Archives: 06/2008

Tanker Wars: The Saga Continues

In a boon to the state of Washington, lobbyists, and the political rags where they buy advertising, the GAO ruled in Boeing’s favor today in the tanker contract dispute.

The Air Force awarded the contract to Northrop-Grummann and its European partner EADS back in February. And despite much huffing and puffing about a legislative fix, Boeing’s Congressional backers had failed to do anything about the decision. So the GAO protest was probably Boeing’s last shot. Had the ruling gone the other way, the fight would have fizzled, and tanker development would have started down in Alabama. Now it’s back into the ring.

Technically, the Air Force could tell the GAO to buzz off. The ruling is just a recommendation to take another look at the bidders based on a review of the contracting process. The full decision is not published, but the GAO summarizes it in this brief assault on the English language. Essentially, the complaint is that the evaluation criteria were a moving target and that the Air Force got the life-cycle costs wrong. Most significantly, the GAO claims that the estimated military construction cost for the EADS tanker was too low, and that without this error, Boeing’s plane is cheaper. Apparently the expenditure in question is the expansion of hangers to accommodate bigger tankers.

The Air Force could dispute all these arguments and say it’s sticking with EADS. But the ruling is political gold for Boeing. To avoid an uproar on the Hill, the Air Force will have to do what the GAO recommends and reevaluate the bids. I bet it will then change sides and pick Boeing’s tanker. The Northrop crowd will resist, but the GAO has given the Air Force cover. Picking Boeing is the quickest way now to get tankers.

Here’s my long-winded discussion of tanker politics from March.

Lawyers Write Laws to Protect Lawyers… I’m Shocked!

As my colleague Tim Lynch, product of Marquette Law School, can attest, graduates of Wisconsin law schools become members of that state’s bar without having to take an exam.  Understandably, out-of-staters (or even Wisconsonians who go elsewhere for law school and then want to return home) might be jealous.  Now a federal judge has granted class status to a group of law school graduates who have earned law degrees outside Wisconsin and want the same right as in-state grads to practice in the state without passing a bar exam.  (The judge also dismissed the suit as moot because the plaintiff had since passed the bar exam, but apparently this plaintiff has since added his wife and another recent law grad and hopes to take another bite at that apple.)

Wisconsin’s policy is obviously little more than a bit of protectionism meant to give its two law schools (Marquette and UW) a competitive advantage over regional rivals (or to retain, at the margins, Wisconsonians who might be tempted to go to other schools which they perceive as better or which offer them scholarships).  But it may not be unconstitutional, at least not on the grounds the suit alleges – as a violation of Congress’s exclusive power to regulate inter-state commerce (state-specific bar rules are unlike the state-specific railroad gauges – which the Supreme Court has ruled to be unconstitutional on Commerce Clause grounds – because each state has its own substantive and procedural laws).  Indeed, it is easy for Wisconsin to argue that its schools are the only ones that specifically teach its laws.  Similarly, though many states allow experienced (typically five years) lawyers to waive into their bar, others (including – surprise, surprise – all major retirement destinations: HI, CA, AZ, TX, FL) require exams of all comers, even, say, a former Supreme Court justice. 

A better argument to counteract all this nonsense can probably be made on equal protection grounds – on which the Supreme Court struck down citizenship requirements in 1973 – but even those formulations have failed in the context of, e.g., state bars that exclude non-permanent resident aliens (there goes my dream of practicing in New Orleans).  In any event, I suspect that, at least in the Wisconsin case, a court would apply “rational basis” review and, for the reasons stated above, find for the state.

A free market solution would, of course, eliminate all the bar membership requirements for legal practice, giving clients the option to hire moderately trained non-lawyers – at cheaper rates! – for relatively simple matters such as simple wills, small claims litigation, uncontested divorces, etc.  Much as lawyers can now advertise which law school they graduated from, the “real” lawyers would be able to say that they’d passed the bar, had their “character and fitness” reviewed by a committee, tried x number of cases, and other indicia that would distinguish them from hucksters selling the legal equivalent of snake oil.

Hydrogen Car Hooey

One of my pricier trade newsletters, Greenwire, reports today that Honda is manufacturing a “zero emission” vehicle. Their source? A story in today’s New York Times which spills a great deal of ink on the environmental promise of these sorts of vehicles. Well, nonsense. The hydrogen has to come from somewhere, and the emissions associated with producing that hydrogen are far from zero. In fact, hydrogen-powered vehicles are, on balance, even dirtier than conventional internal combustion engines.

Next time you see Jamie Lee Curtis tooling around in one of these things, tell her to buy some carbon credits. A lot of them.

Much Ado about Offshore Drilling

The lead story in today’s papers and the buzz on the political talk shows is about President Bush’s request to Congress that they suspend the federal ban on oil drilling off the U.S. Atlantic and Pacific coasts.

