Archives: February, 2009

A National Talk-Show Host with Nuclear Weapons

Over at the DC Examiner, I have a piece tied to President Obama’s address before Congress tonight. It’s called “The President Talks Too Much.” An excerpt:

In recent weeks, the president has been anywhere and everywhere, with a campaign-style blitz of media appearances and town hall meetings. But, hard as it is to imagine in this era of the omnipresent president, there was a time when presidents weren’t seen much and were heard even less. There might be a lesson there for Obama.

Our founding fathers didn’t want a president who’d perpetually pound the bully pulpit. They viewed presidential speechifying as a sign of demagoguery, and thought Congress should take the lead on most matters of national policy. They expected the nation’s chief executive to pipe down, mind his constitutional business, and keep his hands to himself.

The “permanent campaign” that dominates modern presidential politics would have appalled our forefathers. Accepting the 1844 Democratic nomination, James K. Polk described the custom of the time: “the office of president of the United States should neither be sought nor declined.”

When 19th-century candidates spoke publicly, they sometimes felt compelled to apologize, as 1872 Democratic contender Horace Greeley did, for breaking “the unwritten law of our country that a candidate for President may not make speeches.”

The modern ritual of the State of the Union–with members of Congress rising to clap for every outsized promise–has grown weirdly anti-republican. Congressmen and women are members of a coordinate branch, and they ought not to be clapping maniacally like so many members of the Supreme Soviet. (George W. Bush’s last SOTU was interrupted 72 times by applause).

It would be nice if Obama returned to the Jeffersonian tradition of writing out the State of the Union and sending it over by messenger, rather than delivering it in person before Congress assembled. Of course, that’s never going to happen. There is one thing he could do, however, that would endear him to millions of Americans in the viewing public: start the speech with the following words:

“Ladies and Gentlemen: Please hold your applause to the end.”

Cato Scholars Live-Blogging Obama’s Speech

Tune in here on Cato@Liberty tonight, where Cato scholars will provide live commentary on President Obama’s address to Congress.

The president is expected to highlight domestic issues in his speech, including the state of the economy, health care and energy policy. He’ll touch on foreign policy, addressing the wars in Iraq and Afghanistan and the future of the detention center at Guantanamo Bay.

The speech begins at 9:00 PM EST and is expected to last 50-60 minutes.

You can also follow our live commentary of Obama’s speech on Cato’s Twitter feed.

Topics:

The Foreclosure Five Dominate Case-Shiller Price Indexes

A CNNMoney.com report, “Home prices in record drop,” posted a scary map labeled “Falling Homes Sales.” But it actually shows falling home prices. Within the S&P Case-Shiller sample of 20 metropolitan areas, the steepest drop in prices (not sales) were in Phoenix, Las Vegas, San Francisco, Los Angeles, San Diego, Tampa and Detroit.

All 7 of those metropolitan areas (7 out of 20 in that index) lie within 5 states with by far the worst mortgage problems, as shown in my February 21 article, “The Foreclosure Five.” Yet I also showed that states with the steepest price declines also have had huge increases in home sales, which makes the label on the CNNMoney map doubly misleading.

My article used third quarter house prices because fourth quarter figures were not yet available. That turns out to make even less difference than I expected.

The fourth quarter Federal Housing Finance Agency (FHFA) figures show home prices down 21.8% for the year in Nevada, 20.5% in California, 15.2% in Arizona, 19.5% in Florida, and 11.8% in Michigan. Prices were down 3.7% in the median state, North Carolina, but up 21.6% over five years. That means prices fell by less than 3.7% last year in 24 states— including a half dozen states with home prices up a bit, and New York with only a 3.3% decline.

CNNMoney says, “The decline does not seem to be slowing - just the opposite. The average home price dropped 2.5% between November and December in the 20 top metro areas.” The FHFA data for all 50 states, by contrast, show a small 0.1% increase in home prices between November and December.

