds that security gains in the Afghan war are unsustainable, and that pervasive corruption, government incompetence, and militant safe havens in Pakistan have undercut progress.

I’m reminded of a comment made recently by Senator Dianne Feinstein (D-CA), who chairs the Senate Intelligence Committee:

There have been gains in security … but the Taliban is still a force to be reckoned with. They still occupy considerable land in the country.

“Occupy” is the operative word in that sentence. That gains in Afghanistan are “fragile and reversible” is the oft-repeated mantra of defiant optimists who invoke our inability to achieve key objectives—improve local governance, eradicate corruption, convince Pakistan to shut down safe havens, etc.—as reason to remain in Afghanistan indefinitely. Mind you, the opposite is also true: if such objectives are somehow reached, then we can never leave, since leaving would risk jeopardizing the gains we’ve won.

The intractable cross-border insurgency, of course, will outlive the presence of international troops. After all, a local district mullah who moonlights as a Taliban operative has nowhere else to go. Indeed, as the last 10 years have shown, insurgents can outlast coalition troops by merely re-emerging after we’ve left—that’s an endurable occupation.

In separate dissents appended to the report mentioned above—a report that reaches similar conclusions about the war made in the 2010 N.I.E.—the U.S. commander in Afghanistan, Marine Gen. John Allen, and the U.S. Ambassador to Afghanistan, Ryan Crocker, agreed in the judgment that the Taliban have shown no readiness to abandon their political goals. And, according to Col. Brian Mennes, who commands 3,300 troopers of the 4th Brigade: “The Taliban are going to have a role in post-war Afghanistan…They are Afghans. They are there—it’s just physics!’”

Coalition night raids and drones strikes have managed to eliminate the Taliban’s numerous shadow governors, mid-level commanders, and weapons facilitators; however, as the 2011 N.I.E. was quoted as saying, the Taliban’s “strength, motivation, funding and tactical proficiency remains intact.” And, “Many Afghans are already bracing themselves for an eventual return of the Taliban.”

From war fighters and trigger pullers to desk-bound spooks and armchair analysts, the conclusion reached is that after a decade of war we still haven’t won. The reason? All politics is local.

Remember that a key component of the Obama administration’s strategy for Afghanistan was winning over local people and luring them away from the Taliban. But the always perceptive Captain Cat, who has worked on Afghan peace building, offers insight into what went wrong:

As we talk and sip tea, the younger man’s brother arrives, wrapped in a patu. He keeps his hair long, jihadi style, and it pokes out of his pakool. He was a more senior commander than his younger brother, and only reconciled a few months ago.

I ask the commander what he does with his days. “The government doesn’t trust anyone who is reconciled, so no one will hire us. My other brother does small jobs, he owns a cart in town and he sometimes does delivery work. He gets calls from Miram Shah from the Taliban and they tell him “look at your life now, pushing carts. What kind of a man are you?”

“I really regret reintegrating with the government, I wish I hadn’t – but if I go back now, the Taliban will kill me”.

We shake hands and I leave them. Miserable, bored and ashamed, they will while away their days wondering how to feed their families, when the Taliban will come for them and why they put their trust in the government. It’s hard not to wonder the same thing.

Tragically, the vast majority of Afghans were initially happy with the foreign troop presence. They took a “wait-and-see” approach. But that spirit has largely deteriorated. Conversely, the Taliban are reviled but the general view among many Afghans toward the movement is either ambivalence or that the Afghan government is worse. Perhaps more importantly, as the Afghan government’s head of Rural Rehabilitation and Development insisted to me at his office in Kabul awhile back: “Taliban is part of our culture.”

The coalition’s deus ex machina is reconciliation with the Taliban. While such an outcome to the war is hardly a victory worth celebrating, it’s difficult to imagine a lasting solution that does not involve the war’s other occupying force, the Taliban.

Cross-posted from the Skeptics at the National Interest.

Occupy Afghanistan is a post from Cato @ Liberty - Cato Institute Blog

Politico‘s Jason Millman writes:

How much does Rick Santorum hate President Barack Obama’s health care law? So much that he even opposes the parts a lot of Republicans like.

The Republican presidential candidate, talking health care across the street from Minnesota’s Mayo Clinic Monday morning, blasted parts of the Affordable Care Act that poll well even among Republican voters — like guaranteeing coverage for people with pre-existing conditions and making health insurers cover preventive care.

Santorum, who has touted free market health principles like health savings accounts as an alternative to the Affordable Care Act, defended insurance industry practices the law eliminates, like setting premiums based on people’s health status.

