What’s Wrong with Imported Oil?
In a speech today at Georgetown University, President Obama called for a goal of cutting America’s oil imports by one-third within a decade. Like all efforts to wean Americans from big, bad imports, such a policy will mean we will all pay more than we need to for the energy that helps to power our economy.
I’ll leave it to my able Cato colleagues to dissect the president’s proposal in terms of energy policy, but in terms of trade policy, this is about as bad as it gets.
We Americans benefit tremendously from our relatively free trade in petroleum products. Like all forms of trade, the importation of oil produced abroad allows us to acquire it at a price far lower than we would pay if we had to rely more heavily on domestic oil supplies.
The money we save buying oil more cheaply on global markets allows our whole economy to operate more efficiently. Oil is the ultimate upstream input that virtually all U.S. producers use to make their final products, either in the product itself or for shipping. If U.S. manufacturers and other sectors are forced to pay sharply higher prices for petroleum products because of import restrictions, their final goods will cost more and will be less competitive in global markets. If households are forced to pay more for gasoline and heating oil, consumer will have less to spend on domestic goods and services.
The president talked in the speech about the goal of not being “dependent” on foreign suppliers, but most of our oil imports come from countries that are either friendly or at least not in any way an adversary. According to the U.S. Department of Commerce, one third of our oil imports in 2010 came from our two closest neighbors and NAFTA partners, Canada and Mexico. Another third came from the problematic providers in the Arab Middle East and Venezuela (none from Iran, less than one-third of 1 percent from Libya.) The rest came from places such as Nigeria, Angola, Colombia, Brazil, Russia, Ecuador and Great Britain.
Even if, by the force of government, we could reduce our imports by a third, there is no reason to expect that the reduction would be concentrated in the problematic providers. In fact, oil is generally cheaper to extract in the Middle East, so a blanket reduction would probably tilt our imports away from our friends and toward our real and potential adversaries.
In one speech, the president has managed to state a policy goal that is bad trade policy, bad security policy, and bad foreign policy.
Obama’s Little Evidence Problem
Last month I wrote a post on President Obama’s selective citation of evidence when debating which education programs to kill and which to keep. Well yesterday the administration struck again, issuing the following statement opposing a bill that would revive DC’s bleeding-out voucher program:
STATEMENT OF ADMINISTRATION POLICY
H.R. 471 – Scholarships for Opportunity and Results Act
(Rep. Boehner, R-Ohio, and 50 cosponsors)
While the Administration appreciates that H.R. 471 would provide Federal support for improving public schools in the District of Columbia (D.C.), including expanding and improving high-quality D.C. public charter schools, the Administration opposes the creation or expansion of private school voucher programs that are authorized by this bill. The Federal Government should focus its attention and available resources on improving the quality of public schools for all students. Private school vouchers are not an effective way to improve student achievement. The Administration strongly opposes expanding the D.C. Opportunity Scholarship Program and opening it to new students. Rigorous evaluation over several years demonstrates that the D.C. program has not yielded improved student achievement by its scholarship recipients compared to other students in D.C. While the President’s FY 2012 Budget requests funding to improve D.C. public schools and expand high-quality public charter schools, the Administration opposes targeting resources to help a small number of individuals attend private schools rather than creating access to great public schools for every child.
So, as I wrote last month, while the Prez. has no problem calling for heaps of dollars for such proven failures as the 21st Century Community Learning Centers — $1.27 billion, to be exact — he won’t support $20 million for something that rigorous research actually works, quoting Andrew Coulson’s recent congressional testimony:
that students attending private schools thanks to this program have equal or better academic performance than their peers in the local public schools, and have significantly higher graduation rates. This, and very high levels of parental satisfaction, com[ing] at an average per pupil cost of around $7,000. By contrast, per pupil spending on k-12 public education in the nation’s capital was roughly $28,000 during the 2008-09 school year.
And such positive results, again in contrast to the President’s statement, are not an aberration for school choice. The highest-calibre research on choice has almost always found clear benefits stemming from it, and has never found negative outcomes.
