Archives: 08/2008

Unless We Start Busing Kids to Mars…

We’ve all been told that school districts around the country are feeling the pinch from higher fuel costs. What’s never mentioned is that districts are supposedly suffering budget crunches despite spending more than twice as much – in real, inflation-adjusted dollars – as they did in 1970.

According to the Department of Education’s National Center for Education Statistics, districts spent an average of $5,247 per pupil in 1970 (in 2008 dollars). Today, the average is about $12,000. How is it possible that districts could have trouble covering higher gas prices when they have an extra $6,500 to spend per pupil? One reason is that the public school bureaucracy has been doing what bureaucracies do best: growing. Since 1970, total public school employment has nearly doubled to over 6.1 million people, while total enrollment has increased by less than 9 percent. It is to support this army of new public school employees that taxpayers are being asked for more and more funding each year. If the public schools were to return to the student/staff ratio they had in 1970, they would have an extra $100 billion per year with which to fill the tanks of the nation’s school buses. And unless we start busing kids to Mars, that should probably cover it.

Of course, taxpayers might be willing to foot this lavish bill if the smaller class sizes and larger bureaucracies of recent years had led to improved student outcomes. They haven’t. Students at the end of high school score no better in reading and math today than they did in 1970, according to the Long Term Trends tests administered as part of the National Assessment of Education Progress. In science, their scores today are lower.

John McCain: Recruiting for Al Qaeda?

At the “Civil Forum” at Saddleback Church in Orange County, California this weekend, Senator John McCain (R-AZ) repeated a favorite line of his about Osama bin Laden:

If I have to follow him to the gates of hell, I will get Osama bin Laden and bring him to justice… . No one should be allowed to take thousands of American, innocent American lives. Of course evil must be defeated … we are facing the transcendent challenge of the 21st century–radical Islamic extremists.

What a gift to the recruiting efforts of Al Qaeda! - to have an American presidential candidate declare himself a follower of Osama bin Laden. According to McCain, Bin Laden is so powerful that he poses a “transcendent” challenge to John McCain’s United States.

In his cogent, well-supported, and readable article, “What Terrorists Really Want,” Max Abrahms at UCLA argues that terrorists “are rational people who use terrorism primarily to develop strong affective ties with fellow terrorists.” Think of Al Qaeda as a gang that disaffected youth might join - something powerful to belong to that gives their lives meaning.

McCain’s “gates of hell” talk is leadership malpractice, and he should stop using it immediately. Calling the threat of terrorism “transcendent” is equal parts incoherent and false. Terrorism stands no chance of defeating the United States or the West unless we ourselves collapse the society. Speaking this way about terrorism thrills our terrorist enemies and draws recruits and support to them. Silence would be much better, presidential campaign or no.

I wrote here a year and a half ago about the sensible thinking of Bill Bishop, Director of the Idaho Bureau of Homeland Security. He understood that our national ID law, the REAL ID Act, fails as a security tool. Something else about Bishop came back to me as I was recently reading Abrahms’ article: Bishop wouldn’t even speak the name of Timothy McVeigh, the Oklahoma City bomber. This is how he exhibited his loathing for a shameless terrorist killer, and it also happens to comport with sensible counter-terrorism.

Exalting terrorism - as John McCain does with his “gates of hell” talk - is precisely the wrong thing for a national leader to do. The country will be made more secure by deflating the world image of Osama bin Laden and making his movement less attractive. Our leaders must withdraw rhetorical power from terrorists by controlling their tongues.