Sigh. I refer my right honorable friend to the smack-down I gave such silliness some time ago:

Asking people whether they support the law’s pre-existing conditions provisions is like asking whether they want sick people to pay less for medical care.  Of course they will say yes.  If anything, it’s amazing that as many as 36 percent of the public are so economically literate as to know that these government price controls will actually harm people with pre-existing conditions.  Also amazing is that among people with pre-existing conditions, equal numbers believe these provisions will be useless or harmful as think they will help.

But as the collapse of the CLASS Act and private markets for child-only health insurance have shown, and as the Obama administration has argued in federal court, the pre-existing conditions provisions cannot exist without the wildly unpopular individual mandate because on their own, the pre-existing conditions provisions would cause the entire health insurance market to implode.

If the pre-existing conditions provisions are a (supposed) benefit of the law, then the individual mandate is the cost of those provisions. If voters don’t like the individual mandate–if they aren’t willing to pay the cost of the law’s purported benefits–then the “popular” provisions aren’t popular, either.

Or, as Firedoglake’s Jon Walker puts it, ObamaCare is about as popular as pepperoni and broken glass pizza.

Even among Republican voters? Good grief.

But, But…Price Controls Poll Well! is a post from Cato @ Liberty - Cato Institute Blog

First let me admit I do not have a crystal ball, nor does anyone I know, so given the limitations of economic forecasting, one can only attempt educated guesses as to the direction of any economic variable.  That said, I found the chart below, taken from the most recent Bureau of Labor Statistics’ Consumer Price Index release, to be interesting in terms of the clear trend.

The lower line is core CPI, the Federal Reserve’s preferred measure of inflation, the upper line is the full CPI, which includes food and energy prices.  The good news is that while still higher than I’d prefer, food and energy prices started to moderate in the fall of 2011.  That moderation in food/energy prices, however, did not translate into a lower core CPI.  In fact the core CPI continued its fairly steady increase.  Since September 2011, core CPI has been, on an annualized basis, above the Fed’s target of 2 percent (let’s set aside, for the moment, whether this is the right target or if it is even measured appropriately).  Remembering that monetary policy works with “long and variable lags” the time to worry about inflation is before it hits, not after.  Given the clear upward trend in the government’s own charts, I’d say we are already past the point where we should start worrying.

Which Way Is Inflation Headed? is a post from Cato @ Liberty - Cato Institute Blog

Around the time of President Obama’s State of the Union speech two weeks ago, Republicans and their allies came out arguing that the Democratic Senate hadn’t produced a budget in 1,000 days. Senate Budget Committee chairman Kent Conrad (D-ND) disputes the charge.

Is it true? The new budget season started Monday, so it’s a great time to examine that question.

Budget season really did start Monday. The Congressional Budget Act has a timetable in it (at section 300) that says the president submits his budget on or before the first Monday in February. We’re underway!

But I hope you weren’t holding your breath waiting to get a glimpse of the president’s budget. The White House has kicked back its release by a week—an unfortunate symbol of how both ends of Pennsylvania Avenue flout budget processes in ways large and small.

Now to the question: When was the last Senate budget?

Let’s start with a preliminary question: What is a “budget”?

The Congressional Budget Act defines it with reference to the document it appears in, known as a “concurrent budget resolution.” That definition is gobbledegook:

On or before April 15 of each year, the Congress shall complete action on a concurrent resolution of the budget for the fiscal year beginning on October 1 of such year. The concurrent resolution shall set forth appropriate levels for the fiscal year beginning on October 1 of such year and for at least each of the 4 ensuing fiscal years for the following—
(1) totals of new budget authority and outlays;
(2) total Federal revenues and the amount, if any, by which the aggregate level of Federal revenues should be increased or decreased by bills and resolutions to be reported by the appropriate committees;
(3) the surplus or deficit in the budget;
(4) new budget authority and outlays for each major functional category, based on allocations of the total levels set forth pursuant to paragraph (1);
(5) the public debt;
(6) for purposes of Senate enforcement under this title, outlays of the old-age, survivors, and disability insurance program established under title II of the Social Security Act for the fiscal year of the resolution
and for each of the 4 succeeding fiscal years; and
(7) for purposes of Senate enforcement under this title, revenues of the old-age, survivors, and disability insurance program established under title II of the Social Security Act (and the related provisions of the Internal Revenue Code of 1986) for the fiscal year of the resolution and for each of the 4 succeeding fiscal years.

Take a look at the last budget the Senate passed, though, and you can see these things—not that it’s a clear, readable description of what the future holds for government activity.

