Archives: April, 2009

New at Cato

New articles, videos and Podcasts today:

  • In the Chicago Tribune, David Boaz questions whether Arlen Specter’s party change will take the Senate further to the left.
  • Watch Brandon Arnold discuss Obama’s first 100 days in office on BNN Canada.
  • For  more on Obama’s first 100 days, watch Gene Healy’s interview on AP TV.
  • Chris Preble will be on Capitol Hill again on May 11 with Jim Harper to explain why overreaction and misdirection play into the strategy of terrorism.
  • In Thursday’s Cato Daily Podcast, legal scholar Ilya Shapiro discusses how a Supreme Court decision could change racial preference hiring laws in the United States.

Mixed Messages on Swine Flu

The government has taken the sensible step of creating a website to disseminate information on the Swine Flu.  There’s even a “Swine Flu & You” section.

Unfortunately, someone forgot to tell Vice President Biden.

On the Today Show, Biden lauded the government’s focus on identified vectors and not on a wholesale closing of the border with Mexico or shutting down commercial airline traffic. Then he contradicted this rational message by saying he “wouldn’t go anywhere in confined places now” and discourages travel by plane, subway, or automobile.

No word on whether this will impact administration plans to use “high-speed rail” to revolutionize transportation in America.

In Ensuring Credit Card Holders’ ‘Rights,’ Congress May Actually Take Away Their Credit

With a vote expected today on the so-called Credit Card Holders’ Bill of Rights, the U.S. House is poised to follow up on President Obama’s finger-wagging rhetoric about fees and other perceived sins of the credit industry.

But Congress should keep in mind that credit cards have been a significant source of consumer liquidity during this downturn. Now is the worst time to push measures that would curtail the availability of consumer credit, and that is exactly what the Credit Card Holders’ Bill of Rights will do.

While few of us want to have to cover our basic living expenses on our credit card, that option is certainly better than going without those basic needs. The wide availability of credit cards has helped to significantly maintain some level of consumer purchasing during this downturn.

It was the massive under-pricing of risk, often at the urging of Washington, that brought on our current financial market crisis. To now pressure credit card companies not to raise their fees or more accurately price credit risk, will only reduce the availability of credit while undermining the financial viability of the companies, ultimately prolonging the recession and potentially increasing the cost of bank bailouts to the taxpayer.

The Federal Reserve recently issued regulations targeting practices in the credit card industry. While this regulation was itself overkill, it should be given an opportunity to work, and be modified if it results in significant contraction of credit. It is far easier to go back and change harmful regulations than legislation.

Arne Comes Through…in a Bad Way

Yesterday, I had an op-ed go up on Townhall.com summarizing what I think of President Obama’s first 100 days when it comes to education. Long story short: Lots of nice-sounding rhetoric, but the opposite of real reform.

Today, U.S. Secretary of Education Arne Duncan – who has embodied the administration’s all-talk, awful-action approach to education – did me a real solid by penning an op-ed for CNN.com beautifully illustrating exactly what I wrote.  Whether it’s his effusive praise of his boss for shoveling tons of federal dough into already obese schools, or his empty, jargon-soaked rhetoric about change – “These discretionary funds are a carrot for educators who will break the mold, scale up successful programs and transform whole school systems” – Duncan really drives home my point.

And so, thanks for coming through for me, Arne! Now, about those DC voucher kids

Chrysler: Everybody Relax, This Is Exactly What Should Have Happened

the-new-chryslerA small group of Chrysler debt holders rejected the Obama administration’s restructuring plan last night, leaving Chapter 11 bankruptcy as the most salient option for the company.

The Obama administration accused the investors who walked away of “failure to act…in the national interest.” But it’s not difficult to understand why these secured creditors rejected the government’s offer of essentially 29 cents on their investment dollar. If that is how the Obama administration treats capital markets, how exactly do they expect to spur private investment in American companies, as the White House claims it wants to do?