Please Ensure Your Sense of Entitlement Is Stowed

This week, I sent the following letter to the editor of The Washington Post:

With fuel prices surging, commercial airlines have started charging passengers for once-gratis amenities (sodas, the first checked bag, pillows-n-blankets) and have increased fees for other amenities (alcoholic drinks, additional checked bags).  A recent editorial [“Pillows and Planes,” August 13] describes these fees as “picking passengers’ pockets” and “idea[s] to separate you from your money.”
Are you kidding me?  Those amenities weigh down the plane.  The fees therefore distribute higher fuel costs to passengers who consume more fuel.  As important, they allow passengers to avoid getting their pockets picked by avoiding those amenities.  (Don’t want to pay for checked baggage?  Pack light.)  The only people those fees hurt are the free-riders whose amenities were being subsidized by everyone else.  The fees don’t allow pocket-picking; they put an end to it.
The next time I hear a temper-tantrum coming from the main cabin – or first class? – I’ll know it’s a Post editor who had to pay $14 for his vodka tonic and pillow.
Today, I saw that my letter had been passed over for one that piles the … wisdom higher by wondering when the airlines will begin charging “a $20 fee for use of the emergency exit.”  Good grief.

A Modest Proposal to Protect Newspaper Jobs

Gannett announced this week that it will eliminate more than 1,000 positions among its 85 daily newspapers and 900 non-dailies. The reason for the layoffs has become all too familiar — declining readership and advertising sales, primarily because of lower-cost competition from the Internet.

I’m waiting for a member of Congress to issue the following news release:

WASHINGTON, Aug. 15—Rep. John Smith today announced his opposition to the loss of jobs at Gannett and other newspaper companies and demanded that Congress and the president rethink their commitment to “so-called free domestic trade.”

“The loss of thousands of decent, good-paying middle-class union jobs will be devastating to my district and to communities across America,” Rep. Smith announced. “Our misguided domestic trade policies have exposed vital industries to unfair competition. Our newspapers, record shops, and book stores must not be forced to compete against dumped services sold at predatory prices.”

Rep. Smith blamed growing use of the Internet since 1994 for stagnant real wages, a shrinking middle class, falling home prices, and rising levels of crime, alcoholism, and divorce in America’s newsrooms.

Rep. Smith rejected what he called “academic theories about competition, comparative advantage, technological progress, and productivity gains.” He also denounced supposed evidence that the Internet has brought benefits to millions of workers and consumers as “mere statistics.”

As Rep. Smith told cheering constituents at a recent debate, “Look, people don’t want cheaper news and information if they’re losing a job in the process. They would rather have the job and pay a little bit more for their news. And I think that’s something that all Americans could agree to.”

Rep. Smith demanded that the president and Congress embrace an immediate “time out” on all new technologies and web sites until domestic trade policies “can be made to work for all Americans.” He demanded more vigorous enforcement of domestic antidumping rules and an additional $1 billion in the FY2008 budget to expand Technology Adjustment Assistance (TAA) programs.

Truth-Squading Fursbee

I just got a media inquiry from someone who was on a conference call with Obama economic advisors Jason Furman and Austan Goolsbee.  According to this source, they claimed that McCain’s health insurance tax credit “will surely prove a trojan horse tax increase on middle class familes” (my source’s words) because the amount of the tax credit would grow only at the rate of the Consumer Price Index (i.e., inflation).  That’s much slower than the growth rate for the value of the current tax exclusion for employer-sponsored health insurance, which grows at the much-faster rate of premium growth.  (BTW, it also grows with the rate of increase in marginal tax rates.  Ahem.)

Others have made this charge before.  I’m sorry to hear that Fursbee have picked it up.

Here’s what I wrote to our media friend:

Fursbee are correct, in the sense that providing a tax break that is standardized (i.e., a fixed credit versus an exclusion whose value varies with one’s premiums and marginal rate), and whose growth is limited (to CPI versus today’s unlimited exclusion), would tax currently untaxed activity. 

But they’re flat wrong in concluding that would be a net tax increase.  The ‘why’ requires some explanation. 

Employers provide health insurance principally because those benefits are excluded from income & payroll taxes, while individual-market coverage is not.  A recent survey of health economists found that 91 percent agree that workers pay for health benefits through reduced wages.  The average “employer contribution” to the average family policy is roughly $9k.  That means that if employers weren’t providing health benefits, the labor market would force them to return that $9k to workers.  We call the current exclusion a tax break, even though it denies workers the ability to control $9k of their compensation.  If government took $9k from workers and used it to provide workers with health insurance, then we would call that a tax.  Yet when government effectively takes that money from workers and gives it to employers, we rather curiously call it a tax “cut.” 