The article goes on say, “The S&P Case-Shiller National Home Price Index reported that prices sank a record 18.2% during the last three months of 2008, compared with the same period in 2007. Case-Shiller’s index of 20 major metropolitan areas fell 18.5%, also a record.” The FHFA, by contrast, shows that prices fell just 8.2% during the last three months of 2008, or 3.7% if using a median average. Ten percentage points is quite a wide gap.

What accounts for such huge differences between Case-Shiller and federal price indexes? CNNMoney imagines it’s because “Homes purchased without financing or ones too expensive to qualify for a Fannie-Freddie loan are not counted in the FFHA (sic) statistics.” That’s more than unlikely. The inclusion of cash sales and jumbo loans (larger than $729,750 in pricey area) can’t possibly explain why price declines in the Case-Shiller index look so much more dramatic those in the OFHEO/FHFA index.

The real reason is simple: Case-Shiller indexes are hugely dominated by the Foreclosure Five. In the Case-Shiller index of only 20 “top” metro areas, the Foreclosure Five account for 41.2% of that value-weighted index with California alone accounting for 27.4%.

The “national” Case-Shiller index totally excludes 13 states, such as Indiana and South Carolina, and samples only a fraction of many others. The Foreclosure Five account for 28.3% of that “national” index, with California amounting to 17.1%.

As is true of nearly all reprorting about foreclosures, underwater mortgages and falling house prices, what the Case-Shiller price index really shows is that many people are confusing what has been happening in the Foreclosure Five with what has been happening in the nation as a whole.

The ‘Inane and Insane’ World of Federal Criminal Law

Over at  Sentencing Law and Policy, Douglas Berman takes a look at a recent federal case:

I cannot help but wonder if the authors of the Bill of Rights would have been even more troubled by the ugly way federal criminal power is exercised here.  Rather than having state authorities indict and try the defendant for all his local crimes, the feds come in, secure a conviction through a broad regulatory law, and then obtain a long prison sentence by “proving” state crimes to a federal district judge (by a preponderance of evidence) at sentencing.  Thanks to modern criminal justice realities, federal prosecutors can easily make a sentencing end-run around most of the constitutional criminal procedure rules the Framers put into the Fifth and Sixth Amendments.

It’s not just one case.  This is a trend in the federal courts.  In my new book, In the Name of Justice, I identify many other ways in which the government is going over, under, and around the Bill of Rights.

Dems Want D.C. Vouchers Dead. Hope Someone Else Pulls Plug.

Republican leaders in the House say that Democrats are using the 2009 omnibus spending bill to try to kill the D.C. voucher program. Democrats deny the charge. Who’s right?

Created in 2004, the D.C. Opportunity Scholarship Program was originally authorized for 5 years – a term that would have expired this June. While a typical reauthorization would have extended the program for another five years, Democrats have explicitly authorized funding only through the 2009-10 school year. If that truncated funding were not enough to worry participating families, Democrats have also called for the granting of a new veto power over the program for the DC City Council. If the bill passes as it is currently written, the voucher program can only be funded if it is reauthorized by both Congress and the City Council.

Clearly, this new language doesn’t kill the Opportunity Scholarship Program outright. Just as clearly, it puts the program on life support, and it suggests that Congress is hoping the DC Council will pull the plug for them, so that they can’t be directly blamed for kicking 1,900 children out of private schools that they have chosen and become attached to.

Critics of the program complain that, after its first two years, it had still not raised overall student academic achievement by a significant margin (though parents are happier with their voucher schools). What is less well known is that the program has proven to be dramatically more cost effective than the DC public schools. While voucher and non-voucher students are performing at about the same level, DC public schools spend more than four times as much per student. Total per pupil spending in DC was $24,600 in 2007-08, while voucher schools receive an average of less than $6,000.

If you could save 75 percent on a purchase, get the same quality of service, and know you’d be happier with the result, wouldn’t you do it? It seems Congressional Democrats would not.