Obviously I can’t read the President’s mind — he might oppose the voucher program but otherwise love big education spending for philosophical reasons, or he might just be appeasing teachers’ unions — but one thing I do know is that a fair examination of the evidence simply cannot support killing DC vouchers while spending lavishly everywhere else.
The Legitimacy of the Libyan War
President Obama’s speech last evening offers a chance to assess the implications of the war in Libya.
President Obama is not the first president to order attacks on another nation without the authorization of Congress. This case, however, seems different. Prior to the intervention, the President’s national security advisors had determined that the nation had no vital interest at stake in the Libyan civil war. Secretary of Defense Robert Gates has repeated that conclusion after the intervention began. For his part, President Obama emphasized in last night’s speech and before, that the war would preclude a “humanitarian catastrophe.” Why did that rationale win out over the realism of his advisors?
President Obama tends to see our nation and the world as divided between oppressors (victimizers) and the oppressed (victims). In this view, politics should help the oppressed and do justice (i.e. harm) to the oppressor. In Libya, this outlook provides a clear division between a oppressor (Qaddafi and his loyalists) and his victims (the rebels). Morality thus demands war against the oppressor on behalf of his victims.
But there is a problem with America acting alone. Many people in the Middle East and elsewhere see the United States not as a vindicator of the oppressed but rather as a oppressor. Truth be told, more than few Americans share that view.
Those who share this view believe that the United States cannot act unilaterally to help the victims in Libya. This would be true even if Congress authorizes the war as required under Article I of the United States Constitution. The authorization to go to war must come from someone else other than an American political official or institution.
Hence, President Obama sought international authorization for the war in Libya. True, he sought that authority for pragmatic reasons. A coalition meant shared burdens and (Obama believes) a quick way out of Libya. But the authorizations by the U.N. Security Council and earlier by the Arab League also could be seen as giving legitimacy to the enterprise. Those authorizations meant the United States could go to Libya as a true protector of the oppressed.
If you doubt any of this, examine closely what the President has said about the war. In his speech, the rebels become victims at the mercy of an oppressor. Congress gets a fleeting mention related to consultation about, rather than authorization of, war. True legitimacy for the war comes from a “U.N. mandate and international support.” In his letter to Congress announcing the war, the first sentence reads “at my direction, U.S. military forces commenced operations to assist an international effort authorized by the United Nations (U.N.) Security Council and undertaken with the support of European allies and Arab partners, to prevent a humanitarian catastrophe…” Here again the legitimacy for the war comes the United Nations, the European allies, and the Arab League. Congress has neither power to deny the president nor legitimacy to bestow on his work.
There is much to say about these reasons for war. Some people might see in Libya a civil war between two armed gangs. Lacking the frame of oppressor and victims, they will be less willing than the President to assume that the people in the territory called Libya wear either black or white hats. We may learn to our cost that our new allies are victims now and oppressors later. If we take the President seriously, we will be obligated to make war against them, too.
We have now taken on a default obligation to help every victim and to punish every oppressor throughout the world. We have two constraints on fulfilling that obligation. The first, mentioned by the president, is costs. Eventually the financial markets may limit our efforts on behalf of victims. Second, and more important legally, a president must seek authorization for war from the United Nations, the European union, the Arab League or….well, anyone except the United States Congress.
It is not just that this president, like others before him, ignored Article I of the Constitution. Nor is this president the first to shun moral complexity in favor of a Manichean outlook. President Obama is the first, however, to assert that his broad powers to initiate war should be limited primarily by people who are outside the American social compact. On this account, sotto voce, the Constitution is not just ignored. It is irrelevant.
Tuesday Links
- Shifting America’s focus away from individual liberty is waging war on the future, not winning it.
- U.N. “authorization” is the Emperor’s new fig leaf for war with Libya.
- Why are we fighting Mexico’s drug war?
- David Boaz remembers Geraldine Ferraro, who helped advance the war against gender discrimination in politics.
- Chris Preble eulogizes the Weinberger/Powell doctrine against the backdrop of the Libyan war:
Tuesday Links
- America’s involvement in the war in Libya can’t be justified on either security or humanitarian grounds.
- Obamacare can’t be fixed, and now is the time to dismantle it.
