The Washington Times says that the upcoming farm bill re-write could “sow division in the GOP.” While House Republican leaders John Boehner, Eric Cantor, and Kevin McCarthy voted against the 2008 farm bill, the new chairman of the House Agriculture Committee, Frank Lucas (R-Okla.), is a dedicated supporter of farm subsidies.

The Times recalls Boehner’s comments on the 2008 farm bill:

“The farm bill has often been abused by politicians as a slush fund for bizarre earmarks and wasteful spending projects, and the latest version … is no different,” Mr. Boehner, then the GOP minority leader, said at the time.

It’s too bad then that the Boehner-friendly Republican Steering Committee, which decided the committee chairs, didn’t appear to blink at handing the agriculture committee gavel to a key supporter of the “slush fund.” And it’s not as if Lucas has been circumspect in his intentions. Lucas’s agriculture issues section on his website, which hasn’t been updated since the Republicans took back the House, makes that perfectly clear:

As Ranking Member of the Agriculture Committee, I have long been a champion of voluntary agriculture conservation programs. During the drafting of the 2002 Farm Bill, I worked to secure the largest ever increase in programs such as Environmental Quality Incentives Program, the Conservation Reserve Program, and many others. In the 2008 Farm Bill, I advocated for renewable energy provisions to be included in the farm bill which would allow rural areas to play a larger role in making the U.S. less dependent on foreign sources of energy. I am proud that the 2008 Farm Bill devotes a funding stream to renewable energy research, development, and production….

[I] will work closely with Chairman Peterson and other members of the committee to ensure that cuts are not made to agriculture producers – farmers and ranchers.

Lucas isn’t shy about touting his support from the myriad farm lobby groups either:

I have been proud to receive recognition from various agriculture groups for my work in support of their concerns. The American Farm Bureau Federation has presented me with its “Friend of Farm Bureau” award for supporting Farm Bureau issues in Congress in 1996, 1998, 2000, 2002, 2004, 2006. In both 2002 and 2003, the National Farmers Union recognized me with the “Presidential Award for Leadership” for issues important to rural America. NFU also recognized me with the “Golden Triangle Award”, which is given to those who have demonstrated outstanding leadership on issues affecting family farmers, ranchers, and rural communities. In 2002 the Oklahoma Wheat Commission presented me with their “Staff of Life” award for voting in favor of wheat growers and farmers 100 percent of the time. And for two years running, the National Association of Wheat Growers named me one of only 11 “Wheat Champion” Members of Congress for superior action in Congress in support of the wheat industry.

Last year, Lucas criticized the Obama administration for proposing some minor agriculture program cuts, including a proposal to limit direct subsidy payments to farmers with more than $500,000 in annual sales.

Frank Lucas criticized the Obama administration for merely wanting to deny farmers with a half million dollars in sales from grabbing taxpayer money, but take a look what he has to say in a section on his website on “lower taxes and government spending:”

Spending in Congress has reached historic levels during the 111th Congress. The fiscally irresponsible behavior of former Speaker Pelosi and President Obama has driven our national debt level to the point that it is almost equal to the size of our entire economy. This is unacceptable and it must stop.

I have opposed – and will continue to oppose – spending initiatives that dramatically increase the size and scope of the federal government while adding to our already massive national debt. I have long been a supporter of tax reform and will continue to fight against increases in taxes and wasteful federal spending. Congress must get back to the business of fiscal responsibility and strive for a balanced budget without raising the taxes of hard-working Americans.

Lucas must know that “taxes of hard-working Americans” are pouring into the pockets of generally high-income farm businesses at the rate of $15 billion to $35 billion annually. While Lucas may be a “Wheat Champion” he sure isn’t a Taxpayer Champion, at least not on agricultural issues.

See this Cato essay for more on agriculture subsidies.

Rep. Frank Lucas (R-Farm Subsidies) is a post from Cato @ Liberty - Cato Institute Blog

We are told constantly that government can play a beneficial role in the marketplace by taking steps to make sure consumers are more fully informed about the risks of the goods and services they use. But what happens when the government itself helps spread health and safety information that is false or misleading? That question came up recently in the controversy over New York City’s misleading nutrition-scare ad campaign, and it now comes up again in a controversy over a new database of complaints about consumer products sponsored by the federal Consumer Product Safety Commission (CPSC).