McCain’s tax credit would level the playing field between job-based and individual-market health insurance.  With no tax penalty encouraging workers to let their employer control that $9k, the labor market would gradually force employers to add that money to workers’ cash wages.  Letting workers own and control that money is nothing if not a tax cut.  And it would swamp the tax-increasing effect of limiting the tax credit’s value to CPI growth. 

Fursbee are being too cute by half.  And I don’t even like the McCain tax credit.

I might have added that McCain’s credit would encourage Americans to be much more economical about their health insurance, which could restrain premium growth.  (Any excess premium growth due to the exclusion is itself a tax.)  Or I might have noted that the McCain credit would be a pure tax cut to people without access to job-based coverage. 

Or I might have mentioned that Fursbee should know better.  They know that tax exclusion for employer-sponsored health insurance is horribly inefficient, that reform is crucial, and that any reform will be imperfect.  Assuming my source is correct, they are being selective about their facts, demagoguing a serious effort to fix this problem, and making it harder for anyone to do so.

Response to Professor Barron’s Critique of “The Dirty Dozen”

Prior commitments prevented me from participating with Professor David Barron in the Cato / American Constitution Society forum on The Dirty Dozen, which I co-authored with William Mellor.  I’m especially gratified, therefore, to have this second opportunity, which I will use to document seven errors by Professor Barron in his blog postings here and here.  Of course, the best and most complete rebuttal is the book itself, available for the shamefully low price of $17.13 at Amazon.           

Barron #1:  “The crime of the Supreme Court since the 1930s, so says this book, has been its refusal to lock in the laissez faire constitutional philosophy that reigned supreme in the decades leading up to the New Deal.”

Facts:  Laissez faire is never mentioned in the book – not once.  Included among our 12 worst cases are those involving the non-delegation doctrine, campaign finance regulation, gun owners’ rights, civil liberties, civil asset forfeiture, and racial preferences – none of which has anything to do with laissez faire economics.  Yes, we also cover cases relating to property, contract, and other economic liberties; but to suggest that we view the Court’s major crime as not upholding laissez faire is to ignore most of our book. 

Barron #2:  “Number one on The Dirty Dozen’s hit list is Helvering v. Davis … because it upheld Social Security on a broad theory of federal spending and taxing power.”  Moreover, Helvering’s “interpretation of the General Welfare Clause is not inconsistent with original understanding because there was no clear understanding on that point during the Founding.  Madison had one view, Hamilton another.”

Facts:  First, Helvering’s focus on Social Security was incidental to its inclusion.  Helvering is one of The Dirty Dozen because the Court, in favoring Hamilton’s view of the General Welfare Clause, made a mockery of the principle of enumerated powers.  The result: redistributionist schemes – including retirement programs, welfare, hurricane relief, medical care, housing subsidies, farm supports, and grants to the arts – that have no constitutional foundation, even if justified on policy grounds.

Second, we have never argued that a clear and consistent original understanding is required to support a particular constitutional interpretation.  Instead, we note that textualists consult the structure of the Constitution whenever the original understanding is ambiguous.  And we explain (p. 216) that “structure relates, first, to the internal relationship among the various provisions of the Constitution and, second, to the overall design or framework of government that the Constitution establishes.”  No reasonable legal scholar can deny that the Constitution was structured to restrain government and limit its operations to specifically enumerated powers.  By that all-important criterion, Hamilton’s open-ended conception of the General Welfare Clause cannot be defended. 

Barron #3:  The authors “candidly (and admirably) concede that originalism is actually of little help in explaining their hostility to a number of cases on their list.”