- The no-fly zone over Libya can’t mean good things for American politics or policy.
- Bureaucrats can’t allocate goods more efficiently than market actors.
- President Obama can’t blame former President Bush for Guantanamo Bay anymore:
Monday Links
- “The New Health Care Law: What a Difference a Year Makes,” featuring a keynote address from constitutional attorney and counsel in Florida v. HHS David Rivkin, and panels including economist and former CBO director Douglas Holtz-Eakin, Cato director of health policy Michael F. Cannon and vice president for legal affairs Roger Pilon, and many more, begins at 1pm Eastern today. Please join us as we stream the event at our new live events hub, or watch on Facebook. If you prefer television, the forum will be broadcast live on C-SPAN 2.
- “The next time gun-control advocates point to violence in Mexico and call for more restrictions on gun sales or a revived assault-weapons ban, they should consider that the problem may not be with the laws on the books, but with those who enforce them.”
- The Bush administration far underestimated the divide between Sunni, Shiite, and Kurdish Iraqis before 2003–the Obama administration may be making the same type of mistake in Libya.
- The U.S. military currently far exceeds its legitimate function of national defense:
Obama’s Trip to Latin America
As Ted Carpenter notes below, President Obama is departing on an important trip to Latin America. The countries that he will visit exemplify the macroeconomic stability and advancement of democratic institutions now found in much of the region.
Brazil, by far the largest Latin American economy, has enjoyed almost a decade of sound growth and poverty reduction. Chile is the most developed country in the region thanks to decades of economic liberalization, a process that has also made it Latin America’s most mature democracy. And El Salvador is undergoing a delicate period in its transition to becoming a full-fledged democracy with its first left-of-center president since the end of the civil war in 1992.
In an era when most Latin American nations are moving in the right direction—albeit at different speeds, with some setbacks, and with notable exceptions—the United States can serve as a catalyst of change by contributing to more economic integration and the consolidation of the rule of law in the region.
Unfortunately, despite President Obama’s assurances that he’s interested in strengthening economic ties with Latin America, his administration is still delaying the ratification of two important free trade agreements with Colombia and Panama. President Obama also continues to support a failed war on drugs that significantly exacerbates violence and institutional frailty in the region, particularly in Mexico and Central America.
It’s good that President Obama’s trip will highlight significant progress in Latin America, but his administration’s policy actions still don’t match the U.S. goals of encouraging economic growth and sound institutional development in the region.
Thursday Links
- “If financial institutions are indeed better than consumers at managing interest risk, then those companies should be able to offer consumers attractive terms for doing so — without the moral hazard of an enormous taxpayer backstop.”
- We should be thankful that the president is spending time on his golf game.
- After all, he recently reinstated military tribunals at Guantanamo Bay and has continued the use of extra-constitutional prisons in the U.S. after the Bush era.
- “It’s odd that debate here centers on a no-fly zone, a form of military intervention that shows support for rebels without much helping them.”
- Does Haley Barbour really want to cut defense spending? Or is he just really politically astute?
ADA Service Animals: The Silence of the Goats
As I note in a New York Post opinion piece published on Sunday, today marks an unusual milestone: the executive branch of the U.S. government is actually rolling back a significant burden imposed on business owners and others under the Americans with Disabilities Act (ADA). Because the subject matter is an unusually colorful one — the widespread misclassification of household pets, including such exotic species as iguanas, goats, and boa constrictors, as “service animals” under the ADA — you’d think there’d be major press coverage. And yet with scattered exceptions here and there, public attention has been muted. And there’s a story in that too.
In the early years of the law (as I observe in the Post piece) the ADA’s mandate that businesses admit service animals caused little stir because dogs trained to help persons with blindness, deafness and some other disabilities are skillfully trained to stay on task while ignoring such distractions as food, strangers and the presence of other animals. But given the law’s lack of definitions, combined with lopsided penalties should a defendant guess wrong — $10,000 is possible for a first violation — shop owners began seeing more and more rambunctious spaniels and irritable purse dogs, to say nothing of rabbits, rats, ferrets, lizards and critters of many other sorts. Doctors obligingly wrote notes testifying that the animals were helpful for mood support or to fend off depression; you can buy “therapy dog” vests online with no questions asked.
