Breaking: Economics 101 Still in Effect
Dairy farmers are working lobbying hard to ensure they get their hands on more of your money. Apparently, changes made last year to the Milk Income Loss Contract — mainly to take account of rising feed costs — were not enough to stem the losses.
The Senate recently voted to give the USDA an extra $350 million for dairy farmers’ support. The House left dairy support out of its appropriations bill, so the two chambers are working on the compromise now (prediction: the taxpayer will get screwed).
Here’s an ironic quote from a Brownfield news post yesterday (linked to above). It’s Missouri Dairy Association Chairman Larry Purdom on how to bring prices back up:
“Our feeling is that if [USDA] would buy some cheese and product that’s in storage…hanging over our heads, depressing prices,” Purdom tells Brownfield from his farm at Purdy, Missouri, “we feel like the prices would start moving on their own if we didn’t have this surplus.”
More on U.S. dairy policy here.
Filed under: Tax and Budget Policy; Trade and Immigration
Australian Trade Scholars Offer Perfect Cure for ‘Protectionitis’
Earlier this month, the Lowy Institute in Australia published a paper offering some very sound and, obviously, very timely advice about how to contain, and ultimately, eradicate protectionism. The paper is being circulated among the G20 delegations, who will undoubtedly discuss the topic of trade and protectionism in Pittsburgh next week. So for those of you interested in getting a sense of what will probably be the single best idea on (or at least near) the table at the G20 summit, I highly recommend this 20-pager.
The solution proposed by the authors boils down to a two-word phrase: “Domestic Transparency.” What is meant by that phrase is that “defeating protectionism begins at home.” And by that slogan, the authors mean that the key to reducing, and ultimately eliminating, protectionism is not external pressure from other countries, mercantilist trade negotiations, or filing trade complaints at the WTO, but rather greater awareness at home of the real costs of protectionism. I couldn’t agree more. (In fact better transparency is one of our recommendations in this paper).
When governments impose trade barriers at the behest of special interests, they usually justify that protectionism with diversionary rhetoric concerning some vague conception of the “national interest,” and the imperative of shielding domestic business from unfair competition and other vagaries of the globalized economy. That the protectionist measure itself—the product of special interests diverting productive resources from economic to political ends—forces involuntary and usually unknowing subsidization of those protection-seekers by the same citizens at large who are expected to buy into the national interest canard is a detail about which most people remain in the dark.
Filed under: International Economics and Development; Trade and Immigration
Government Pays $4 Million for a Bike Rack
The $4 million Union Station Bike Transit Center is scheduled to open in Washington, DC on October 2nd. According to an August Washington Post story, 80 percent of the cost of this opulent bike center is being borne by federal taxpayers via the U.S. Department of Transportation.
Look, I harbor no animosity against bike riders, but under what authority — legal or moral — does the federal government tax me in order to build bike centers for parochial, special interests? The Constitution?
But let’s pretend — and I mean pretend – that such federal expenditures are legitimate. The Post article say the center will have 150 indoor bike racks and 20 outdoors. A recent NPR article says it will hold 130 bikes. Whatever the figure, at a cost of $4 million, it comes out to around $25-$30 thousand per bike. And, yes, I recognize that the “1,700-square-foot building west of the station will also have changing rooms, personal lockers, a bike repair shop and a retail store that will sell drinks and bike accessories.” But the ultimate purpose is to hold bikes. In my mind, the extra extravagance merely reflects the fact that taxpayers are picking up the tab.
There’s the old saying that a picture is worth a thousand words. In this case, it’s more like 4 million:
There you go, America. Your taxes are funding this multi-million dollar bike rack in Washington, DC — the beneficiaries of which will probably be the same Capitol Hill lobbyists and congressional staffers who spend all day pilfering your paychecks.
Obama’s Health Care Speech in Plain English
Hell of a speech last night, eh? Here are a few of my favorite gems.
Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition.