Facts:  We make no such concession.  Professor Barron has confused “originalism” (interpreting the Constitution in accordance with the meaning of its words when ratified) with original intent (focusing on the values and objectives of the drafters and ratifiers).  As Justice Scalia has written, “It is the law that governs, not the intent of the lawgiver.”  We recognize (p. 216) that “applying original intent … begs several questions:  Which drafters or ratifiers are authoritative?  How do we know their intent? … How are differing views among the drafters and ratifiers to be resolved?”  But we heartily endorse originalism.  Judges whose decisions are anchored in the words of the Constitution have an objective basis for their views.  Even when the meaning of the words is unclear, it provides a starting point, which can be supplemented by an examination of constitutional structure, purpose, and history. 

Barron #4:  Wickard v. Filburn is included because the Court “sinned by adopting an expansive view of the commerce power. … Wickard was the key precedent for the decision upholding the constitutionality of the 1964 Civil Rights Act…. The Dirty Dozen never faces up to that obvious problem.”

Facts:  Under Wickard v. Filburn, the commerce power is not merely “expansive”; it is incoherent and all-encompassing.  Article I, section 8, of the Constitution authorizes Congress to regulate interstate commerce, not to restrict activities that are neither interstate nor commercial.  Mr. Filburn’s crops were grown within a single state for consumption by his family and farm animals.  He didn’t buy the crops; he didn’t sell the crops; they didn’t cross state lines; and his activities had no perceptible impact on interstate markets.  Yet Congress, with the Court’s approval, brazenly distended the Commerce Clause – unleashing it from the operative word “commerce” and granting to the federal government regulatory authority over virtually all manner of human conduct.

To be sure, the 1964 Civil Rights Act is where the rubber hits the road.  Our position is straightforward:  The Act has no constitutional pedigree.  It addresses private, not state actions; so it cannot be traced to the Fourteenth Amendment.  It has nothing to do with eliminating state impediments to the free flow of interstate trade; so it cannot be shoehorned into the Commerce Clause.  That said, the 1964 Civil Rights Act was an unambiguously good thing; it helped erase an unconscionable assault on human dignity.  We are glad that it happened.  We applaud its aftermath.  And we recognize that the Civil Rights Act is a settled principle of American law, not to be revisited by the courts despite its constitutional infirmities. 

Even if we are wrong about those infirmities, our position is intellectually honest – unlike the position of those who insist that, because the Civil Rights Act is beneficent, it must necessarily be constitutional.  Some activities offend the Constitution – e.g., torture – even if they yield universally acclaimed benefits – e.g., preventing a nuclear attack.  The remedy in such cases is either to amend the Constitution or acknowledge the disconnect.  In this instance, we choose the latter alternative. 

Barron  #5:  “The authors seem to be arguing in simple, consequentialist terms.  A case is badly decided if it has some bad effect in the real world.” 

Facts:  We asked 74 legal scholars to name the post-1933 cases that had the most destructive effect on law and public policy – either by expanding government powers beyond those that are constitutionally authorized, or imperiling individual liberties that are constitutionally protected.  Further, we stipulated (pp. 5-6) that “worst” cases must have led to anti-liberty outcomes and been based on erroneous legal reasoning.  Accordingly, consequentialism played a role; but we did not presume, as Professor Barron asserts, “a case is badly decided if it has some bad effect.”  Not a single case in our book was selected solely because it had a bad effect.  Unless the rationale for the case was legally defective, we did not include the case among The Dirty Dozen.  “Bad effect” and “badly decided” were two separate and distinct criteria.  Each selected case had to qualify on both grounds.  Indeed, the purpose of our book was to dissect each case and demonstrate not only its bad effect, but also how and why it was badly decided. 

Barron #6:  The authors’ criterion for judicial intervention is based on “libertarianism, which does not even begin to address the problem of private power.”