Already, drilling proponents and environmentalist opponents are gearing up for battle, and the presidential candidates are sounding off on the idea. None of their comments, so far, offer anything useful for public policy.

For people who want good policy, here are some points to consider:

  • Part of the reason for the high current price of oil (and gasoline) is that supply is “inelastic” – that is, it’s hard for producers to increase production even when prices are high and there is significant economic incentive to do so. A significant increase in production capacity would reduce oil and gas prices significantly — assuming the current condition of high inelasticity continues until the new oil is brought to market.
  • It will take a long time for that new oil to reach the market. It often takes as much as a decade or more for a new oil field to be brought online.
  • No one knows how much oil lies offshore and whether that oil is economically worthwhile to extract, as there hasn’t been any extensive studies of those areas in decades.
  • Concerns about the environmental impact of drilling are legitimate, as are concerns that the United States may be forgoing the use of a valuable resource by not drilling in these areas.

Good public policy would examine the risks and costs underlying both of these concerns, and then make a decision (or perhaps a compromise) about drilling. However, this issue will not be decided in such a rational way. The debate will be dominated by two ideological camps — the “drill at any cost” crowd and the “don’t drill at any cost” crowd” — and their ideological priors and political power will preempt any good policy discussion.

Unfortunately, that’s how we roll here in Washington, D.C.

Obama Adviser Advocated War with North Korea

Matt Yglesias posts this list of members of Barack Obama’s “National Security Working Group.” Interesting to see that it includes William Perry, who wrote this in 2006, when North Korea was preparing to test a ballistic missile:

if North Korea persists in its launch preparations, the United States should immediately make clear its intention to strike and destroy the North Korean Taepodong missile before it can be launched. This could be accomplished, for example, by a cruise missile launched from a submarine carrying a high-explosive warhead. The blast would be similar to the one that killed terrorist leader Abu Musab al-Zarqawi in Iraq. But the effect on the Taepodong would be devastating. The multi-story, thin-skinned missile filled with high-energy fuel is itself explosive – the U.S. airstrike would puncture the missile and probably cause it to explode. The carefully engineered test bed for North Korea’s nascent nuclear missile force would be destroyed, and its attempt to retrogress to Cold War threats thwarted. There would be no damage to North Korea outside the immediate vicinity of the missile gantry.

[…]

We should not conceal our determination to strike the Taepodong if North Korea refuses to drain the fuel out and take it back to the warehouse. When they learn of it, our South Korean allies will surely not support this ultimatum – indeed they will vigorously oppose it. The United States should accordingly make clear to the North that the South will play no role in the attack, which can be carried out entirely with U.S. forces and without use of South Korean territory. South Korea has worked hard to counter North Korea’s 50-year menacing of its own country, through both military defense and negotiations, and the United States has stood with the South throughout. South Koreans should understand that U.S. territory is now also being threatened, and we must respond. Japan is likely to welcome the action but will also not lend open support or assistance. China and Russia will be shocked that North Korea’s recklessness and the failure of the six-party talks have brought things to such a pass, but they will not defend North Korea.

…The United States should emphasize that the strike, if mounted, would not be an attack on the entire country, or even its military, but only on the missile that North Korea pledged not to launch – one designed to carry nuclear weapons. We should sharply warn North Korea against further escalation.

North Korea could respond to U.S. resolve by taking the drastic step of threatening all-out war on the Korean Peninsula. But it is unlikely to act on that threat. Why attack South Korea, which has been working to improve North-South relations (sometimes at odds with the United States) and which was openly opposing the U.S. action? An invasion of South Korea would bring about the certain end of Kim Jong Il’s regime within a few bloody weeks of war, as surely he knows. Though war is unlikely, it would be prudent for the United States to enhance deterrence by introducing U.S. air and naval forces into the region at the same time it made its threat to strike the Taepodong. If North Korea opted for such a suicidal course, these extra forces would make its defeat swifter and less costly in lives – American, South Korean and North Korean.

President Bush did not, of course, launch airstrikes against North Korea. Rather, the North went ahead with the missile test and it failed.

John McCain might want to be careful about criticizing Obama too much for this, though: After all, it was John McCain who took to the pages of his favorite magazine in 2003 to make this argument about North Korea:

The use of military force to defend vital American security interests must always be a last resort, as it is in this crisis. But if we fail to achieve the international cooperation necessary to end this threat, then the countries in the region should know with certainty that while they may risk their own populations, the United States will do whatever it must to guarantee the security of the American people. And spare us the usual lectures about American unilateralism. We would prefer the company of North Korea’s neighbors, but we will make do without it if we must.

Who says there’s nothing these campaigns can agree on!