As part of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Congress mandated that the CPSC create a “publicly available consumer product safety information database” compiling consumer complaints about the safety of products. Last week, by a 3-2 majority, the commission voted to adopt regulations that have dismayed many in the business community by ensuring that the database will needlessly include a wide range of secondhand, false, unfounded or tactical reports. The Washington Times editorializes:

…[Under the regulations as adopted last week] anybody who wants to trash a product, for whatever reason, can do so. The commission can leave a complaint on the database indefinitely without investigating its merits “even if a manufacturer has already provided evidence the claim is inaccurate,” as noted by Carter Wood of the National Association of Manufacturers’ “Shopfloor” blog….

Trial lawyers pushing class-action suits could gin up hundreds of anonymous complaints, then point the jurors to those complaints at the “official” CPSC website as [support for] their theories that a product in question caused vast harm. “The agency does not appear to be concerned about fairness and does not care that unfounded complaints could damage the reputation of a company,” said [Commissioner Nancy] Nord.

Commissioners Nord and Anne Northup introduced an alternative proposal (PDF) aimed at making the contents of the database more reliable and accurate but were outvoted by the Democratic commission majority led by Chairman Inez Tenenbaum. Nord: “under the majority’s approach, the database will not differentiate between complaints entered by lawyers, competitors, labor unions and advocacy groups who may have their own reasons to ‘salt’ the database, from those of actual consumers with firsthand experience with a product.” Commissioner Northup has published posts criticizing the regulations for their definitions of who can submit a report, who counts as a consumer, and who counts as a public safety entity.

For those interested in reading further, Rick Woldenberg, a leading private critic of the law who blogs at AmendTheCPSIA.com, has critically commented on the politics of the proposal here, here, here, here, and here. More coverage: ShopFloor with followups here and here, New York Times, Sean Wajert/Mass Tort Defense. I’ve been blogging for the past two years at my website Overlawyered about the wider problems with the CPSIA law, including its effects on books published before 1985, thrift stores, natural wooden toys, ballpoint pens, bicycles, plush animals, Irish dance costumes, rocks used in science class and many more. Most of these problems remain unresolved thanks to the inflexible wording of the law as well as, sometimes, the unsympathetic attitude of the commission majority. I’ve heard that bringing overdue investigative oversight to the ongoing CPSIA disaster is shaping up as a priority for many incoming lawmakers on the (newly Republican-led) House Energy and Commerce Committee, whose outgoing chair, California Democrat Henry Waxman, is closely identified with the law and its consumer-group backers.

The CPSC’s Defective New Complaints Database is a post from Cato @ Liberty - Cato Institute Blog

Washington Times reporter Shaun Waterman has a characteristically excellent article out today about U.S. cybersecurity authorities failing to secure their own systems.

According to a new report by government auditors, systems at the U.S. Computer Emergency Readiness Team (US-CERT), part of the Department of Homeland Security, were not maintained with updates and security patches in a timely fashion and as a result were riddled with vulnerabilities that hackers could exploit.

Time and again, people look to government intervention based on what they imagine government might do under ideal conditions. Real conditions produce far weaker results.

We’re better off distributing the problem of data, network, and computer security among all the self-interested actors in the country—fallible as they are. We should not abandon the problem to a central authority whose failure fails us all.

And You Look to Government for Cybersecurity? is a post from Cato @ Liberty - Cato Institute Blog

FBI crime figures reported in today’s Wall Street Journal challenge the perception that illegal immigrants have unleashed a crime wave in Arizona.

One of the clinching arguments for Arizona’s tough new law aimed at illegal immigration has been the perception in that state that crime has been rising, and that undocumented workers are largely to blame. Yet the Journal reports that the incidence of violent crime in Phoenix last year plunged 16.6 percent compared to 2008, a rate of decline that was three times the national average.

According to the Phoenix Police Department, the downward trend in crime has continued into 2010 even as the “illegal immigrant crime wave” story reverberates on cable TV and talk radio. As the Journal story reports:

In Phoenix, police spokesman Trent Crump said, “Despite all the hype, in every single reportable crime category, we’re significantly down.” Mr. Crump said Phoenix’s most recent data for 2010 indicated still lower crime. For the first quarter of 2010, violent crime was down 17% overall in the city, while homicides were down 38% and robberies 27%, compared with the same period in 2009.

