Archives: 03/2009

Not-so-COOL Rules Stoke Xenophobia

Come Monday you can thank the federal government for making food more expensive by requiring retailers to provide useless information.

On March 16, federal regulations will finally kick in that require perishable food at the grocery store to sport “country of origin labeling,” known as COOL. The rules were originally passed by Congress as part of the 2002 farm bill, but are only being implemented now because of understandable resistance from retailers.

The COOL regulations will require that all perishable food products be labeled at retail to indicate the country of origin. The regulations cover beef, pork, lamb, goat, chicken; wild and farm-raised fish and shellfish; fresh and frozen fruits and vegetables; peanuts, pecans, macadamia nuts, and ginseng.

In a recent statement announcing final implementation, Obama administration agriculture secretary Tom Vilsack said, “I strongly support Country of Origin Labeling — it’s a critical step toward providing consumers with additional information about the origin of their food.”

This is nothing but a form of regulatory harassment designed to play to anti-foreign prejudices. COOL provides zero health or safety information; foreign meat and produce must conform to exactly the same health and safety standards that apply to domestic-made goods.

In the past, the U.S. Department of Agriculture had estimated that COOL regulations will cost $89 million to implement in the first year and $62 million annually. (My Cato colleague Dan Ikenson wrote the definitive critique of COOL not long after Congress first mandated the rules.)

The fact that a piece of meat or a fresh vegetable comes from a foreign country tells us nothing about its quality or safety. In the past three years, Americans have been sickened and even killed by baby spinach from California and ground beef from Nebraska tainted by E. coli bacteria, chicken from Pennsylvania tainted with listeria, and peanut butter and peanut products from Georgia tainted with salmonella. Would Americans have been any safer if those products had been labeled, “From California” or “From Georgia” or “From Nebraska”?

Country-of-origin labeling was not meant to serve the public but instead to provide yet another unfair advantage to domestic producers at the expense of the public.

Ed. Feds to Reinvent Wheel, Ignoring Pi

Education secretary Arne Duncan testified before Congress today on the president’s 2010 budget for the Department of Education. One of the first things he said was this:

We also plan to work very hard at scaling up success in our education system. Under our 2010 budget, the Department would continue to use the Innovation Fund created by the Recovery Act to identify and replicate successful models and strategies that raise student achievement. We know that there are many school systems and non-profit organizations across the country with demonstrated track records of success in raising student achievement, and our 2010 request would help bring their success to scale.

Duncan and President Obama are so, so right to focus on this challenge. Sadly, their efforts will so, so utterly fail, just as those of all their predecessors. Here’s why:

For a long time, observers of U.S. public schooling have wrung their hands over a pernicious problem: there are many isolated and transitory examples of excellence within the system (think “Stand and Deliver”), but efforts to scale these models up on a lasting, nationwide basis have always failed.

One early and notorious example was the federal Follow Through experiment of the late 1960s and early ’70s. At a cost of over a billion dollars, it demonstrated that one instruction method, “Distar,” clearly outperformed 21 others. Distar was #1 not just overall, but in each of the subcategories of reading, arithmetic, spelling and language. It placed a close second in promoting advanced conceptual skills, and was even the most effective at boosting students’ self-esteem and responsibility toward their work. Nothing else came close.

So what happened? The public school system failed to follow through on Follow Through. Not only was Distar NOT widely adopted around the country, most of the schools that had used it during the experimental phase subsequently dropped it. Their performance dropped commensurately. End of story.

Then there was the billion-dollar Annenberg Challenge of the 1990s, which was meant to identify and replicate successful education models around the country. The project was funded by TV Guide mogul Walter H. Annenberg, launched by then-president Bill Clinton, and overseen, in its Chicago operations, by Barack Obama. And it was another utter failure. Some good schools were created here and there, but the lasting, system-wide improvements that Annenberg had been hoping for never materialized. Why?

The reason is simple: the incredible progress we’ve witnessed in virtually every aspect of life for the past two centuries is the product of freedoms and incentives that do not exist in public schooling.  After spending most of their adult lives writing an awe-inspiring 11 volume history of the world, Will and Ariel Durant remarked that:

The experience of the past leaves little doubt that every economic system must sooner or later rely upon some form of the profit motive to stir individuals and groups to productivity. Substitutes like slavery, police supervision or ideological enthusiasm prove too unproductive, too expensive or too transient. (The Lessons of History, 1968, p. 54-55).

And while the Durants learned this lesson from their study of history, others learned it from personal experience. Michael Manley, leader of the People’s National Party and Vice President of the Socialist International, looked back on his time as Prime Minister of Jamaica and observed in New Perspectives Quarterly:

The fact is we all seriously miscalculated the capacity of the state to intervene effectively. Despite the enormous sincerity we brought to the task, our nationalist and statist approach didn’t work… When one tries to use the state as a major instrument of production, one quickly exhausts the managerial talent that can be mobilized in the name of patriotism. Absent the profit motive, it was truly amazing how few managers one could find that were motivated solely by love of their country, and how quickly these noble souls burned out. I call this idea the “Guevarist myth.” (1992, p. 46-47).

