Presidents, Precedents, and Perpetual War

Good news: after nearly three months of airstrikes in Iraq and Syria, the branding’s finally caught up to the bombing. Our latest war in the Middle East finally has a name: “Operation Inherent Resolve” is what we’re calling it, the Pentagon recently announced. DoD planners had initially rejected that name as uninspiring and “just kind of bleh,” but after several weeks of fruitless searching, they’ve decided it’s the best we can do.

Get Excited! (Photo Credit: Dept. of Defense)Here’s Defense.gov’s banner graphic for “Operation Inherent Resolve”: simple, spare, sort of Sisyphean. 

Actually, with its air of uninspired resignation, “Inherent Resolve” suits well enough, even if something like “Operation Eternal Recurrence” might have fit better. But it surely says something that, as with hurricanes, we’re running out of cool names for the wars presidents launch.

Now that we know what to call it, what should we make of Obama’s latest military intervention and how it fits into the president’s emerging legacy on constitutional war powers? Jack Goldsmith and Matthew Waxman have an important piece on that subject in the New Republic, arguing that “it is Obama, not Bush, who has proven the master of unilateral war.” “The war powers precedents Obama has established,” they explain, “will constitute a remarkable legacy of expanded presidential power to use military force.”

It’s a remarkable legacy, all right, though I might put somewhat less emphasis on “precedent” as such. Taken individually, as Goldsmith and Waxman acknowledge, very few of Obama’s actions are wholly unprecedented. But taken as a whole, the president’s approach to war powers begins to look like something new under the sun. As I argued recently at The Federalist, Obama will “go down in history as a ‘transformational’ president, having completed America’s transformation into a country where continual warfare is the post-constitutional norm.”

The World Misery Index: 109 Countries

Every country aims to lower inflation, unemployment, and lending rates, while increasing gross domestic product (GDP) per capita. Through a simple sum of the former three rates, minus year-on-year per capita GDP growth, I constructed a misery index that comprehensively ranks 109 countries based on “misery.” Below the jump are the index scores are for 2013. Countries not included in the table did not report satisfactory data for 2013.

The Costs of Ebola: Guinea and Sierra Leone

For a clear snapshot of a country’s economic performance, a look at my misery index is particularly edifying. The misery index is simply the sum of the inflation rate, unemployment rate and bank lending rate, minus per capita GDP growth. 

The epicenter of the Ebola crisis is Liberia. My October 15, 2014 blog reported on the level of misery in and prospects for Liberia.

This blog contains the 2012 misery indexes for Guinea and Sierra Leone, two other countries in the grip of Ebola. Yes, 2012; that was the last year in which all the data required to calculate a misery indexes were available. This inability to collect and report basic economic data in a timely manner is bad news. It simply reflects the governments’ lack of capacity to produce. If governments can’t produce economic data, we can only imagine their capacity to produce public health services.

With Ebola wreaking havoc on Guinea and Sierra Leone, the level of misery is, unfortunately, very elevated and set to soar.

U.S.-Mexico Sugar Agreement: A Tribute to Managed Markets

The U.S. Department of Commerce (DOC) announced Oct. 27 that it had reached draft agreements with Mexican sugar exporters and the Mexican government to suspend antidumping and countervailing duty (AD/CVD) investigations on imports of sugar from that country.  Commerce has requested comments from interested parties by Nov. 10, with Nov. 26 indicated as the earliest date on which the final agreements could be signed.  Given the obvious level of consultation by governments and industries on both sides of the border leading up to this announcement, it’s reasonable to presume that the agreements will enter into effect within a few weeks.

Suspension agreements that set aside the AD/CVD process in favor of a managed-trade arrangement are relatively rare.  They sometimes are negotiated when the U.S. market requires some quantity of imports, and when the implementation of high AD/CVD duties would be expected to curtail trade severely.  This would have been the case, assuming the duties actually had entered into effect.  However, as this recent blog post indicates, it’s not at all clear that the U.S. International Trade Commission (ITC) would have determined that imports from Mexico were injuring the U.S. industry.  A negative vote (a vote finding no injury) by the ITC would have ended these cases and left the U.S. market open to imports of Mexican sugar. 

What are the key provisions of the agreements?  There are restrictions on both the price and quantity of imports from Mexico.  Sugar will only be allowed to be imported into the United States if it is priced above certain levels:  20.75 cents per pound (at the plant in Mexico) for raw sugar, and 23.75 cents per pound for refined sugar.  (For comparison, U.S. and world prices for raw sugar currently are about 26 cents and 16 cents, respectively; for refined sugar about 37 cents and 19 cents.)  Additional price controls on individual Mexican exporters based on their alleged prior dumping (selling at a price the DOC determines to be less than fair value) will further raise the prices at which they will be allowed to sell.

Are Well-Meaning but Misguided Conservatives Being Seduced by the Value-Added Tax?

Having a vision of a free society doesn’t mean libertarians are incapable of common-sense political calculations.

For example, the long-run goal is to dramatically shrink the size and scope of the federal government, both because that’s how the Founding Fathers wanted our system to operate and because our economy will grow much faster if labor and capital are allocated by economic forces rather than political calculations. But in the short run, I’m advocating for incremental progress in the form of modest spending restraint.