Arizona’s major cities all registered declines. A perceived rise in crime is one reason often cited by proponents of a new law intended to crack down on illegal immigration. The number of kidnappings reported in Phoenix, which hit 368 in 2008, was also down, though police officials didn’t have exact figures.

The new crime figures confirm what I wrote in a column in today’s Washington Times under the headline, “Unfounded fear of immigrant crime grips Arizona,” and what I explored in a longer think piece, “Higher Immigration, Lower Crime,” in Commentary magazine a few months ago.

The president and Congress need to fix our immigration system, but we need to do it in the right way and for the right reasons.

New Crime Stats Contradict Anti-Immigrant Hype is a post from Cato @ Liberty - Cato Institute Blog

The head of the federal Office of Personnel Management, John Berry, has become unhinged by a few recent critiques of federal worker pay. Berry is an Obama appointee who apparently views his role as being a one-sided lobbyist for worker interests, rather than a public servant balancing the interests of taxpayers and federal agencies.

Here is an 11-minute audio interview with Berry on Federal News Radio on Friday, where he lashes out at USA Today, Washington Times, and the Cato Institute. Berry is defensive, emotional, and unwilling to accept that new data might indicate a possible problem with the underpaid federal worker thesis that is constantly pushed by the unions.

What do I mean when I say he is unhinged? An investigation by the USA Today found that in 83 percent of 216 occupations examined, federal workers earned more than comparable private-sector workers. Here is Berry’s response when asked whether he thinks the USA Today analysis is a good one: “It is absolutely not! It comes straight out of the Cato Institute!” But, believe it or not, the nation’s largest newspaper is not part of some libertarian plot.

The most troubling aspect of Berry’s performance is his deliberate effort to wrap himself in the flag and deny that anyone should even ask questions about federal workers during a time of national security concerns. It is strange that an Obama administration official would so vigorously use the Bush administration tactic of “waving the bloody shirt.”

Here are excerpts from the interview starting at 1:48 minutes and then 5:54 minutes (my transcription):

Interviewer: “There was a line in this [Washington Times] editorial, one of the first lines, it was the first line of the second paragraph, and that is: ‘Consider how much money a bureaucrat can make for successfully sitting at his desk for a year.’

Berry: …You know, this is the kind of, it’s just a denigration of public service and, and it is, there should be no place for it in our country… And to be denigrated and say that they’re bureaucrats sitting at a desk pushing paper there should be no place in American society for such hyperbole.

Interviewer: I wonder if this is something that comes because of the economy. Where is this upswell of anger coming from?

Berry: …And that’s why I just get steamed when I read something like this because it denigrates that incredible motivation, and like I said to denigrate those who even put their lives on the line day in and day out so that the rest of us and our children can be safe, there should be no place for it. And I think my hope is that a lot of people, not just me, will rise up and respond to this with the anger and the facts that it deserves. Because as long as people can get away with denigrating that level of service, then we are putting at risk the future of our country.”

Have you got Berry’s message? We simply cannot allow people to use their free speech rights to question the operations of government because that will undermine national security. So people need to “rise up” and get “angry,” grab their pitchforks, and head to the homes of anyone who dares question high government worker pay because it puts “at risk the future of our country.”

Good grief!

More from me on federal worker pay here.

(Thanks to Solomon Stein and Justin Logan)

John Berry: Angry about Federal Pay is a post from Cato @ Liberty - Cato Institute Blog

Yesterday, Cato released a new study, “The Massachusetts Health Plan: Much Pain, Little Gain,” which showed that official estimates overstate the gains in health insurance coverage resulting from a 2006 Massachusetts law by at least 45 percent.  The study also finds: supporters understate the law’s cost by nearly 60 percent; government programs are crowding out private insurance; self-reported health improved for some but fell for others; and young adults are responding to the law by avoiding Massachusetts.

Given that the Massachusetts health plan bears a “remarkable resemblance” to the Obama plan, the study should serve as a warning sign to members of Congress, says Michael Cannon, director of health policy studies.

The study has received coverage in Investor’s Business Daily, The Wall Street Journal, The Washington Post, Detroit News, The Washington Times, the Reason Foundation and the Pioneer Institute.

