Archives: 06/2006

Won’t Get Fooled Again?

Buried in Eli Lake’s NY Sun story on Israeli jets buzzing the home of Syrian president Bashar al-Assad is this quote from former Syrian vice president Farid Ghadry, now part of the exile group Reform Party of Syria:

“This is indicative that not only Israel is running out of patience with the terrorism that is planned in Damascus, but we believe the United States may not at all dislike what happened…. The message to Assad is, ‘Clear your plate of terrorism or we will come after you.’ This is very encouraging to the Syrian opposition.”

Lake goes on to report:

Mr. Ghadry met with Vice President Cheney on June 17 at the American Enterprise Institute’s annual retreat in Beaver Creek, Colo.

It’s remarkable that after the disastrous decision to start a war with Iraq — based in good part on false intelligence provided by exiles — the vice president is still finding new and creative ways to link up with exile groups. Mr. Ghadry once said of Ahmed Chalabi that “Ahmed paved the way in Iraq for what we want to do in Syria.”

God help us. There’s always room for more heroes in error, I guess.

Intelligence on Iran

Graham Allison had a smart piece in Monday’s Lebanon Daily Star warning us that our intelligence in Iran could be bad, and Iran might be closer to a bomb than we think.

That’s certainly true, and it’s made even more worrisome by the fact that NY Times reporter James Risen tells us that the entire US intelligence apparatus in Iran was “rolled up” when a CIA agent sent the roster of US assets there to an Iranian double agent.

At the same time, it’s important to have not just a grain, but a whole shaker of salt handy when dealing with Iran hawks.  Charles Krauthammer warned in January of this year that

Instead of being years away from the point of no return for an Iranian bomb…Iran is probably just months away.

Or for a really remarkable piece of bad intelligence, we can look to Michael Ledeen (who claims to have better intelligence on Iran than the CIA, yet who’s never set foot in Iran), who told the Jewish Institute for National Security Affairs in April 2003 of the “likelihood that Tehran will test nuclear devices by the end of this summer.”

To borrow from Donald Rumsfeld, I think we’re in “known unknown” territory here.  What better time to offer the Iranians a grand bargain and get it over with, no?

Uncle Sam Wants to Sell You a Latte

In a college town like Madison, Wisconsin, I suspect you can’t throw a copy of Das Kapital without hitting a coffee shop or a drum circle.  But the federal government insists upon subsidizing that city’s grandé mocha makers.  (It hasn’t found a way to subsidize the drum circles … yet.)

First, some background:  Every year, the federal government socks taxpayer money into the Community Development Block Grant program.  According to the program’s website, the goal is to encourage “viable urban communities” and expand “economic opportunities” across the nation and, in particular, within “entitled communities.”   

This is done by funneling loan guarantees and direct grants to local businesses.  It’s considered a form of “economic development.”  Or, to translate from bureaucratese into plain English, it’s a form of grass-roots corporate welfare.   

In 2004 the CDBG program funded loan guarantees for projects such as the Tempe Market Place project in Arizona (described as “a retail facility anchored by six nationally known retailers”) to the tune of $7 million.  It gave guarantees in the amount of $1.9 million to the Noah Hotel project in Kingston, New York, to build a 50-room “boutique hotel,” with a 16,500-square foot ballroom, a restaurant, meeting rooms, and commercial retail space.  $2.5 million went to a downtown parking garage in Watsonville, California, and $2.2 million to the redevelopment of the 427-acre Colorado Industrial Park in Lorain, Ohio.

Now back to Madison, Wisconsin.  As the Mercatus Center’s Eileen Norcross explained today in testimony to Congress, last year the feds spent roughly $1.5 million on loan guarantees to help underwrite two coffee shops, a bakery, and a restaurant in that city, just to name a few. 

How do the HUD managers justify this sort of thing?  They claim the money helps “create” jobs for low- and middle-income residents.  And who do those residents happen to be?  As Norcross notes, they are college students who are classified as below the poverty line because the money they receive from their parents while attending school in Madison doesn’t count as income. 

So, if you’re a local business owner it sounds like a pretty good deal, eh?  Now you can open your doors in a college town and get loan guarantees from the government to hire the kind of employee (read: college students) you would have probably hired anyway.

Many members of Congress will ask, “How can we fix this program?”  Only a handful – including Sen. Tom Coburn of Oklahoma, the head of the subcommittee that held the hearing on CDBG this afternoon – ever ask, “Why do we even fund this stuff in the first place?” 

Are We Reading the Same Report?

I have to disagree with Arnold Kling’s surprisingly upbeat assessment of the draft report from the Secretary of Education’s higher education commission. While some of the recommendations he likes may be tolerable in an ideal world, it’s critical to remember that we’re talking about politics here.

First, Arnold applauds the report’s call for colleges to improve data collection on student persistence in order to help inform prospective students and parents. That’s fine, and I would encourage consumers to avoid schools that wouldn’t furnish such information. Unfortunately, it’s not supply and demand that the report says should make schools publish the data. It’s government:

Federal and state policy should focus on improving persistence and sealing the leaks in the educational pipeline at all levels: K-12, post-secondary and workforce education. Colleges should be held accountable for the success of the students they admit. Improved collection of data on student persistence will allow consumers of higher education to evaluate institutional success and identify best practices.