The new rules toughen things up. With a minor exception for miniature horses, service animals will now have to be dogs; they’ll have to be trained to perform a service; and while that service can relate to an “invisible” disability, including one of a psychiatric nature, it cannot be based simply on mood support or similar goals. Also, they’ll need to be on-leash unless their service requires otherwise.
In revising the rule, the Obama administration was heeding the wishes not of frazzled retailers but of disabled-rights advocates themselves. As press coverage recounts, persons who employ well-trained service animals suffer not only from public backlash but also from more tangible setbacks such as disturbances that can arise when other, less well-trained animals challenge their dog in an indoor setting. If the new change counts as deregulation, it’s a sort of accidental and tactical deregulation not arising from any notion that it’s better to leave private owners free to set their own rules.
And that helps explain the absence of fanfare, not to say stealth, with which the Obama administration is letting the new rule go into effect. Knowing that the change will be unpopular with some of its own constituents, it seems happy to forgo credit with constituencies that might favor deregulation — notwithstanding the public fuss a few weeks ago about the President’s newfound interest in reducing regulatory burdens. That interest remains, to say the least, untested.
Obama’s Military Tribunals
This week Obama announced that he intends to prosecute prisoners before military tribunals. The administration is taking pains to point out that Obama is not embracing the Bush policy. These will be Obama’s tribunals, not Bush’s. But since Mr. Obama’s executive order can be revised or withdrawn at any time, the new and improved procedures do not amount to much. The tribunals were wrongheaded under Bush and the critique applies equally well to Obama’s “new” policy.
As others have noted, Obama has now embraced tribunals, Gitmo, and the Patriot Act. Bad news, but at least Obama kept his promises to end the wars and get us on a sound financial footing.
For additional Cato work related to military tribunals, go here and here.
Spending Growth: Nondefense Discretionary
Last week I compared “other mandatory” spending in fiscal 2007 to the president’s proposal for fiscal 2012. Several readers requested that I produce a chart showing a similar breakdown for nondefense discretionary spending (or “domestic discretionary”).
The following chart breaks down nondefense discretionary outlays according to Budget Enforcement Act categories. These categories generally consist of programs from multiple departments and agencies. For example, “Science, Space, & Technology” includes programs at the National Science Foundation, Department of Energy, and NASA.
Note: The president’s fiscal 2012 budget proposes that surface transportation outlays, which make up the majority of spending in the transportation category, be budgeted as mandatory rather than discretionary.
Nondefense discretionary spending accounts for approximately 17 percent of total federal spending. It is this relatively small, but nonetheless important, portion of overall federal spending that Republicans and Democrats are currently arguing over. Democrats are balking at a Republican proposal to trim $61 billion in nondefense discretionary funding. A new Cato video puts the GOP’s proposed cuts in perspective.
High Schools to the President: What Thrill?
A couple of years ago, I was highly critical of President Obama’s first, it turns out annual, televised school-year kickoff address to America’s students. At the time I got a lot of emails telling me how outrageous my stance was, and how anyone, of any political persuasion, should be thrilled to have the President of the United States talk to their kids.
Apparently, the thrill is gone when you actually have to do a little work to get the President. According to internal White House memos, the President’s “Race to the Top High School Commencement Challenge” – in which schools compete for a chance to get the Prez as their graduation speaker — had generated only 68 applications as of February 28, which was after the original application deadline of Feburary 25. (The White House has extended the deadline to March 11.) To put that in perspective, the nation had over 24,000 public secondary schools as of the 2007-08 school year, meaning only about 0.3 percent of public high schools have expressed any serious desire to have the President send their charges off to adulthood. (Well, or college.)
So have our high schools suddenly discovered the Constitution, which gives the President no authority to meddle in education? Probably not, but it certainly does undermine the argument that it is a super-terrific thing anytime the Commander in Chief can take to the podium to tell kids to work hard and stay in school. Apparently, it’s only super-terrific if you don’t have to lift a finger — well, other than to work your TV remote — to get the President to talk to your kids.
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