Trouble in Massachusetts is a post from Cato @ Liberty - Cato Institute Blog

Stephen Dinan reports in the Washington Times that the Social Security Administration—an integral part of the E-Verify government background check system—regularly fails to use E-Verify properly.

Despite helping run the government’s electronic database designed to weed out illegal-immigrant workers, Social Security failed to run E-Verify checks on its own employees nearly 20 percent of the time.

That’s according to this report, which also found that SSA failed to verify employees during the correct time-frame a whopping 49% of the time.

E-Verify is not supposed to be used for pre-screening, but SSA ran a background check before hiring new employees 25% of the time. Fifty-one percent were screened timely. The remaining 24% were screened after the seven-day window during which new hires are supposed to be screened.

If the federal agency at the heart of this background check system can’t operate it well, this casts doubt on the idea of mandating every private employer across the country to use it.

I discussed some of the problems with programs like E-Verify in my paper, “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration.”

SSA Fails to Verify With E-Verify is a post from Cato @ Liberty - Cato Institute Blog

The good news is that a bill has been introduced in the House this week under the broad heading of immigration reform. Even during a recession, Congress should be working to change our immigration system to reflect the longer-term needs of our economy for foreign-born workers.

The bad news is that the actual bill put in the hopper by Rep. Luis Gutierrez, D-IL, on Tuesday would do nothing to solve the related problems of illegal immigration and the long-term needs of our economy.

As I argued in a recent blog post and a Washington Times op-ed, immigration reform must include expanded opportunities for legal immigration in the future through a temporary worker visa.

Any so-called reform that is missing this third leg will be doomed to fail. We will simply be repeating the mistakes of the 1986 Immigration Reform and Control Act, which granted amnesty to 2.7 million illegal workers and ramped up enforcement, but made no provision for future workers. Rep. Jeff Flake, R-AZ, agrees.

Disappointing Start for Immigration Reform is a post from Cato @ Liberty - Cato Institute Blog

In today’s Washington Times, Ken Klukowski and Ken Blackwell co-authored an op-ed about McDonald v. Chicago and the Privileges or Immunities Clause titled, “A gun case or Pandora’s box?”

If that title sounds familiar, it should. Josh Blackman and I have co-authored a forthcoming article called “Opening Pandora’s Box? Privileges or Immunities, The Constitution in 2020, and Properly Incorporating the Second Amendment.“  As Josh put it in his reply to the Kens, “imitation is the most sincere form of flattery.”

Going beyond the title, there are several errors in the piece,  which I will briefly recap:

First, the Kens argue that the Supreme Court should uphold the Slaughter-House Cases, out of a fear that reversal — and thereby a reinvigoration of Privileges or Immunities — would empower judges to strike down state and local laws. What they neglect to mention is that it has been the role of the judiciary since Marbury v. Madison to strike down laws that violate the Constitution. There is near-universal agreement across the political spectrum that Slaughter-House was wrongly decided, causing the Supreme Court to abdicate its constitutional duty by ignoring the Privileges or Immunities Clause for 125 years. The Kens want to continue this mistaken jurisprudence.

Next, the Kens describe the Privileges or Immunities Clause as a general license for courts to strike down any law they do not like. This is not accurate. Neither the Privileges or Immunities Clause nor any other part of the Fourteenth Amendment empowers judges to impose their policy views. Instead, “privileges or immunities” was a term of art in 1868 (the year the Fourteenth Amendment was ratified) referring to a specific set of common law, pre-existing rights, including the right to keep and bear arms. The Privileges or Immunities Clause is thus no more a blank check for judges to impose their will than the Due Process Clause — the exact vehicle the Kens would use to “incorporate” the Second Amendment.

To set the record straight, Josh and I are working on an op-ed — not so much to respond to the Kens’ flawed analysis but to present the correct historical and textual view of the Privileges or Immunities Clause. To see our arguments in greater detail, read our article and Cato’s McDonald brief, both of which I’ve previously blogged about here , here, and here.

Keeping Pandora’s Box Sealed is a post from Cato @ Liberty - Cato Institute Blog

On its front page today, the Washington Times reports that expanded powers for the Federal Reserve are being opposed by “odd allies.”  The Fed’s imperial over-reach for additional regulatory powers is being opposed by Democrats and Republicans, and liberals and conservatives alike.  As well it should be.  As Senator Shelby observed, “Anointing the Fed as the systemic-risk regulator will make what has proven to be a bad bank regulator even worse.”