Translation: I, Barack Obama, ignoring thousands of years of failed price-control schemes, will impose price controls on health insurance. I will force insurers to sell a $50k policies for $10k. What could go wrong?
We were losing an average of 700,000 jobs per month.
True. And your employer mandate would kill hundreds of thousands of low-wage jobs that would never come back.
They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses…. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care.
Translation: Boy! Are we going to force you to buy a lot of coverage!
I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.
…except for the bureaucrats I proposed to put between you and your doctor.
Some… supported a budget that would have essentially turned Medicare into a privatized voucher program. That will never happen on my watch. I will protect Medicare.
Translation: I will never let seniors control their own health care dollars. I will never give up Washington’s control over your health care decisions. Mmmmuuuuhahahahahaha!
…there are too many Americans counting on us to succeed.
Translation: There are too many lobbyists counting on me to succeed: drug-industry lobbyists, health-insurance lobbyists, physician-cartel lobbyists, large-employer lobbyists, hospital lobbyists….
It’s a plan that asks everyone to take responsibility for meeting this challenge – not just government and insurance companies, but employers and individuals.
Translation: I’m going to tax the hell out of you, but I don’t want you to notice how much I’m going to tax you. So I’m going to tax employers and insurance companies, and they’re going to pass the taxes on to you. Most of the taxes won’t even show up in the government’s budget. It’s all very clever. No, seriously – just ask my economic advisor Larry Summers.
It’s a plan that incorporates ideas from Senators and Congressmen; from Democrats and Republicans – and yes, from some of my opponents in both the primary and general election.
Translation: I may have savaged your ideas in the past, called them irresponsible…risky…dangerous…whatever. But that wasn’t about principle; I just wanted to become president. Now that I’m president, I need a win. So you’ll help me, won’t you? Hey, where’s Hillary?
Taxpayer-Funded Lobbying
There’s lots of outrage in the blogosphere over revelations that some of the biggest recipients of the federal government’s $700 billion TARP bailout have been spending money on lobbyists. Good point. It’s bad enough to have our tax money taken and given to banks whose mistakes should have caused them to fail. It’s adding insult to injury when they use our money — or some “other” money; money is fungible — to lobby our representatives in Congress, perhaps for even more money.
Get taxpayers’ money, hire lobbyists, get more taxpayers’ money. Nice work if you can get it.
But the outrage about the banks’ lobbying is a bit late. As far back as 1985, Cato published a book, Destroying Democracy: How Government Funds Partisan Politics, that exposed how billions of taxpayers’ dollars were used to subsidize organizations with a political agenda, mostly groups that lobbied and organized for bigger government and more spending. The book led off with this quotation from Thomas Jefferson’s Virginia Statute of Religious Liberty: “To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical.”
The book noted that the National Council of Senior Citizens had received more than $150 million in taxpayers’ money in four years. A more recent report estimated that AARP had received over a billion dollars in taxpayer funding. Both groups, of course, lobby incessantly for more spending on Social Security and Medicare. The Heritage Foundation reported in 1995, “Each year, the American taxpayers provide more than $39 billion in grants to organizations which may use the money to advance their political agendas.”
In 1999 Peter Samuel and Randal O’Toole found that EPA was a major funder of groups lobbying for “smart growth.” So these groups were pushing a policy agenda on the federal government, but the government itself was paying the groups to lobby it.
Taxpayers shouldn’t be forced to pay for the very lobbying that seeks to suck more dollars out of the taxpayers. But then, taxpayers shouldn’t be forced to subsidize banks, car companies, senior citizen groups, environmentalist lobbies, labor unions, or other private organizations in the first place.
FDA to Regulate Tobacco? Big Mistake
Handing tobacco regulation over to the FDA, as Congress is poised to do, is an epic public health mistake. It is tantamount to giving the keys of the regulatory store to the nation’s largest cigarette manufacturer, Philip Morris.
The legislation that will be voted on shortly in the Senate was cooked up out of public sight by Philip Morris, Sen. Ted Kennedy, Rep. Henry Waxman, and anti-tobacco lobbyists. Philip Morris staffers themselves even wrote large portions of the bill.