Bankruptcy reorganization will probably yield a better deal for investors than the government’s plan. It also will imbue the process with more financial sanity than anything the Obama administration cooked up. For instance: the historically overindulged United Auto Workers might be forced to make more “sacrifices” than being handed a 55 percent stake in the company—essentially what the core of the administration’s plan would have accomplished—or reducing their CBA-mandated breaks from 16 minutes to 13 minutes.

Bankruptcy has been the best option all along. That was clear the moment it was determined that new private capital or adequate sales revenues would not be available to fund operations. But once the Bush administration circumvented Congress to throw Chrysler (and GM) a lifeline, and the Obama administration followed suit with implicit backing, uncertainty prevailed and the problem persisted. The bankruptcy process will produce a less politically driven solution.

Private Schools Save Children Rejected by the System

There were many compelling speakers in South Carolina last week making the case for school choice. This man, Colonel Nathaniel Green, was one of the best. In about two 1/2 minutes, he explains better than I ever could why a top-down system doesn’t work for many children. I liked it so much, I’ve also transcribed most of it below.

“Failing schools” are not failing schools, they’re failing students. Failing students is failing America.

I started out working in the system. The system is broken. I was frustrated. I started a program … The young men that are standing behind me, they represent kids that the system kicked out who are now achieving.

The gentleman in the black shirt, he came from Brentwood Middle School. His parents couldn’t afford [our school]. Contrary to popular opinion [of those who keep saying that private schools are only for the rich], he came for free for six years because we were concerned about him. We sacrificed for him. Get that straight.

When he came to our school, he tested below the fourth and fifth grade level in the sixth grade. When he graduated from Eagle [Military Academy] six years later, he had a 1300 on the SAT, it’s documented. He got a Life Scholarship through the state of South Carolina, and he carriers a 3.4 average in college right now at Trident University.

I can repeat this story over and over again [for other students]. By the way, I went to the public schools to show them my program. They weren’t interested. I went to Dr. Rex [, South Carolina’s state Superintendent of Education]. He wouldn’t call me.

I went to the people to try to get them to work with me to help our young men because we’re losing our young men in our state. And I think it’s time to put aside our partisan politics, it’s time to stop playing games, and it’s time to start helping our young people in this state. Vote for this [school choice bill].

DoJ Fails to Report Electronic Surveillance Activities

Unlike with wiretaps, law enforcement agents are not required by federal statutes to obtain search warrants before employing pen registers or trap and trace devices. These devices record non-content information regarding telephone calls and Internet communications. (Of course, “non-content information” has quite a bit of content - who is talking to whom, how often, and for how long.)

The Electronic Privacy Information Center points out in a letter to Senate Judiciary Committee Chairman Patrick Leahy (D-VT) that the Department of Justice has consistently failed to report on the use of pen registers and trap and trace devices as required by law:

The Electronic Communications Privacy Act requires the Attorney General to “annually report to Congress on the number of pen register orders and orders for trap and trace devices applied for by law enforcement agencies of the Department of Justice.” However, between 1999 and 2003, the Department of Justice failed to comply with this requirement. Instead, 1999-2003 data was provided to Congress in a single “document dump,” which submitted five years of reports in November 2004. In addition, when the 1999-2003 reports were finally provided to Congress, the documents failed to include all of the information that the Pen Register Act requires to be shared with lawmakers. The documents do not detail the offenses for which the pen register and trap and trace orders were obtained, as required by 18 U.S.C. § 3126(2). Furthermore, the documents do not identify the district or branch office of the agencies that submitted the pen register requests, information required by 18 U.S.C. § 3126(8).

EPIC has found no evidence that the Department of Justice provided annual pen register reports to Congress for 2004, 2005, 2006, 2007, or 2008. “This failure would demonstrate ongoing, repeated breaches of the DOJ’s statutory obligations to inform the public and the Congress about the use of electronic surveillance authority,” they say.

It’s a good bet, when government powers are used without oversight, that they will be abused. Kudos to EPIC for pressing this issue. Senator Leahy’s Judiciary Committee should ensure that DoJ completes reporting on past years and that it reports regularly, in full, from here forward.

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