Democratic Dodges

Democrats love to insist that they’re out to empower the little guy, to help “working-class” people. Maybe that’s why they have to tap dance so much when it comes to school choice, a reform that really does empower poor and working-class folks, but that also ticks-off some very powerful big guys who like their monopoly just the way it is.

In an interview yesterday, presumptive Democratic presidential nominee Barack Obama offered the sort of lame excuse-making that all too often characterizes the Democratic approach to school choice.

TAPPER: You talked about the need to change the status quo in education today.

OBAMA: Right.

TAPPER: But…proponents of school choice say that the best way to change the status quo is to give parents, inner-city parents a choice. Why not?

OBAMA: Well, the problem is, is that, you know, although it might benefit some kids at the top, what you’re going to do is leave a lot of kids at the bottom. We don’t have enough slots for every child to go into a parochial school or a private school. And what you would see is a huge drain of resources out of the public schools.

So what I’ve said is let’s foster competition within the public school system. Let’s make sure that charter schools are up and running. Let’s make sure that kids who are in failing schools, in local school districts, have an option to go to schools that are doing well.

But what I don’t want to do is to see a diminished commitment to the public schools to the point where all we have are the hardest-to-teach kids with the least involved parents with the most disabilities in the public schools. That’s going to make things worse, and we’re going to lose the commitment to public schools that I think have been so important to building this country.

TAPPER: So it would help some kids, but overall it would be bad for the system?

OBAMA: I think it would be overall bad for most kids.

Oh please! It stretches credulity beyond the breaking point that someone as smart as Sen. Obama could actually believe these things. Let’s break ‘em down:

School choice would “benefit some kids at the top.” The kids at the top clearly aren’t the ones school choice is serving, or hasn’t Sen. Obama noticed that most school choice programs are means-tested? And parents with money have huge advantages in the current system because they are able to choose schools by buying a house in a good district.  The poor have no such option, and are the ones who need school choice the most.

“We don’t have enough slots for every child to go into a parochial school or a private school.” Well of course we don’t now because everyone is already paying for “free” public schools. Give parents education money instead of public schools, however, and private institutions will expand to meet newly liberated demand.

“What you would see is a huge drain of resources out of the public schools.” Some quick math: Say we spend $10,000 per public-school student and have two students. Then say one is given a $7,500 voucher to go to a private school, and the remainder stays with the public school. Suddenly, the remaining student is getting $12,500, a huge per-pupil increase in resources. Of course, the district could lose the entire per-pupil amount, but it still wouldn’t lose resources. It would break even.

“So what I’ve said is let’s foster competition within the public school system.” While we’re at it, let’s not allow multiple auto producers, let’s just foster competition within General Motors and see how that works

“What I don’t want to do is to see a diminished commitment to the public schools to the point where all we have are the hardest-to-teach kids with the least involved parents with the most disabilities in the public schools.” Guess what? Public schools actually send the hardest-to-teach kids to private schools right now, so we don’t need to worry; this one came to pass long ago.

“I think it would be overall bad for most kids.” Just like freedom and competition are bad for most people who want news and information, food, consumer electronics, cars, clothes, telephone service….

To be fair to Sen. Obama, at least his objections are comprehensible. Much worse is DC Congressional Delegate Eleanor Holmes Norton’s attempt in today’s Washington Post to show that she really does care about kids in the DC voucher program, a program she intends to see die:

Far from conducting a “campaign” to cut off funding, as The Post alleges [editorial, June 12], I have asked that there be no cutoff at the end of the pilot program, which would leave these children rudderless, and for a plan for the children’s education in case funding does not continue.

What does this mean? Is Norton saying that the kids in the program should keep getting vouchers even if the program ends? If so, why not just say that? And what does “a plan for the children’s education” mean? That we plan to put kids right back in the rotten schools they were trying to escape?

Unfortunately, Norton furnishes what appears to be an answer to these questions. She wants private individuals to fund scholarships after they’ve paid their public school taxes, just as they did before the voucher program. But the public sector won’t just sit there. It will do, um, something:

But whatever Congress decides, surely the private and public sectors working together can develop a plan to satisfy a finite group of children. The Washington Scholarship Fund, which has administered the pilot program, was funding more than a thousand scholarships without federal dollars when it came to Congress in 2003 to urge approval of this program. This and other private funding could be reactivated.

No one is likely to be fooled by Del. Norton’s ham-fisted attempt to seem to care about the kids she’s tossing back into the dens of ignorance. It’s so sloppy and fractured an illiterate could see she’s an artless dodger. But then, she and many other Democrats aren’t really trying to send the message that they care about kids. Their message is that they care about the teachers unions, administrators associations, and other special interests that live off of our decrepit public schooling monopoly, and that message keeps coming through loud and clear.