There are significant, and numerous, problems with the FDA regulating tobacco, and virtually no benefits to public health. Kennedy, Waxman, and the public health establishment present their legislation as a masterful regulatory stroke that will end tobacco marketing, prevent kids from starting to smoke, make cigarettes less enjoyable to smoke, and reduce adult smoking. But FDA regulation of tobacco will do none of these things.
The bill fails to correctly identify the reasons why young people begin to smoke, and concentrates almost exclusively on restricting tobacco marketing, while leaving the other risk factors for adolescent smoking unaddressed. There is nothing in the proposed legislation that shows the FDA understands the well-documented connections between education, poverty and smoking status, connections that provide the key to helping adults stop smoking.
Why Can’t the Destroyers Just Get Along?
A friend comments on my “How Does It Feel to Be at the Table Now?” post thus:
I think there is a pyschological element at work here a la Atlas Shrugged — many of the Washington lobbyists who were here in 93-94 feel repentant of having killed health reform back then and don’t want another 15 years of being considered “bad people” in Washington cocktail party circles. So they genuinely want to be “part of the solution” this time. The hard part is selling that to the folks who pay their salaries!
How Does It Feel to Be at the Table Now?
On Monday, the Obama administration held a well-publicized love-fest with lobbyists for the health care industry. It turns out that rather than a “game-changer,” the event was a fraud. And the industry got burned.
At the time, President Obama called it a “a watershed event in the long and elusive quest for health care reform“:
Over the next 10 years — from 2010 to 2019 — [these industry lobbyists] are pledging to cut the rate of growth of national health care spending by 1.5 percentage points each year — an amount that’s equal to over $2 trillion.
By an amazing coincidence, $2 trillion is just enough to pay for Obama’s proposed government takeover of the health care sector.
Yet The New York Times reports that isn’t the magnitude of spending reductions the lobbyists thought they were supporting:
Hospitals and insurance companies said Thursday that President Obama had substantially overstated their promise earlier this week to reduce the growth of health spending… [C]onfusion swirled in Washington as the companies’ trade associations raced to tamp down angst among members around the country.
Health care leaders who attended the meeting…say they agreed to slow health spending in a more gradual way and did not pledge specific year-by-year cuts…
My initial reaction to Monday’s fairly transparent media stunt was: “I smell a rat. Lobbyists never advocate less revenue for their members. Ever.” The lobbyists are proving me right, albeit slowly. (Take your time, guys. I don’t mind.)
Filed under: Cato Publications; Government and Politics; Health, Welfare & Entitlements
Toles on Obama/Health-Care-Lobbyist Media Stunt
Today’s Washington Post has a terrific editorial cartoon about this week’s announcement by President Obama and health care industry lobbyists that they’re all willing to reduce health care spending growth by 1.5 percentage points.
Why Health Care Reform Is Not a Sure Thing
Over at NPR.org, I’ve got a commentary that explains why comprehensive health care reform is far from certain — current events notwithstanding. Read it, recommend it, comment on it.
From the NPR piece:
There are two things standing in the way of Democrats’ plans for universal health insurance coverage: math and politics.
First, the math. According to the Urban Institute, covering the uninsured would cost a minimum $120 billion per year. Over 10 years, that comes to about $1.6 trillion.
That money’s gotta come from somewhere. And that’s where politics comes in. Everybody wants that money to come from someone else.
UPDATE: Here’s my appearance on Fox News today, discussing lobbyists’ proposal to cut health care costs:
Also, is health care a right?
The Stimulus Feeding Frenzy
Billions and billions of dollars! Get yours today!
I’ve written before about the massive lobbying game in Washington to get your own special interests written into the stimulus and budget bills. And about the efforts to pressure governments into spending that money NOW.