The automatic process by which useful innovations are encouraged, identified, disseminated, perpetuated, and finally superseded relies on innovators being free to do whatever they think is best for their customers, and having powerful incentives to constantly improve on the state of the art. That is why dramatic progress has been the norm under the free-enterprise system over the past 40 years, while public school productivity has plummeted.

Great educators and great schools can and do appear within the public school system, but they do so in spite of that system, not because of it. They never scale up in the way that Google, iPods, or the Kumon tutoring chain have scaled up, because they lack the combination of freedoms and incentives essential to doing so. Trying to get a bureaucracy with a state-protected funding monopoly to reliably scale up excellence in the way that markets do is like trying to reinvent the wheel with an alternative value of pi. It simply cannot be done.

True education markets are the ONLY system that will do what Secretary Duncan, President Obama, and the American people wish.

A Federal Takeover of Cyber Security?

One hopes not. But the White House’s 60-day review of cyber security, ongoing now, could set the stage for it.

In a TechKnowledge piece out today, I argue against federal responsibility for private cyber security. A common law liability regime is the best route to discovering and patching security flaws in all the implements of our information economy and society.

The smarties at the Center for Information Technology Policy at Princeton recently sat down to discuss these issues too.

Week in Review: A School Choice Victory, Earmark Reform, and Drug Violence in Mexico

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Obama Dips a Toe in the Educational Choice Pool

After Congress voted to let the Washington D.C. voucher program expire, stripping 1,700 low-income children of the opportunity to attend private schools, President Obama said he will keep the program afloat in subsequent legislation.

“It wouldn’t make sense to disrupt the education of those that are in that system,” said Robert Gibbs, the White House press secretary. “And I think we’ll work with Congress to ensure that a disruption like that doesn’t take place.”

Andrew J. Coulson, director of Cato’s Center for Educational Freedom, commented on Obama’s decision to continue to extend school choice benefits to underprivileged children in the nation’s capital:

This is a crucial milestone. There is finally a major national Democratic leader who is beginning to catch up to his state-level peers. Democrats all around the country have been supporting and signing small education tax credit programs because they realize that these programs are win-win: good for their constituents and good for their long-term political futures.

In an op-ed that ran the day Gibbs made the announcement, Coulson explained why those who oppose school choice will find themselves on the wrong side of history.

In 2006, Susan Aud and Leon Michos published a report on the fiscal impact of the D.C. voucher program, which documented the success of the District’s school choice pilot, the first federally funded voucher program in the United States.

Obama Signs Earmark-Heavy $410 Billion Omnibus Bill

After signing a bill that had nearly $8 billion in earmarks, President Obama declared that from then on, his administration would work toward earmark reform.

Sounds a bit like St. Augustine’s famous prayer, “Lord, make me chaste but not just yet,” said Daniel Griswold, director of Cato’s Center for Trade Policy Studies:

Recall that as a candidate, Obama said he and Democratic leaders in Congress would change the “business as usual” practice of stuffing spending bills with pet projects. Those earmarks, submitted by individual members to fund obscure projects in their own districts and states, typically become law without any debate or transparency.

Saying he would sign the “imperfect bill,” President Obama offered guidelines to curb earmarks … in the future. “The future demands that we operate in a different way than we have in the past,” he said. “So let there be no doubt: this piece of legislation must mark an end to the old way of doing business and the beginning of a new era of responsibility and accountability.”

Lord, make us fiscally responsible, but not just yet.

Meanwhile, Republican leaders are condemning the president’s expansion of the federal government. But do they have any standing to judge? Senior Fellow Michael D. Tanner said no:

The Bush administration’s brand of big-government conservatism was, at the very least, the greatest expansion of government from Lyndon Johnson to, well, Barack Obama.

For Cato’s policy recommendations on earmarked spending, see the “Corporate Welfare and Earmark Reform” chapter in the 2009 Cato Handbook for Policymakers.

Violence Spills into the U.S. from Mexico’s Drug War

With daily reports of increased violence coming from Mexico, Cato Vice President for Defense and Foreign Policy Studies Ted Galen Carpenter said the brutality is an indicator of power and arrogance, not desperation, and asserts that gun restrictions in the U.S. will not subdue violence:

The notion that the violence in Mexico would subside if the United States had more restrictive laws on firearms is devoid of logic and evidence. Mexican drug gangs would have little trouble obtaining all the guns they desire from black market sources in Mexico and elsewhere…

… Even assuming that the Mexican government’s estimate that 97 percent of the weapons used by the cartels come from stores and gun shows in the United States-and Mexican officials are not exactly objective sources for such statistics-the traffickers rely on those outlets simply because they are easier and more convenient, not because there are no other options.