What a terrific tool for government control! Once they collect persistence data, opportunistic politicians can declare that schools must graduate very large percentages of their students in order to receive government funds. If grade inflation seems bad now…

Next, Arnold blesses the report’s recommendation that states and schools “review and revise” their credit transfer policies. Again, this is a fine thing for consumers to require, but if government mandates it, credit transfer policies will end up being based on political calculations, not academic merits.

The same problem applies to Arnold’s next point, in which he supports reorienting student aid from “broad-based” to “need-based.” That sounds good at first, but the reality is that in order to build enough political support to give more aid to the “needy,” politicians will define “needy” to include almost everyone. Just look at the current system, which directs oodles of cash to aid programs in the name of the poor, yet somehow always ends up putting a bunch of it in the hands of upper-middle-class kids.

Finally, Arnold approves of the recommendation that all 50 states encourage “the collection of data allowing meaningful interstate comparison of student learning.”

Now, I’m not so sure I want state governments encouraging colleges to implement standards and testing regimes, which is what this would ultimately require. I’m positive, though, that I don’t want the feds doing it, because federal “encouragement” invariably leads to federal “control.” Just look at elementary and secondary education, where the No Child Left Behind Act has given Washington unprecedented control over local schools.

Harvard, Princeton, and Yale, say hello to NCLB:

The federal government should provide incentives for states, higher education associations, systems, and institutions to develop outcomes-focused accountability systems designed to be accessible and useful for students, policy makers, and the public….

In the end, like Arnold, I encourage people to read the Commission’s draft report for themselves and reach their own conclusions. As far as I’m concerned, though, one recommendation alone completely sums up the report’s frightening, command-economy thrust:

The Secretary of Education should take the lead in developing a national strategy to keep the U.S. at the forefront of the knowledge revolution, creating a system that encourages knowledge and skills to be obtained and continuously updated on a regular basis through a lifetime of learning.

I don’t know about anyone else, but that sounds like a bad thing to me.

If It Tastes Good, It’s Evil

This Washington Post op-ed from career Nanny Statists Joe Califano and Louis Sullivan reads like your standard public health talking points:  Unless adult-oriented products taste nasty, bitter, and disgusting, the companies who manufacture them will forever be accused of “marketing to children.”

Here’s my favorite part:

Buoyed by its success in pushing candy-flavored cigarettes, Reynolds has now introduced alcohol-flavored smokes. To make them appealing to our kids, Reynolds has marketed them with names based on gambling lingo as well: ScrewDriver Slots, BlackJack Gin, Snake Eyes Scotch and Back Alley Blend (a bourbon-flavored cigarette).

Color me befuddled.  So R.J. Reynolds is guilty of preying on kids because it’s marketing cigarettes (which can only be purchased by people over 18) that taste like alcohol (which can only be purchased by people over 21) with gambling-themed names (only people over 18–and 21, in some states–are permitted to gamble)?

Everything about these products is adult-oriented!  Yet for Califano and Sullivan, this is evidence that R.J. Reynolds is targeting youngsters.

Topics:

Medicare Part D: Who Is the Main Constituency?

Watson Wyatt Worldwide has just released a survey showing – again – that Medicare Part D’s employer subsidies and the availability of the new stand-alone drug plans are bailing out employers who can no longer deliver on their promises to retirees:

Despite widespread use of the Medicare federal subsidy, a vast majority of employers are planning to curtail their retiree medical plans for current and future retirees in the next five years…

Fourteen percent of employers plan to eliminate the benefit entirely for future post-65 retirees and 6 percent plan to eliminate it for their current post-65 retirees…

The lesson from the Pension Benefits Guarantee Corporation and other corporate bailouts could not be more clear: if government lets corporations escape the costs of making promises they can’t keep, we’ll get more corporations making promises they can’t keep.

FCC Fading into Irrelevancy

A fun news item for free-marketers who enjoy watching technology make government regulation (and justification for regulation) obsolete: Today’s Washington Post reports that the Internet has so altered media conglomerates’ business models as to make the Federal Communications Commission’s broadcast media ownership limits irrelevant.

Few people know that the FCC has strict rules limiting broadcast media firms’ ownership of various outlets in both local and national markets. A firm that owns TV stations is barred from owning enough stations to broadcast to a majority of the U.S. population, and a firm that owns the largest newspaper in a local market cannot also own the most-watched TV station in that market.

Michael Powell’s FCC tried to relax those rules in 2003, and with good reason. But the courts and Congress stamped out that effort. As the WP explains, media firms have subsequently taken a second look at Internet communications, shaking off Time Warner’s bad experience with AOL and Disney’s with the go.com network.

The result? According to the WP, media firms are finding so many profitable outlets on the Internet that they’re hardly interested in Congress’s and the FCC’s new receptiveness to the idea of relaxing the ownership rules.