Today a friend sent me a new piece of the incredible expanding stimulus economy. A publishing company has created a new newsletter on how to keep up with “ever-changing opportunities and the complex requirements to apply for them” — The Money for Main Street Monitor. Yes, for only $229 a year, with this special offer, you can keep up with the lucrative and ever-changing “new stimulus funding opportunities.”
I’m omitting the specifics so as not to give this parasitical industry any more publicity, but here’s the text of the email advertisement:
Dear Nonprofit Professional,
Billions of dollars from the Obama stimulus plan are becoming available daily for funding thousands of new state, local and nonprofit programs!
And while it’s extremely time consuming and difficult to keep up with the ever-changing opportunities and the complex requirements to apply for them, we can help make that task easier than you’d imagine.
That’s why [the company] is proud to introduce our newest and much-needed online service: The Money for Main Street Monitor.
Just click on or cut and paste the following link into your Web browser to take advantage of a special one-week offer on this continuously updated service:
…
Continuous Stimulus Funding Updates
While we have diligently kept our readers up to date on the billions of dollars in funding coming from the Obama stimulus package, many tell us they need much more coverage!
Consequently, we have assigned a team of experienced Washington, DC-based editors to focus exclusively on new stimulus funding opportunities for health care, family services, education, mental health, disabilities and substance abuse programs, housing and community development!<
Through continuously updated articles, subscribers to this new online service will be kept up to date on the latest funding opportunities as soon as they emerge. And with our online format, subscribers will have access to our user-friendly search tools to instantly find the funding opportunities most suited for their organizations!
Plus, our updates — unlike those on government Web sites — are in plain English and easy to find. And, we’ve included a wealth of grant-writing tips designed to help your organization get its share of stimulus funding!
We know how important it is for every organization to watch their dollars closely these days, and we’re doing are best to help. That’s why we are offering you a specially reduced rate for this much-needed publication, The Money for Main Street Monitor.
Just click on or cut and paste the following link into your Web browser to find out more about this special one-week offer:
…
Or you can call in your order toll free at 1-800-[GET OTHER PEOPLE'S MONEY].
This isn’t the only company making such offers. Lobbyists, consultants, newsletter publishers, and others will be making money this year guiding their clients to the pot of gold at the end of the stimulus. But in economic terms, all this effort is deadweight loss. Instead of devoting time and talent and resources to the production of real economic value, these people are being lured into the parasite economy, jockeying for money extracted from productive workers and businesses and redistributed by a Washington bureaucracy and the lobbyists that revolve around it.
Obama’s Recycled Moderate-Speed Rail Plan
The Obama administration believes in recycling, as shown by the so-called high-speed rail plan it announced last week. Below is a map of the plan, and below that is a map of the Federal Railroad Administration’s 2005 high-speed rail plan. As you can see, the proposed routes are identical. (The grey lines on the first map represent conventional Amtrak routes.)
Stimulus Lobbying Watch
Tim Carney has more details on some companies that hired lobbyists specifically to get a piece of the kitchen-sink spending bill:
For example, the National Association of Home Builders hired Baker & Hostetler a week after Barack Obama’s inauguration to lobby explicitly on the stimulus bill, which, in the end, included an $8,000 credit for home purchases.
Better Place Inc. is an electric car company that hired its first lobbyist — Steve McBee, a former staffer for House appropriator Norm Dicks, D-Wash. — to push for electric car incentives in the stimulus. The resulting cornucopia included an expanded tax credit for plug-in cars, $2 billion in funding for electric car batteries and $400 million to build an electric car infrastructure, complete with recharging stations.
Media giant Time Warner added to its lobbying army, hiring the firm Parven Pomper Strategies to lobby for broadband subsidies in the bill. These subsidies included $2.5 billion to underwrite loans to get broadband out to rural areas and an additional $4.7 billion in spending on other broadband projects. Similarly, network giant Cisco Systems lobbied for the broadband subsidies in H.R. 1.
Carney calls it “The Lobbyist Enrichment Act.” I wrote about “Obama’s K Street Recovery Plan” a couple of days ago.
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