The regulation of financial services failed conspicuously to prevent the worst financial crisis since the Great Depression.  The Fed failed most conspicuously as it was charged with oversight of all the major banks, including notably Citigroup and Bank of America. Bank regulation now functions to insulate banks from the consequences of their own bad acts.  The regulatory system enables banks to engage in excessive risk taking.

The Obama Administration and Chairman Barney Frank of the House Financial Services Committee propose that an expanded role for the Fed and generally more of the same will improve matters. Instead, the proposed legislation will worsen the situation by codifying the status of the major financial institutions as “too-big-to-fail.”  It would thereby provide them with special legal status.  We have all seen this movie and how it ends.  Fannie Mae and Freddie Mac had such a status and collapsed.  Do we need 20 more such disasters?

Three cheers for all those opposing this destructive piece of legislation. End “too-big-to-fail” instead.

Fed Opposed by Left and Right is a post from Cato @ Liberty - Cato Institute Blog

For a fair and authoritative (and did I mention favorable?) assessment of my new Cato book, Mad about Trade: Why Main Street America Should Embrace Globalization, you can read William H. Peterson’s review in today’s Washington Times.

Dr. Peterson is an adjunct scholar with the Heritage Foundation and the Ludwig von Mises Institute who holds a Ph.D. in economics from New York City University. In his review he writes:

Daniel Griswold’s tour de force explores, reasons and documents how import competition benefits the American consumer, seeing him move ahead toward greater peace incentives, lower real prices, more choices, better quality. Mr. Griswold also tracks how the big-box retailers such as Wal-Mart, Home Depot and Best Buy deliver the world’s goods mostly by sea via millions of big, truckload-size containers. …

So Mr. Griswold would have the United States adopt or maintain trade policies best for most Americans, especially the poor and middle class, no matter what other nations do. Says the author: Let’s drop the remaining barriers separating us from ongoing growth and peace policies enhancing the global marketplace. Bully for him.

Information at the beginning of the review should have given the cover price of the book as $21.95. It is available with a nice discount at Amazon.com along with a peek inside at the table of contents and selected pages.

Trade Delivers Peace and Bargain Prices is a post from Cato @ Liberty - Cato Institute Blog

Page one of today’s Washington Times—above the fold—has a fascinating story indicting the White House for failing to disclose that it will collect and retain material posted by visitors to its pages on social networking sites like Facebook and YouTube. The story is fascinating because so much attention is being paid to it. (It was first reported, as an aside at least, by Major Garrett on Fox News a month ago.)

The question here is not over the niceties of the Presidential Records Act, which may or may not require collection and storage of the data. It’s over people’s expectations when they use the Internet.

Marc Rotenberg, president of the Electronic Privacy Information Center, said the White House signaled that it would insist on open dealings with Internet users and, in fact, should feel obliged to disclose that it is collecting such information.

Of course, the White House is free to disclose or announce anything it wants. It might be nice to disclose this particular data practice. But is it really a breach of privacy—and, through failure to notify, transparency—if there isn’t a distinct disclosure about this particular data collection?

Let’s talk about what people expect when they use the Internet and social networking sites. Though the Internet is a gigantic copying machine, some may not know that data is collected online. They may imagine that, in the absence of notice, the data they post will not be warehoused and redistributed, even though that’s exactly what the Internet does.

There can be special problems when it is the government collecting the information. The White House’s “flag@whitehouse.gov” tip line was concerning because it asked Americans to submit information about others. There is a history of presidents amassing “enemies” lists. But this is not the complaint with White House tracking of data posted on its social networking sites.

People typically post things online because they want publicity for those things—often they want publicity for the fact that they are the ones posting, too. When they write letters, they give publicity to the information in the letter and the fact of having sent it. When they hold up signs, they seek publicity for the information on the signs, and their own role in publicizing it.

How strange that taking note of the things people publicize is taken as a violation of their privacy. And failing to notify them of the fact they will be observed and recorded is a failure of transparency.

America, for most of what you do, you do not get “notice” of the consequences. Instead, in the real world and online, you grown-ups are “on notice” that information you put online can be copied, stored, retransmitted, and reused in countless ways. Aside from uses that harm you, you have little recourse against that after you have made the decision to release information about yourself.