Now, Senator Conrad objects to the charge that he hasn’t produced a budget, saying that the Budget Control Act, which passed just last August, is a budget. It’s “more extensive,” setting the budget for the current year and the next one; it’s not just a resolution, but a law; and it has caps on discretionary spending going forward ten years.

Looking at the text of the bill, a government-budget novice like myself can’t see this. It doesn’t look like other congressional budgets, and it doesn’t fit with the definition in the Congressional Budget Act.

But why do we have to accept the government’s definition of what a budget is? It’s our government, and we get to decide when we’re seeing a budget.

I went to a handy resource, called a “dictionary,” to look up the word “budget.” The first two definitions are helpful:

1. an estimate, often itemized, of expected income and expense for a given period in the future.
2. a plan of operations based on such an estimate.

Now we have something we can use! And it can help us sort out what’s going on in federal ‘budgeting.’

The president’s budget, laying out not only gross spending numbers but the agencies and bureaus where the money will be spent, is a budget, under the more extensive, second definition.

What the House and Senate do, when they do their “budgeting,” is put out gross numbers and then some detail based on functional categories like amounts to be spent on “national defense” and “community and regional development” and stuff. That … almost meets the first definition, but it certainly isn’t itemized. Congress doesn’t actually do budgets.

My conclusion—as a human being and not a budget wonk—is that the Senate has not produced a budget in more than 1,000 days. I also conclude that the Congress doesn’t really produce budgets ever.

I investigate all this because of my work on transparency. If there is going to be a transparent federal budget and transparent spending processes, they have to have some relationship to what the public expects to see and some consistency among them (such as between the president’s budget and Congress’s).

If the political charge sticks—that the Senate has failed to budget—so be it. But the problem goes deeper. Congress basically doesn’t budget. It is owned by the complexity of the federal government and incapable of budgeting in a meaningful way. Congress just spends money in the appropriations process—which it flouts just as often as its so-called “budgeting.”

No Budget in 1,000 Days? No Budget Ever! is a post from Cato @ Liberty - Cato Institute Blog

The media tide of the past two days has carried in a great flood of stories on science, technology, engineering and math (STEM) education. ABC, NBC, AP, Reuters, the Christian Science Monitor, Politico, the Detroit News, and others joined in. This torrent of attention is due to a White House science fair at which the president announced several initiatives to boost student achievement in those fields. Details are scant, but based on the administration’s press release it seems that $100 million or so would go to encourage particular kinds of teacher’s college programs. Various extracurricular STEM programs funded by non-profit foundations were also touted in the release.

The obvious irony in the president’s plan to tweak teachers’ college programs is that those programs are themselves a key part of the problem. The nation’s state school monopolies typically require most or all of their teachers to either have a degree from a government-approved college of education or to be pursuing such a degree during evenings and weekends. Few of those studying or working in STEM fields are willing to sit through a teachers’ college program—with good reason. Not only are these programs often pointless according to their own graduates, they are not associated with improved student performance. They are a requirement without a function–at least without a function that benefits students. The one thing they do accomplish is to erect a barrier to entry that protects incumbent teachers from competition, allows the specter of “teacher shortages” to be floated at regular intervals, and thus to justify above market wages [state school teachers receive compensation that is roughly $17,000 per year higher than their private sector counterparts].

As a result, many of the most promising teaching candidates in these fields are weeded out from the start. President Obama’s plans to “improve” this barrier to entry into the profession amounts to reupholstering the deck chairs on the sunken Titanic.

But how to ensure that only effective teachers lead the nation’s classrooms given that the government certification process is not just useless but counterproductive? Here, again, there is irony. Somehow, in the thousands of different fields in which scientists and engineers work every day, the competent are distinguished from the incompetent. And somehow, those who underperform are either helped to improve or cut loose to seek work in a field (or with an employer) to which their talents are better suited. It is ludicrous to suggest that managers can effectively evaluate the work of the scientists and engineers they employ in every field _except_ education.

The media would do us all a favor if they would look past the Obama administration’s marshmallow launcher for a moment and contemplate the effect that our massive barrier to entry into the teaching profession has on recruiting scientists and engineers.