Why? Because that’s the best that we can hope for at the moment.

Another example of common-sense libertarianism is my approach to tax reform. One of the reasons I prefer the flat tax over the national sales tax is that I don’t trust that politicians will get rid of the income tax if they decide to adopt the Fair Tax. And if the politicians suddenly have two big sources of tax revenue, you better believe they’ll want to increase the burden of government spending.

Which is what happened (and is still happening) in Europe when value-added taxes were adopted.

And that’s a good segue to today’s topic, which deals with a common-sense analysis of the value-added tax.

Here’s the issue: I’m getting increasingly antsy because some very sound people are expressing support for the VAT.

I don’t object to their theoretical analysis. They say they don’t want the VAT in order to finance bigger government. Instead, they argue the VAT should be used only to replace the corporate income tax, which is a far more destructive way of generating revenue.

And if that was the final–and permanent–outcome of the legislative process, I would accept that deal in a heartbeat. But notice I added the requirement about a “permanent” outcome. That’s because I have two requirements for such a deal:

1. The corporate income tax could never be reinstated.

2. The VAT could never be increased.

And this shows why theoretical analysis can be dangerous without real-world considerations. Simply stated, there is no way to guarantee those two requirements without amending the Constitution, and that obviously isn’t part of the discussion.

Attorneys General Aim at New Targets, Who Respond as Expected

The New York Times launches a series of investigative reports on corporate lobbying of state attorneys general. But you have to read fairly far down in the story to find the “nut graf” on why this is happening now. Radley Balko summed it up in a tweet: “As prosecutors get increasingly powerful, lobbyists will increasingly spend money to try to influence them.” And the article does note that: 

A robust industry of lobbyists and lawyers has blossomed as attorneys general have joined to conduct multistate investigations and pushed into areas as diverse as securities fraud and Internet crimes….

The increased focus on state attorneys general by corporate interests has a simple explanation: to guard against legal exposure, potentially in the billions of dollars, for corporations that become targets of the state investigations.

It can be traced back two decades, when more than 40 state attorneys general joined to challenge the tobacco industry, an inquiry that resulted in a historic $206 billion settlement.

Microsoft became the target of a similar multistate attack, accused of engaging in an anticompetitive scheme by bundling its Internet Explorer with the Windows operating system. Then came the pharmaceutical industry, accused of improperly marketing drugs, and, more recently, the financial services industry, in a case that resulted in a $25 billion settlementin 2012 with the nation’s five largest mortgage servicing companies.

The trend accelerated as attorneys general — particularly Democrats — began hiring outside law firms to conduct investigations and sue corporations on a contingency basis.

I wrote about this 30 years ago in the Wall Street Journal, citing Hayek’s assessment from 40 years before that:

Nobel laureate F.A. Hayek explained the process 40 years ago in his prophetic book The Road to Serfdom: “As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of this directing power.”

As the size and power of government increase, we can expect more of society’s resources to be directed toward influencing government.

Those who work to increase the size, scope, and power of government need to recognize: This is the business you have chosen. If you want the federal government to tax (and borrow) and transfer – and reallocate through prosecution – $3.8 trillion a year, if you want it to supply Americans with housing and health care and school lunches and retirement security and local bike paths, then you have to accept that such programs come with incentive problems, politicization, corruption, and waste. And that special interests will find ways to influence such momentous decisions, no matter what lobbying restrictions and campaign finance regulations are passed.

Armor’s Reply to Barnett: Research on Early Childhood Ed Still Unpersuasive

W. Steven Barnett’s attempt to rebut my review of preschool research begins with an ad hominem attack on my (and Cato’s) motives for publishing this piece, calling it an “October Surprise” with an aim “to raise a cloud of uncertainty regarding preschool’s benefits that is difficult to dispel in the time before the election.” He omits that my first review of preschool research was published in January, the same month Cato sponsored a public forum on the topic with both pro and con speakers.  The current, expanded review was published now because it took me that long to finish it.  

Of course, it is crucial to let the research and arguments speak for themselves, but for what it is worth, I have no formal affiliation with Cato or any other organization other than George Mason University, while Barnett is Director of The National Institute for Early Education Research (NIEER), whose mission is to “support high-quality, effective early childhood education for all young children.”  Barnett is a long-time advocate of universal preschool, while I had no position on pre-k until I read reports from the national Head Start Impact Study (HSIS).   

Moving on to substantive matters, Barnett says that because the successful Perry and Abecedarian programs were small and more intensive than current proposals, we should devote more resources to replicate them at scale, not discount them as of limited value in indicating how much larger, and different, programs would work.  But current “high quality” pre-K programs, including Abbott pre-K, do not in fact replicate either of these programs.  Moreover, Barnett ignores the national Early Head Start demonstration, a program similar to Abecedarian, which found no significant long-term effects in Grade 5 except for a few social behaviors of black parents–hardly an endorsement to make it universal.  Moreover, this one area of positive effects is tempered by significant negative effects on certain cognitive skills for the most at-risk students. 

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