The White House is not in the wrong here. If there’s a lesson, it’s that people are responsible for their own privacy and need to be aware of how information moves in the online environment.

A Bizarre Privacy Indictment is a post from Cato @ Liberty - Cato Institute Blog

Harry Patch died a little over a week ago.  At 111 he was the last British veteran of World War I.  No French or German participants in that horrid war survive.  Only one American participant still lives–Frances Buckles, age 108, who drove an ambulance during the war.

World War I is largely ignored in America, but it seared Europe in particular, as well as other participants, such as Australia and New Zealand, onetime British colonies which sent off soldiers to die for their parent nation.  Although less bloody than World War II, the first conflict set the stage for the second, far more murderous contest, as well as the Cold War that followed.

World War I, once called the war to end war, was foolish and stupid for all participants.  Nothing was at stake that warranted a death toll which approached 20 million.  On top were even more injured and maimed, economic collapse, and political chaos, leading to the rise of fascism, Nazism, and communism.

Harry Patch understood that he had been deployed in a mistaken crusade.  Reports the Washington Times:

Mr. Patch did not speak about his war experiences until he was 100. Once he did, he was adamant that the slaughter he witnessed had not been justified.

“I met someone from the German side, and we both shared the same opinion: We fought, we finished and we were friends,” he said in 2007.

“It wasn’t worth it.”

War sometimes is necessary.  But as Robert E. Lee intoned while looking down on the impressive military tableau at the battle of Fredericksburg, “It is well that war is so terrible, lest we grow too fond of it.”

Harry Patch certainly understood.  According to the Times:

His most vivid memory of the war was of encountering a comrade whose torso had been ripped open by shrapnel. “Shoot me,” Mr. Patch recalled the soldier pleading.

The man died before Patch could draw his revolver.

“I was with him for the last 60 seconds of his life. He gasped one word – ‘Mother.’ That one word has run through my brain for 88 years. I will never forget it.”

The End of the World War I Generation is a post from Cato @ Liberty - Cato Institute Blog

Will Obama Raise Middle-Class Taxes to Fund Health Care?

President Obama is promoting an expansion in federal health care spending, and Democratic leaders are scrambling to find ways to pay for it. The plan is expected to cost about $1.5 trillion over the next decade, but the administration has promised that health care legislation won’t add to already huge federal budget deficits. In a new paper, Cato scholars Michael D. Tanner and Chris Edwards argue that expanding government health care will likely involve huge tax increases on the middle class.

Tanner warns of “Obamacare” to come, saying that Obama’s new health care plan will give “government control over one-sixth of the U.S. economy, and over some of the most important, personal, and private decisions in Americans’ lives.” Don’t miss Tanner’s in-depth analysis of the new health care plan that is making its way through Congress, which “would dramatically transform the American health care system in a way that would harm taxpayers, health care providers, and — most importantly — the quality and range of care given to patients.”

A part of the plan would include “public option” (read: government-run) health care, which would allow the government to compete against private health care providers. Tanner says it would be the first step toward wiping out the private insurance market as we know it:

Regardless of how it is structured or administered, such a plan would have an inherent advantage in the marketplace because it would ultimately be subsidized by taxpayers. It could, for instance, keep its premiums artificially low or offer extra benefits, then turn to the U.S. Treasury to cover any shortfalls. Consumers would naturally be attracted to the lower-cost, higher-benefit government program.

…It is unlikely that any significant private insurance market could continue to exist under such circumstances. America would be firmly on the road to a single-payer health care system with all the dangers that presents. That would be a disaster for American taxpayers, physicians, and—most importantly—patients.

Treasury Seeks to Control Executive Pay Across the Private Sector

Fox Business reports, “The Treasury Department on Wednesday took new steps to rein in executive compensation, saying the Obama Administration would introduce legislation that could create stricter limits on pay; it also appointed an official to head up efforts on the issue.”

In a 2008 Policy Analysis Ira T. Kay and Steven Van Putten explain the misconceptions many people have about executive pay, and why the market is a better arbiter than any bureaucrat in Washington:

Such populist sentiments are often based on misunderstandings about the role of corporate executives in the economy and the vigorous competition that exists for these highly skilled leaders. In the past, federal regulatory efforts based on such misunderstandings have generated unintended consequences, which have damaged the economy and hurt the ability of the market for executives to self-regulate over time.