The Irony of the President’s STEM Initiatives is a post from Cato @ Liberty - Cato Institute Blog

The World Bank has come out with a wonderful short video explaining the benefits of trade liberalization among African countries:

Cato has addressed that topic in a 2005 paper:

[Accordingly,] in 1997 SSA countries levied an average applied tariff of 34 percent on agricultural exports from other SSA countries. Industrial countries, by contrast, imposed an average applied tariff of 24 percent on SSA agricultural exports. Similarly, SSA countries maintained an average applied tariff of 21 percent on nonagricultural exports from other SSA countries. Industrial countries imposed an average applied tariff of 4 percent on SSA non-agricultural exports.

According to the WTO, only 10 percent of African (including sub-Saharan African) exports were intraregional (i.e.: traded to other African countries). In contrast, 68 percent of exports from countries in Western Europe were exported to other Western European countries. Similarly, 40 percent of North American exports were to other countries in North America.

The World Bank Backs African Trade Liberalization is a post from Cato @ Liberty - Cato Institute Blog

In his much-discussed New Yorker article on the strategy memos that have shaped the Obama administration, Ryan Lizza writes:

Most of Obama’s conservative dinner companions from his evening at George Will’s home now describe him and his Administration in the most caricatured terms. Will declared Obama a “floundering naïf” and someone advancing “Lenin-Socialism.”

Really? Mild-mannered George Will compared President Obama to Lenin? That set off my skepticism meter. So I summoned the vast fact-checking resources of the Cato Institute and Googled the phrase. Which quickly turned up this video:

And as you can clearly hear at 1:30, Will isn’t saying “Lenin socialism.” He’s making the much milder and entirely valid charge of “lemon socialism,” which he described as “transferring wealth from the successful to the unsuccessful.” That’s an old term for the government takeover or bailout of failing firms. On the left it’s often described in terms such as “socialism for the rich, capitalism for the poor” or “privatizing profits and socializing losses.” People on the right deplore the practice of bailing out unsuccessful firms with taxpayers’ dollars.

That’s a point that Will also made in his column, first when the Bush administration started bailing out failing banks and auto companies. And it’s also been made by Charles Krauthammer on the auto bailout and again on the Solyndra deal. And by Cato adjunct scholar Lawrence H. White. And by lots of Cato-at-Liberty bloggers. Even Paul Krugman and Robert Reich.

Where was the skepticism of a New Yorker reporter when he thought he’d found the prudent, mild-mannered George Will comparing the president to Lenin? Where were the famous New Yorker fact-checkers? Some things, I guess, are just too good to check. So to answer the question in the title, Is Barack Obama a Leninist? No, just a lemonist.

Barack Obama, Leninist? is a post from Cato @ Liberty - Cato Institute Blog

What is due process?

Virtually everyone would agree that “due process” refers to a set of judicial procedures that create at least a strong tendency toward fair results.

But why do we have these procedures and not some others? Why do we have trial by jury, and not trial by fire? Why not just flip a coin? In this month’s Cato Unbound, our lead essayist, Timothy Sandefur, says that we have the procedures we do for one very simple reason: We recognize them as fair.

In other words, “due process” ultimately points back at a larger — and much thornier — legal and philosophical issue, that of fair treatment itself. If it didn’t, “due process” would just guarantee some empty (or possibly harmful) rituals.

So far, so good. Sandefur doesn’t stop there, however. He adds that the Fifth and Fourteenth Amendments’ guarantees of due process mean “not only that government must take certain procedural steps (hearings, trials, and so forth) when it imposes a deprivation, but also that some acts are off limits for government, “regardless of the fairness of the procedures used to implement them.”

In other words, due process is a check both on the procedure of the judiciary and on the substance of legislation. Some kinds of laws, Sandefur argues, cannot be implemented by any fair process — there’s no good reason for them, and there’s no lipstick enough for pigs like these. In such cases, the guarantee of due process is either a mockery of itself — or it’s enough to strike down the law. Sandefur picks the latter.

Is he right? Professor Lawrence Rosenthal of Chapman University disagrees, writing:

Deciding whether a law is supported by “good reason” is the essence of policymaking. Our Constitution guarantees a republican form of government, and in a republic, policy is made by those who are politically accountable for their decisions. Sandefur’s conception of due process of law, however, creates a judicial platonic guardianship that must approve every policy decision.

One side risks judicial overreach. The other side risks the tyranny of the majority. Which one is right? Stay tuned for the rest of this month’s Cato Unbound, which will also feature commentary by legal scholars Ryan Williams of the University of Pennsylvania and Gary Lawson of Boston University. Legal scholars will also want to review Sandefur’s paper in the Harvard Journal of Law and Public Policy (pdf), which develops the argument in fuller detail.

This Month’s Cato Unbound: What Is Due Process? is a post from Cato @ Liberty - Cato Institute Blog