Facts:  This allegation by Professor Barron reflects a profound misunderstanding about the nature and purpose of the Constitution.  The Constitution is not a criminal or civil code that private citizens must obey.  Rather, the Constitution has two primary objectives: to secure individual rights, and to limit the power of government.  It’s not private people or private power that the Constitution constrains.  Instead, it’s government officials and government power.  The Constitution is first and foremost a code of conduct for the legislative, executive, and judicial branches of government.  Our “libertarian” theory of judicial intervention doesn’t speak to private power because the Constitution doesn’t speak to private power. 

Barron #7:  “You still need a sorting theory.  When should judges, while engaging, defer and when should they act?”

Fact:  We have a sorting theory, which we document at some length (pp. 215-24).  Members of the Court must have an allegiance to the text of the Constitution.  If the original meaning of the text is unambiguous, textualists adopt that meaning unless it leads to absurd consequences.  If the meaning is blurred, textualists must interpret the words in accordance with an originalist theory of our founding documents – in particular, a respect for federalism, separation of powers, limited government, and individual rights (both enumerated and unenumerated).  Those were the principles that the Framers applied in crafting the Constitution.  By comparison, members of the Court who subscribe to an anchor-less “living Constitution” will be disposed to use their own preferences and ideology as a basis for their decisions – thereby negating the written documents that have sustained a free society for more than two centuries.

 

Is There a “New Trans-Atlantic Consensus”?

John McCain, in his WSJ op-ed today, says there are at least the “stirrings” of a consensus “about the way we should approach Russia and its neighbors.”  For evidence, he provides the following:

The leaders of Poland, Estonia, Lithuania, Ukraine and Latvia flew to Tbilisi to demonstrate their support for Georgia, and to condemn Russian aggression. The French president traveled to Moscow in an attempt to end the fighting. The British foreign minister hinted of a G-8 without Russia, and the British opposition leader explicitly called for Russia to be suspended from the grouping.

I’m dubious that there’s any reason to hope for such “unity” between the major powers in Europe and the United States, as opposed to between us and the Baltic states, Poland, or Ukraine, each of which has its own, perfectly understandable reasons for supporting robust U.S. interventionism.  The point regarding England and the G-8 is somewhat more plausible, but it’s easier to take this position if you expect strongly that it’s not going to result in any action because six of the eight G-8 countries are likely to oppose such a view, scuttling the initiative.

Here are a few data points that should further call into question the idea that there will be such unity:

  • Italian foreign minister Franco Frattini argued earlier this week that “We cannot create an anti-Russia coalition in Europe, and on this point we are close to Putin’s position.  This war has pushed Georgia further away … from Europe.”
  • An unnamed EU official tells US News and World Report’s Anna Mulrine that “I think the current conflict has moved us away from the MAP plan [for Georgia]. Moving forward wouldn’t be a great idea.  When you look at it, we feel validated.”  The official added that the conflict “makes you ask about Georgia’s motives for joining NATO.”  According to the official, NATO isn’t looking to fight wars with Russia, stating to Mulrine that ”this is an alliance of responsibility.”
  • As mentioned below, the Sarkozy cease-fire deal is miles from the U.S. position, as is explained in more detail here.  So France is a question mark, at best.
  • The German foreign ministry is calling for a “balanced approach,” and is noting that it has condemned the Russian affronts it has perceived, including “the presence of Russian troops in Georgia-proper.”  Distinguishing between Russian troops in South Ossetia or Abkhazia versus “Georgia-proper” seems to imply that the Germans are not necessarily in line with the U.S. on attempting to ensure that all additional Russian troops inserted into those regions leave and go home.
  • President Bush announced yesterday that the U.S. humanitarian mission would be spearheaded by the U.S. military.  Although Defense Secretary Robert Gates is trying to cool down the rhetoric and make clear that he does not foresee the U.S. military using any force in Georgia, where are the European contributions?  It’s been a deafening silence thus far from the most important European capitals.  A European contribution would help show some unity on the matter–and invest Europeans more seriously in the mission.

In any event, McCain’s article is titled “We Are All Georgians.”  It’s tough to imagine anything even in that ballpark emerging from Paris or Berlin.  So let’s at least not kid ourselves about the prospect for serious burden-sharing.