The labor market for executives and the associated pay levels are already subject to high levels of regulation. Indeed, U.S. corporations are subject to more stringent executive pay disclosure requirements than corporations anywhere else in the world. Before additional regulatory and legislative efforts are unleashed, policymakers should examine the rationale for current pay structures and the strong links between executive pay and corporate performance.

In a Washington Times op-ed, Alan Reynolds says efforts to cap executive pay are wholly misguided:

Congressional hearings to barbecue Wall Street executives are as fun as a circus, but with more clowns. Presidential politics is now taking such political distractions to a lower level.

…Most top executives who were actually in charge during the craze of overinvestment in mortgage-backed securities have been fired. Executives who are fired are not in a position to be “giving themselves” anything.

In reality, top executives are mainly paid by accumulating a big stockpile of company stock and stock options. Estimates of annual CEO pay that Congress and the press have been focusing on look as high as they do only because of the high value of restricted stock or stock options at the time.

Writing in 2007 (before the first round of major bailouts), Cato scholars Jerry Taylor and Jagadeesh Gokhale took it a step further: “Pay Bosses More!”:

Excessive executive compensation harms no one but perhaps the stockholders who put up with it. And stockholders put up with it because there’s good reason to believe that sizable CEO compensation packages help — not harm — corporate performance, which redounds to their benefit, and that of the firms’ workers.

Companies pay workers what they must to deliver their products and services to the market, and supply and demand establishes executive compensation packages the same way it establishes consumer prices. Any overcompensation comes out of the firm’s bottom line — at a loss to the shareholders, not the workers.

North Korea Sentences Two U.S. Journalists to 12 Years Hard Labor

Two American journalists were convicted of entering North Korea illegally while on assignment, and exhibiting “hostility toward the Korean people.” This week, a North Korean court sentenced them to 12 years in a labor prison.

Cato scholar Doug Bandow comments:

Washington should publicly downplay the controversy and present the issue to the Kim regime as a humanitarian matter. The Obama administration should indicate its willingness to open a broader dialogue with North Korea, but indicate that positive results will be possible only if Pyongyang responds with cooperation instead of confrontation. Releasing the two journalists obviously would provide evidence of the former.

Regrettably, Laura Ling and Euna Lee are political pawns. As such, Washington’s best strategy to achieve their release is to simultaneously reduce their perceived value to Pyongyang and ease tensions between the U.S. and North Korea. Patience may be the Obama administration’s highest virtue and Ling’s and Lee’s greatest hope.

In a Cato Daily Podcast, Bandow discusses what can be done for the American prisoners, and how the U.S. government should react.

Week in Review: Health Care Battles, Pay Caps and North Korean Prisoners is a post from Cato @ Liberty - Cato Institute Blog

For a weekly roundup of news and commentary from the Cato Institute, subscribe now to the Cato Weekly Dispatch.

• Marian Tupy examines the failure of government-to-government aid to Africa in The Financial Times.

• In The Wall Street Journal, John Hasnas asks whether “compassion and empathy” are really characteristics we want in a judge.

• In the South China Morning Post, Ted Galen Carpenter examines why North Korea ignores international calls for nuclear disarmament.

• Richard W. Rahn reports on the extreme changes about to occur in the British government in The Washington Times.

• In Monday’s Cato Daily Podcast, Mark Calabria weighs in on “shadow banking” and the effort to regulate it.

New at Cato is a post from Cato @ Liberty - Cato Institute Blog

Terrific editorial over at the Washington Times.

Excerpt:

The bad behavior of these police officers exposes a double standard. As one Nationals fan, who is a lawyer, told us: “There’s no way those cops could pass a street sobriety test right now. Just imagine how we’d get treated if they pulled us over having consumed half of what they’ve drunk tonight – and they’re packing heat.”

We don’t begrudge police officers having a little fun, but they need to abide by the same laws they enforce on the rest of us. When they go out for a few beers, they might want to leave their uniforms and guns at home.

The idea of a National Peace Officers Memorial Week is a fine idea but it is regrettable that the memorial and event is in Washington, D.C.   Just reinforces the wrongheaded notion that the federal government must be involved in everything.

Cops Gone Wild is a post from Cato @ Liberty - Cato Institute Blog