Carpenter spoke at a Cato policy forum last month, and explained why the war on drugs sparks such intense levels of violence.

In a Policy Analysis published in early February, Carpenter warned of the need to change our policy on the Mexican drug conflict, so as to prevent the violence from spreading across the border.

Now He Tells Us!

President Barack Obama now says the economy isn’t as bad as we thought.  Reports the New York Daily News:

President Obama said Thursday the nation’s economic woes are not as dire as they seem and said his economic policies will get the country back on track.

“I don’t think things are ever as good as they say, or ever as bad as they say,” Obama told CEOs at a meeting of the Business Roundtable in Washington.

“Things two years ago were not as good as we thought because there were a lot of underlying weaknesses in the economy,” he said. “They’re not as bad as we think they are now.”

Does this mean we can cancel the “stimulus” bill and reverse all those bail-outs that were promoted as necessary to save us from disaster?

Chuck Schumer Endorses Hoover Plan

On Meet the Press last Sunday, Sen. Chuck Schumer (D-NY) said

Those on the hard right say, “Cut government spending, let’s go back to the old Reagan days.” Well, the last president who did this when we were in this type of situation was Herbert Hoover.  Herbert Hoover said the government should do nothing when we were in a recession, not a depression.  We did nothing and it related [sic] to a depression.

Reality check: Did President Hoover cut federal spending during the recession that became a depression? Not by a long shot.

 

boaz-figureSource: OMB

Federal spending was $3.1 billion (those were the days!) in 1929, the year Hoover took office and the stock market crashed. It rose modestly for two years, then shot up in 1932. It dropped a bit in nominal terms in 1933, though deflation meant that the real budget increased. Then, presumably reflecting Roosevelt’s policies, it shot up again in 1934. In real terms, the federal budget was almost twice as high after Hoover’s four years as it was when he took office.

President Bush, President Obama, and Senator Schumer are all supporting Herbert Hoover’s failed policy of increasing spending to fight recession. Let’s hope they don’t have the same results and turn a recession into a Great Depression.

Cato adjunct scholar Ilya Somin dissects the “Herbert Hoover did nothing” fallacy at Volokh.com.

Sanford Rejects Faustian Bargain

Yesterday, as expected, South Carolina Gov. Mark Sanford became the first governor to reject some of his state’s share of stimulus funds, spurning $700 million (of the about $8 billion headed his way) that he said would harm his state’s residents in the long run.  South Carolina’s General Assembly (controlled by Republicans who have long opposed Sanford’s attempts to cut spending, lower taxes, and generally reform government operations), using a provision of the stimulus bill inserted by Rep. James Clyburn (D-SC), nevertheless plans to seek the funds without the governor’s support.  They cite section 1607 of the American Recovery and Reinvestment Act of 2009, which provides that, notwithstanding a requirement for gubernatorial certification of a request for funds:

If funds provided to any State in any division of this Act are not accepted for use by the Governor, then acceptance by the State legislature, by means of the adoption of a concurrent resolution, shall be sufficient to provide funding to such State.

The question arises, setting aside the relative merits of both sides’ positions, whether the governor (or someone else) could challenge this “alternative certification” provision on constitutional grounds.  Here are some initial thoughts:

A state executive (and/or citizens of the given state) could bring colorable claims under the Tenth Amendment (powers not delegated to the federal government are reserved to the States and the people) , state separation of powers (legislature exercising executive power), and the non-delegation doctrine (Congress delegating its legislative authority to non-federal actors). Whether such challenges would be successful is a different matter.

The strongest claim would probably be under a combination of the Tenth Amendment and state law (depending on what the state constitution and statutes says about the federal grant process), especially given that much of the federal money is likely to come with strings/mandates attached – or would otherwise pervert state budgeting processes (as Sanford spelled out in a letter to state legislators). That is, depending on the particular program funds in question, it could well be that the federal government is doing an end-run around the state executive in “commandeering” (a term of art taken from the important Supreme Court case of Printz v. United States) state agencies without the full lawful acquiescence of the state government – i.e., without presentment of a bill for the executive to sign in the normal course of legislative action.

Moreover, I’m not sure how federal legislation could lawfully trump a state constitutional/statutory provision requiring that, say, federal monies only be accepted by state agencies subject to executive certification. If it could, then what’s to stop the federal government from putting in a further alternative provision allowing certification by majority vote of a state supreme court, let alone by town councils, agency heads, or any other imaginable alternatives? No, a conclusion to the contrary seems facially contrary to the separation of powers, disrupting state political structures in a way that the federal government cannot do by simple legislation.

As a caveat, the above analysis hinges on the substance of the relevant state constitution and statutes (and I haven’t yet thoroughly studied South Carolina’s, though I suspect they’re favorable to the points I’m making). The point is, it is not at all clear that Section 1607 should be considered safe from legal challenge – though courts will likely go out of their way to avoid constitutional conflicts or deciding what they may characterize to be “political” questions.